LONDON -- Some Japanese company presidents and board chairmen have probably been laughing quietly to themselves over the scandals that have engulfed some large American companies from Enron to Xerox and WorldCom. After all the lectures they have heard from Americans about the superiority of American accounting and corporate governance, an element of schadenfreude is understandable.
But Japanese company boards would be wise to avoid complacency. They should look carefully at their own arrangements. They need to ensure greater transparency in their own accounts and give more information to their shareholders.
There is always the danger in any economy that corruption and greed will undermine efficiency and fairness. This is even more likely in a socialist economy than in a market economy. If competition is encouraged, anticompetitive devices are outlawed and accounting practices are adequately policed, there is at least some protection for the shareholder and the consumer.