In chapters 1 and 2 we noted the importance of managers' priorities, or ideologies, in determining the future of the community firm. In this chapter we turn to these, in the context of the global tide of corporate governance reform, which started in the 1980s in the USA and UK, and subsequently swept developed and developing countries alike. With it came a greater emphasis on shareholder interests. Despite a growing interest in varieties of capitalism, it was in fact the ‘neo-American’ variety which made most of the running under economic globalization and corporate governance reform, at least until the collapse of the IT bubble and wave of corporate scandals in the USA at the turn of the century.

What happened when this tide hit Japan? What corporate governance reforms did Japanese managers themselves initiate? After briefly reviewing developments at the macro-level, we turn to a large-scale survey of executive directors of listed companies conducted by JTUC and chaired by Inagami in January and February 1999. The survey offers insights into the thinking of Japan's top managers about corporate governance reform at that point. It also allows us to explore the relationship between views on corporate governance and managers' responsibilities on the one hand, and changing employment and industrial relations on the other. Through this, we will gain a better picture of change and continuity in managers' priorities or ideologies, and the consequences.