ABSTRACT
The zaibatsu were a predominant form of business organization amongst large enterprises in Japan during the inter-war years. Among the zaibatsu of the inter-war period, the power of the holding company as shareholder was virtually absolute, and employees had no influence on corporate governance. The analysis of zaibatsu corporate governance during the pre-war period must necessarily focus on the relationship between managers and shareholders. The important share of the holding companies sectors within this distribution is consistent with other data for this period, and demonstrates the need to focus on the zaibatsu and holding companies. Among large shareholders, the largest were the zaibatsu holding companies, which shared a unique relationship with the owner family. As evidence of this closely-held family investment structure, it was not until the Second World War that holding companies became publicly-quoted on the stock market. This characteristic of zaibatsu corporate governance reveals the underlying organisational structure of the Japanese economy before the Second World War.
