The transformation from thrifty accountant to

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The
transformation from


thrifty a
ccountant


to

independent i
nvestor

?:

t
he c
hanging role of Japanese women in financial
management

under the influence of globaliz
ation


Naoko Komori

Sheffield University Management School

n.komori@sheffield.ac.uk


















Paper to be submitted to the Interdisciplinary Perspectives on Accounting Conference,


Cardiff, July10
-
13
th
, 2012

2

Abstract


Recent years witnesses the changes in the
role of Japanese women in financial
management at home.

Since

2004, t
he Japanese government has made it economic
policy to encourage domestic households to

invest rather than simply save their money.
T
his change

in economic
policy

on the role of household
helped to intensify women’s
involvement with finance

and investment activities
. This study seeks to explore how
the
financial role

of women

has changed
historically in

Japanese
society by examining

the
social history of
the
traditional Japanese household (
ie
) and the
changing
relationship
between corporations, stock market
s

and households.
S
tudy
ing

the
Japanese context
enables us to recognize

the interrelationship between the corporate (
public
) and
household (pri
vate) spheres

rather than adopting
the

separate spheres


view of women

s
history
(Walker, 2003;

Rutterford and Maltby, 2006)
. The
Japanese household

may be
seen as the predecessor of the
modern corporation,
the latter being greatly influenced by
the logic of the former
(Cooke,

1994
; Mckinnon
,
198
4a
). The examination draws on a
wide range of
Japanese and English
literature
, including accounts of
women’s history

in
Japan
,
analyses of

accounting and corporate reporting in Japan, socio
-
historical studies
o
f the

Japanese

household and

Japanese
en
ter
prises
,

and
studies o
f

Japanese business
and managemen
t practice.
The evidence from
the
Japanese

context highlights
that
an
appreciation of the interrelationship between corporation and household
is important

for
understanding the
role
of

accounting

in th
e

corporate governance process
.



Key words: globalization; women
; investment and finance; household; savings;
socio
-
cultural underpinnings


3



Introduction

Since
the
early 2000s,
Japan

has witnessed
the
increasing
involvement

of women in

investment and finance

activities. The issue of finance ha
s

be
come

a key
concern among
Japanese women;
one

survey

reported that

finance and money


has becom
e

the primary
interest
of
women in Japan,
pushing

health


into
second
place
(
Nikko Cordial
Securi
ties Co, 2005
).
As interest among women grows,
companies, b
anks and securities
companies have been

intensifying their efforts to

attract more
women investors. A
number of securities companies
, in conjunction with the Tokyo Stock
Exchange,

now
hold
investment seminars for women to promote

their understanding of

investment.
In
the
early 2000s, a

number of large

department stores and cosmetics companies

started
holding

women
-
only

investor relationship (IR) seminars.
In these seminars, the l
ectures
on

h
ow to build up

an

investment portfolio
follow
ed

make
-
up lesson
s

and wine
-
tasting
sessions.

Although

such movements have calmed down

after the financial crisis,

th
is
signifies the chang
e

in the

relationship between Japanese women and financial
management.

The
strong
relationship between Japanese women and finance
i
s not

a new phenomenon.

Women in Japan have historically had a strong association with bookkeeping and
accounting at home, and household accounting practice has been a significant tool in
househol
d management (Komori and Hum
phrey, 2000; Komori,
2007; 2012
). Since the
pre
-
modern era, women in Japan have had control over the domestic economy.
Th
e

strong association between women and domestic accounting in post
-
war Japan is
closely linked to the government
-
defined social role of the household: to accumulate

4

savings that can be used to fund
in
vestment in industry. The recent strengthening of the
rela
tionship

between women and investment
has been

the result of
not only a reaction to
the low interest offered by banks, but also
a change in
government

policy with regard to
the social role of the household.

This paper explores
the changing role of women
in financial management
,

why women
have historically
had such control over accounting and financial management in the
household
,

and how their role and position changed as Japan
ese corporations

responded
to the challenges of

modernization
,
industrializatio
n

and globalization

(prior to the

financial crisis
of

2008).

By so doing, it seeks to give

an
understanding

the

significance
of women’s
role as
investors

in
the
Japanese social a
n
d historical context
.


E
xamination
of

the

historical changes
in

Japanese
women’s role and position in
financial management highlight
s

the significance of
the
socio
-
cultural underpinning
s

that ha
ve

shaped the role and nature of
corporate
accounting
in Japan
. It
enables us to
understand
how th
ese underpinnings have changed

under the

influence of globalization

and to assess how
th
ey might be further affected by the current

financial crisis
.

The
significance of socio
-
cultural impact in shaping accounting practice has already been
emphasized by accounting historians (Carnegie,

1993; Carnegie and Napier, 1996; 2002;
Walker, 2008b), and greater attention is being paid to the study of accounting history in
local and indigenous contexts.
A number of
studies

have
highlighted

how the
Anglo
-
centric domination of knowledge production i
n accountancy may have
perpetuated a distorted view of indigenous values and cultures

(see for example
, Graham,
2009)
.

Although accounting researchers are increasingly calling attention to the
interaction between accounting and its social and cultural contexts, it has been stressed by

5

Japanese scholars that the discussion of the culturally idiosyncratic aspects of Japanes
e
accountancy has so far not been supported by well
-
founded evidence (Suzuki, 2007,
p.569).

Given the strong relationship
between

women and accounting

beyond

the
corporate accounting arena

in Japan
,
th
e examination of
the
cha
nging role of women in

financial management

will
provide us a different angle to understand
the nature of

accounting in
the
corporate arena

and
how
it has changed
as

Japanese companies have
been transformed under the influence of globalization.

In other words, the paper aims to
illuminate the nature of corporate accounting by introducing gender perspectives
currently marginalized in accounting history (Walker, 2008).


Modern companies in post
-
war Japan, with their group
-
orientated
corporate

operations,
can be seen as the natural

heirs of the
Japanese households

(
ie
)
,

which were essentially

community firms


(Mckinnon, 1984
; Cooke, 1994). In these community firms,
employee relations are formed not only on the basis of economic contracts but also on
psychological

contracts that presuppose shared norms and interests between employer
and employee (Inagami and Whittaker, 2005). By promising employees life
-
long
employment, companies
maximize

the employees


sense of loyalty to the company and
their
commitment
. The shar
ed interest between employers and employees also defines
the mode of corporate
governance

in Japan; unlike the US and UK, where shareholders
are generally considered to own the company, Japanese companies are held by a range
of stakeholders, including empl
oyees, who are seen as having the governing influence.
However, it has been argued that as global
activities

increase

and
shareholder

pressure
grow
s, this distinctive feature of community firms in Japan is changing (Inagami and
W
h
ittaker, 2005; Jac
kson, 20
05).
The
introduction of global
accounting

standar
ds
(ie.


6

consolidated accounting
)

has been

a great impact on the group
operations

of Japanese
companies (Kikuya, 2001).
By show
ing

how women

s role and position in accounting
and finance have been transforme
d as the traditional Japanese household

(
ie
) and its
relationship with the corporations have
developed
, this paper

will offer a differ
ent
perspective on

the nature of accounting in
the
corporate

arena and the

influence of
globalization on corporate governance in Japan.


The paper first examines the
role and position of auditing in Japan discussed in the
current studies
; this will help us to overview our existing understanding of accounting
and auditing in corp
orate arena. This will followed by t
he
examinations of changing role
of women in financial management.
The nature of the household in Japan and women

s
role in financial management are first examined by
reviewing

historical studies of the
position of women

in Japan between the 11
th

and 15
th

c
entur
ies
. It is generally
considered that
w
omen

s role in
financial

management w
as defined

during this period.
Secondly,
the changing role of women in
accounting

and finance throughout the period
of
industrialization

and globalization.
This is done by reviewing a wide range of
literature
, including texts on business and
accounting

in Japan, and social studies of the
lives of Japanese women.

The paper concludes by considering
the

implications of the
study.

.

1.

The count
ry of
wonderland a
ccounting: The role and position of auditing in
Japan

As the global development of business operations and capital markets has gathered pace,
accounting and auditing in Japan have been repeatedly criticized by international

7

investors,
shareholders and practitioners. Auditing, in particular, has always been a
target for condemnation; auditors have been accused of sharing a mutual interest with
corporate management and allowing their judgments to be significantly influenced by
their reluc
tance to damage the client’s

reputation (Mckinnon, 1984
).

Studies of the accounting profession and auditing in Japan have identified the limited role
that they have hitherto played in the country.
Some have argued that the concept of
independent auditing
was not originally generated by internal demands but was imported
from the US after the war (Nakajima, 1973).
Initially,

the accounting profession was too
small to cope with an independent auditing system. In 1965, only one
-
third of the 3,800
CPAs in Japan

were engaged in auditing


the majority did taxation work for sm
aller
companies (Mckinnon, 1984
, p.24). The establis
hment of accounting firms

was delayed
because it was initially prohibited for accounting professionals to operate under a single
corporate
identity. This meant that auditing of the large, leading Japanese companies was
conducted on a very small scale, usually by no more than 10 assistant CPAs and their
clerical assistants (ibid, p.24).

One of the common explanations that
the marginalized
status of auditing in Japan as
arising

from the cultural emphasis on ‘interdependence’

(
Mckinnon

1984; 1994;
Mckinnon and Harrison1985).

She based her argument on the work of Chie Nakane


a
Japanese sociologist who explored the nature of Japanese society
and identified the
distinctive nature of Japanese social relationships. Rather than revealing

a confrontation
in public and
depending on a third party for its settlement, the Japanese set social value on
settling disputes internally (
nai nai ni sumaseru
),
endeavouring to maintain harmony by
seeking genuine reconciliation among the competing interests (ibid, p.22). Some argue
that the interdependent culture is one of the major causes of

the poor state of actual audit

8

practice

, as instanced, for example, in

accusations that auditors cut corners in their work
(Sakagami, 1999, p.341).
Japan’s

distinctive cultur
e is also often employed to explained

the corporate behavior of financial reporting.
The historical impact of Confucianism as
well as the strong cultura
l inclination towards group

consciousness have been used to
justify corporate reporting practices in Japan such as income soothing and the emphasis
on long
-
term performance
(
Bloom and Solotko, 200
3
).

The marginalization of auditing could also be the result

of the style of corporate
governance practised in Japanese business corporations. In recent business management
studies it has been suggested that the cultural emphasis on interdependence in Japan has
helped shape corporate governance through the prevalen
ce of

integrated internal
governance and execution


(Buchanan, 2
007; Dore, 2005; Mckinnon, 1984
). This is in
contrast to the Anglo
-
Saxon model, which is shaped by ‘the concepts of external
surveillance’ (Buchanan, 2007, p.28). The corporate governance
model in Anglo
-
Saxon
countries places emphasis on monitoring mechanisms for external surveillance; measures
such as the presence of independent, external members on the board, recruitment from the
external managerial labour market, and shareholder activism

have been developed to help
monitor and verify corporate activities (Yoshimori, 2005, p.455). In the Japanese
corporate governance model, in contrast, these independent
,

external monitoring devic
es
are taken over by insiders.
For example, boards are likel
y to be comprised of a majority of
internally appointed executive directors who have worked in the company for many years
(Buchanan, 2007, p.28). The issues to be put at the board meeting will have already been
discussed in less official meetings (in a pro
cess called
nemawashi
); in practice, board
meetings are convened simply to approve these informally discussed agenda (Cook and
Sawa, 1998). The Commercial Code requires corporate statutory auditors (
kansa
-
yaku
),

9

who are not required to be certified public
accountants (CPA), to oversee the
management and the board of directors. However, their appointment is decided by the
president of the company they are to monitor. Not surprisingly, the independence of
corporate statutory auditors has long been questioned.

The third key factor in the marginalization of auditing in Japan could be explained in the
way corporations are owned. The major businesses in Japan operate through a series of
intricate corporate networks (
keiretsu
), built up since the war through
cross
-
shareholdings among banks, life insurance companies and business conglomerates
(
zaibatsu
)
. Within these corporate networks, the priority has historically been to create
stable and friendly relationships among member firms, while ensuring any risks are
shar
ed equally (Nakatani, 1984). Most
shareholders participate in the management of the
group at some level, and they ha
ve

rarely ques
tioned the quality of financial reports
(Mckinnon, 1994, p.197). On the other hand, banks, as the dominant creditors, have
his
torically played an important role as monitors of these firms; sharing a long
-
term
interest with the corporations, they have had

direct access to internal financial
information and to the corporations’ directors (ibid, p.197). There
was

therefore been
little pressure from either shareholders or creditors to question and improve fina
ncial
disclosure practices, which helped to shape
the quality of these practices

that

was
considered to be
poor (Cook and Kikuya, 1992; Gray, 1988). This stat
e of affairs has
changed under the influence of globalization, but the role of the Japanese government and
the interdependent relationship it has had with the accounting profession ha
ve

made it
difficult for auditors to implement drastic changes in account
ing practice and regulation.
Since the late nineteenth century, the government has pursued national goals of
industrialization and modernization with the aim of transforming the country from an

10

agrarian to an industrial
-
based economy (ibid, p.196). The
zai
batsu

have been regarded as
key to implementing this goal, so the government has been more concerned with
supporting them than with regulating them


the improvement of corporate reporting and
audit practices
was

a

low priority for many years.

Previous
studies have illustrated the macro
-
factors that have helped marginalize the role
and position of auditing in Japan: the cultural emphasis on interdependence; integrated
internal corporate governance;

the comp
osition of corporate ownership
.

One significant

imbalance in the studies of accounting and auditing in Japan is the lack
of a gender perspective


little attention has been paid to the experiences of women.
This is in marked contrast to accounting research in the West, where
women’s role and

position

as well as their experiences

in accountancy

is established as an important
research perspective in the study of accounting’s social role and significance
.

It must be
noted that there is a general tendency for

gender studies to be marginaliz
ed in
accounting

history (see Walker, 2008
a
); nevertheless, these studies have helped
illuminate the links between accounting and the broader social, historical and political
context within which it is located. A simple comparison with the development of
accounting resear
ch in Japan highlights the absence of this line of enquiry among
Japanese accounting historians.

The introduction
of gender

a
nd
the examination of
the
role and position of women in financial management
may shed light on
aspect
s

of
accounting and auditing in
the

corporate arena
which have so far not been

illuminated.

2.

The
n
ature of the
h
ousehold

and women’s role as f
in
ancial m
anager
s in the
p
re
-
m
odern
e
ra

In his
stud
y
, based on

late nineteenth century Britain
, Walker

found
that
women

were


11

active
ly involved in
an

accounting function

in which
the

b
oundary between the public
and private was obscure (Walker, 2003). Similarly, in
the
Japanese household

(
ie
)
,

which
has
historically
played

a

public


role, accounting and calculative
res
ponsibilities

have been allocated to women.

Historians have been divided over the position of women in Japan in the pre
-
modern
period. Up until the 1970s, many researchers took the view that women occupied a very
low position within the
patriarchal

communi
ty (Akashi, 1987, p.131). Others claimed,
however, that the patriarchy had not been established at this stage in Japan

s history and
that women enjoyed equal status with men. Recent studies in women

s history in Japan

reject both perspectives, claiming that they are too simplistic and do not r
eflect the real
lives of women (ibid., p.13
2). Increasing efforts have been made by

historians to
explore the real

lives of women from different classes, periods, locations and
oc
cupations
1
. These studies have highlighted that the role and position of women were
strongly linked to the nature of the Japanese household and its role in different historical
periods (Wakita,
1987;
1992;

2002
; Wakita
et al
., 1987
).

In ancient and med
ieval times
(until
the mid
-
14
th

c
entury
)
, farm
ers
, fish
ermen

and
merchant
s

made up 80 percent of

the

population in Japan.

The household as a social unit,
based upon the husband and wife partnership, did not
become the dominant model

until
the 10
th

century

(Inuma
, 1992, p.164). Many of the a
ncient agricultural

villages were
organized
along
commun
al lines

with the community determining
issues such as
exchang
es of work

and marriage alliances for its members

(Ueno, 1987,

p.78)
. I
n these
villages, where

the econ
omy ran on a non
-
monetary basis, women had control over rice.



1

A notable work by Japanese women historians is
Gender and Japanese History
, Vol.1&
2

by
Wakita, H., Bouchy, A. Ueno, C. (eds
), (1999). This contains 30 articles highlighting the real
-
life
experiences of women from different historical periods, classes, locations and occupations.


12

In a context where r
ice functioned as a form of currency
,

control over rice meant
control over the domestic economy


(
ibid.
, p.77).
Women
had
responsibility for financial
management
in both com
munal and household
-
based societies in ancient

Japan.

When
the female head of the household retired, the ritual of

the transmission of the ladle


(
Shamoji
-
watashi
) was held. In this ritual, the
power of the
female household head was
symbolized by the
ladle
,

which was used to serve rice
. It
signified that
the
female
household head had exclusive management of
the
distribution of rice
;

in other words,
that she was the
manager of
the
domestic economy.


Since the
beginning

of the ancient period, the demarc
ation of gender roles was evident
within

the household; male household heads (
ie
-
gimi
) were owners who were
responsible for productive activities and held rights over
their

employees, while female
household heads (
ie
-
toji
) were
responsible

for managing the

domestic economy and
distributing the food among the members
of
the
household (Akashi, 1987, p.141).


The w
om
a
n

s role as man
a
ger of
the domestic
economy
was

further strengthened in
medieval times when the household
became the prevailing

social unit. In
medieval
times,

the
household (
ie
) came increasingly
to replace the community, establishing itself
as
the

unit that
determined the
social
rol
e
of
individuals.
W
omen
we
re allocated t
he job
of managing
the finance
s

of
the
household and their role
wa
s strongly linked to the
nature
of

the

ie
.

Unlike the Western concept of


family

,
ie

wa
s

not

understood
to mean

a family
-
kinship
group linked by biological relationship to a common ancestor.
Rather
,

it
wa
s

understood
to be

based on a set of
positions

or
statuses

(
Kitaoji, 197
1
; Shimizu, 1987
).

It


13

represent
ed


a personalized relation to a corporate group based on work


and

it
encompass
ed

the major aspects of

both

social and economic life

(Nanake, 19
7
3
)
.
On
e of
the aspects of

the

ie

wa
s that it include
d

more than just living members who perform a
variet
y of domestic, economic, political and

religious functions;

the dead
were

also
considered essential members (Shimizu, 1987, p.85).
The household

wa
s recogn
ized as
an independent entity separate from its li
ving and dead members. Even if it
cease
d

to
exist as a corporate body, losing its living members, it retain
s

its n
ominal existence as a
named entity with its own origin
s

and history.

The fundamental goal of
the
ie

wa
s household continuity, rather than
the

well
being o
f

individual members.
E
mphasis

wa
s

placed

on the preservation of household property,
occupation,

reputation,
and

artistic or cultural capital (Kondo, 1990, p.122).
Like a
corporation, in order to guarantee its organizational survival, it
aim
ed

to fill its key
positions in such a way as to maintain continuity. A number of
strategies
we
re adopted

to fill positions in the
ie

to

achieve this;
the most significant
we
re the paired roles of

male and female household head

.

The paired male and female
household heads
played

different roles in the household but
shared a mutual obligation to maintain its continuity. Men governed the household,
playing a central role in productive activities. On the other hand, women managed it,
supporting the productive l
abour in areas such as
textiles

and brewing,

and
managing
the
domestic economy
.

B
etween the 10
th

and 11
th

century, when this paired partnership
of men and women was first established as the basic unit for the operation of

the

ie
,
both male and female house
hold head were deemed to have equal rights over the
household property. This was called
fuhu douzai
,

which literally means
equal

property

rights between husband and wife (Tabata,
1987,
p.59;

Inuma
, 1992, p.165). The

14

principle of
fuhu do
u
zai

assume
d

the shared
responsibility

of both male and female
household

head for the preservation of h
ousehold property,
and signifie
d

that not only
could the male household head control the
property

of
his wife
, but also t
hat wives had
the right to control their husb
and

s property (
Inuma
, 1992, p.163). In this context,
financial responsibility continued to be allocated to women
as

an

aspect

of internal
household management, and the position of female household head was as significant as
that of male household head, wh
ich
carried with it
responsibility for the external
activities of the
household
.

Women

s role in financial
management was
also
strongly linked to the fact that
it was
they who would give birth to the next household head, making them cruc
ial

to
maintaining continuity (Wakita, 1992, p.12). Only

one member of the family c
ould
be

the

successor to the permanent members of

the

ie
, while the non
-
permanent members
,
including

sons and daughters
,

had to

leave at the
ir

marriage. Generally, the eldest s
on

(
musuko
)
wa
s chosen to be the successo
r,

and
his
marriage was re
garded

as a way

of
recruit
ing

personnel

(a new daughter
-
in
-
law, called
yome
)

to

the family.
However,

a
son
-
in
-
law
might
also

be
adopted

as the
next household head

in order to maintain the
p
erpetuity of

the

ie
. This was a very common strategy among wealthy farmers and
merchants in later years to enhance the family business; the
y

could choose an able and
loyal man from among their apprentices or kinsmen
to be
the next manager, while
ensuring f
amily property was inherited through their daughter (Ueno, 1987, p.78).

T
he continuity of

the

household was considered

to be

more important than gender.
In
this context, w
omen often succeeded

to

the household property i
f this was a way of
maintaining

stability.

W
idows

who outlived their husbands

played a
particularly
significant role in maintaining household
s

and family businesses (Lebra, 1991
;

Inuma
,

15

1992, Wakita, 2002
).
These widows were called
goke
, which before the 10
th

century
signified the heir w
ho inherits household property (
Inuma
, 1992). The potential crisis of

continuity

that
occurred

with the death of the male household head was often averted by
the
goke
,

who took on the role and position of her husband, managing the
household
finances and pr
operty and laying the foundation for her son

s succession as the next
household head (ibid., p.175). The presence of
goke

and their high status within the
ie

system was one of the significant features of medieval Japan (Wakita, 2002).


3.

The
e
volution of
Japanese
w
omen

s role as
f
inancial
m
anager
s

Tokugawa Shogunate Era

(1603
-
1867)

Japan prepared for the coming of modernization under the
Tokugawa

r
egime.
Following
Ieyasu Tokugawa
,

the

establish
ment of

a central government in 1600, the country was
governed
by
the House of Tokugawa for more than two centuries.
During this time, t
he
country was cut off from any international contact except

with

China and the Dutch,
who were

only

allowed to retain commer
cial ties with one area in the s
outh of Japan.
This isolat
ion from
foreign

trade afforded the country the opportunity to set up a social
structure which
subsequently
enabled it to resist the unwanted element
s

in the
wave

of
Westernization which swept the country at the end of
the
nineteenth

century.

A significan
t feature of the Tokugawa period was that there were critical differences
between the ruling
samurai

class and the other classes in terms of the position of
women. In the samurai class, which enjoyed the most privileged position in Tokugawa
society, there
was a clear demarcation between the roles of men and women
.

Women
were kept out
of
the
public sphere, which was dominated by men, remaining in the
backroom of the house (
oku
). In contrast to medieval times, women had no involvement

16

with economic activities

or accounting work.

On the other hand, women in the commoner class, which was unaffected by Confucian
ideology, enjoyed a more significant role. Women in the merchant class, in particular,
occupied important positions as bookkeepers (Maxon
, 1976) and fin
ancial managers,
running the business in the absence of their husband (Wakita
et al
., 1987).

In practice, merchant business
es

operated
using
the dynamics of
the
household
; t
here
was
little separation between economic and non
-
economic activities
. Although initially
established by kinship families
(Yoshino
,

1968, p.67)
,
maintaining the business
came to
be
more
important
than preserving biological kinship,

and households
gradually
started
to
take in members who were not from the same family
,

where
it would support
the
business.
C
ognate

inheritance was often observed among merchants


and
farmers


famil
ies

in contrast to the
samurai

class, where women were
excluded from
the family
succession. These practices resulted in significant changes in the natu
re of
the
merchant
class;
in
the Kyoto
-
Osaka region,

in the
w
estern part of Japan, where business
proliferated in the pre
-
modern period,

approximately one
-
third of the members of urban
households had no kin connection (Kondo
,

199
0
, p.163).


The structures
of the household and its dynamics, which defined the way the family
business
was run
,

reflected
the nature of contemporary business education, and the
position and significance of women in the merchant family.
Merchant households were
built in two parts
:

t
he shop where the business was run,
the

mise
, and
the

oku,

the inner
space where the master and his wife lived.

In the
mise,

two types of employees existed
:

the apprentices who mainly came from related families and who were considered
members of the house,

and other servants who came from outside the merchant family
.
The young apprentices, called
detchi,

were
boys who usually joined the household

17

around the age of ten
and worked
until around seventeen
. They

were engaged mainly in
housework and were not all
owed

to

participate
in the main work of the business.

The
apprentices

and
non
-
kinship employee
s

alike
lived in the same residence with the
master

and were members of the house whatever the kinship.


For
detchi
, there was no clear distinction between worki
ng hours and non
-
working
hours
,

and they were subject to the master at all times. The lack of
demarcation between
work and life

was an
important
aspect
of the
ir

business education and training. While
living
o
n the premise
s
, young apprentices were

expected
to
learn
the informal codes of
business such as

how

to talk and bow, how to package and weigh, to discriminate
between good money and bad, safe customers and poor credit risks,
and
to appreciate
the sanctions against giving short weight or breaking guild a
greements

(Vogel
,

1985)
2
.

After a long training period, the master of the family business would give an apprentice
a branch of the household,
called


dividing the shop curtain

3
. He
would give
the
apprentice capital and goods to set up shop and introduce
him to the merchant guild to
guarantee cooperation from fellow merchants
.

Bookkeeping and accounting practices in merchant business involved the
participation

of these household members. A
lthough the Western style of double entry bookkeeping
did not preva
il in Japan until the later part of
the
nineteenth century, in this period
,

merchants already had a

double
-
classification


system of accounting (Mckinnon, 1994;
Ogura
,

1982). The entries in the books for the day

s transactions were checked against



2

After a few years of service, a
detchi

would progress to a
tedai

and take a
more active part in
managing
the shop. If the
tedai

proved himself as a potential employee, he might progress to
banto,

head clerk, and
become the chief manager responsible for all the business.

3

The branch of the household given to a non
-
kinship clerk was called
bekke
.
Another branch of the
household, called
bunke
, was given to blood
-
related kin.


18

corresp
onding entries in other books. When two corresponding entries were found, a
small red check mark was stamped next to each. This process of checking was generally
done every night and involved all the employees in a large
-
scale merchant business.
The
female

head of the household business was often involved in this checking of account
books, in addition to helping with the bookkeeping (Hayashi,
1987,
p.158).

In this context, where business operated within the dynamics of the
ie
, skilful h
ousehold
management
was particularly

valued in merchant families as having the potential
to
enhance household prosperity. Thriftiness was particularly important, as is illustrated in
the instructions left by one merchant in 1610.
Frugality was not regarded
as the

feminine qua
lity advocated by men
,

however
(see Walker 1998)
;

instructions on
household management

and

injunctions

to pract
is
e frugality
were
often
given to
the
sons who we
re expected to
take over the

business.

With your own hands kindle the fire under the stove for b
reakfast and dinner, damping
the embers afterwards

.Going out behin
d the house, collect all the bi
t
s and pieces of
rubbish: small length
s

of rope should be cut up for mixing in cement

fragments of
wood or broken bamboo, even as small as half an inch,
should be stored, cleaned, and
used as fuel for watch
-
fires;

when buying things for the first time

go out and buy for
yourself. Buy at the cheapest rates, and make careful note of the prices.
Afterwards

you will know whether the articles he

(the servant) b
rings are too
expensive or not

Housekeeping may be said to be a matter of firewood, charcoal, and
oil

no matter what his calling, if a man does not take these troubles upon himself, he
can never run a household successfully

Scrape the bean
-
paste morning an
d
night

[Mix this together wi
th bits of vegetable scraps and]
give this to the
serving
-
maids for breakfast and dinner as a side
-
dish
(Uno, 1991, p.33).

As in medieval times, the paired household heads enjoyed equal status, and
the
female
household head
had

substantial control after the master and the son

who
was the heir to
the business
.

In a context where the household was closely linked to its
business
, the

19

role of the female head of household was to keep the household in proper order and to
take care of
the employees, who were considered crucial to the
success

of the business.
T
he

importance

of
the
woma
n

s
role

in business was well acknowledged within
merchants


families. The case of

Ju
san

Mitsui, who

married
Takatoshi Mitsui
, illustrates
the importance p
laced upon the wife by merchant families.
Takatoshi

was the first
master of
Mitsui
,

o
ne of the

most

prominent merchant families in Japan
, which

dealt in
clothing and finance
,

develop
ing

itself as
a
zaibat
s
u

family in later years.
Jusan

played
an important
part in personnel management and household management,

discussing

the
running

of the
business

with Takatoshi

while she prepared the breakfast of her retainers

(
Hayashi
, 1987
, p.153
). When there was trouble between
the
employees and
Takatoshi,

she met the p
arents of the employee
s

concerned.
Takatoshi v
alued the contribution of
his wife and position
ed

her significance
as
equivalent to hi
s own:

The wife is the god of
wealth as much as the husband. If the wife has bad intention
s
, the business will be
ruined. I
f she has good intentions, the business will flourish


(Paulson
, 1976, p.11).

Women
household

heads did not just play a supporting role to male household heads;
they often took centre stage if the male household head died or was incapable.
Juhou

(1590
-
1676), the mother of
Takatoshi,

was actively engaged in the family business,
while her husband devoted his time to reading
poetry, playing cards and art.
Her talent
for business and client management
w
as

widely
recognized
,
and
subsequent generations
of the Mitsui family paid great respect to Juhou, calling her the founder

of
the

Mitsui
business.

In merchant families of the Tokugawa era, women

were called
o
kami
-
san
,

which means
female proprietor
, and
not

o
ku
-
san,
which literally signifies wives who
stay in the
backroom of the house

(this is where
the samurais


wives were located
)
.

Bookkeeping

20

and accounting work was a central task for the women in merchant households.

Mine (1771
-
1828), the single daughter of a merchant in Wakayama

in
w
estern Japan,
married a man, who at 21 succeeded to the household business. She engaged in
recording the flow of goods through the shop, bookkeeping and cross
-
checking the
accounts (Hayashi,

1987,

p.158).

She
also
supported her husband by welcoming visitors
and keeping
a detailed record of the gifts they were given

(
including
the

type of gift and
its volume).

Women also played an important role in education in the merchant class. Unlike the
education given in the samurai class, which was over
-
burdened with theory, educat
ion
in the non
-
samurai classes aimed at teaching students practical skills such as reading,
writing and
arithmetic

as well as some practical
wisdom

(Dore, 1984
, p.52). A number
of women worked in educational institutions called
terakoya
,

which

were built to
instruct children from the commoner class.

In Victorian Britain, accountancy skills were

advocated as one of the ideal feminine
traits
(Walker, 1998); the similarity was also found

in merchant families

in Japan
.
Women who were capable of usi
ng precise and up
-
to
-
date methods to do the accounts
attracted male attention and marriage proposals (Maxon, 1976). In

a

novel written by
Ihara Saikaku

(1642
-
1693)
, who was
the great novelist of the
Genroku
period

(1680
-
1770) and widely read

among the
comm
oner
class,
the reader is given an
instructive depiction of
an

ideal wife

.

Night and d
ay for three years his wife diligently performed many tasks which married
life required of her, carefully spinning raw
-
silk thread by hand, supervising the weaving
of

cloth by her servant woman, looking after her husband’s personal appeara
nce,
burning as little fuel as
possible for economy’s sake, and keeping her expense accounts
accurate and up
-
to
-
date. In fact, she was just the sort of woman any townsman would

21

want i
n his home
(
ibid.
, p.90).


The
p
eriod
s

of
m
odernization and
i
ndustriali
z
ation
(Meiji and Taisho
p
eriod
s
:

1868 to
early twentieth century)

The modern period began with the defeat of the Tokugawa regime in the middle of the
nineteenth century and the establishment of the
Meiji Government

in 1868. After
isolating
itself

for more than two centuries, the country opened up commercial and
diplomati
c contacts with Western countries. In the course of the Meiji Restoration, the
Meiji Government

made a series of social and political reforms, encouraging
industrialization

and the increasing of national power in order to

catch up with the
West

. The nati
onal
aim
of promoting

industrialization

was called
fukoku kyohei
. This
literally means rich country, strong army; the government took initiatives to make the
country an industrially advanced nation and build up its
military

power to enable it to
defend its

independence. A number of economic, legal and social reforms were
embarked upon under the aim of transforming Japan from an agrarian to an
industrial
-
based economy. The government imported W
e
stern technologies, including
double entry bookkeeping, and modern industries were set up, which eventually
developed into
zaibat
s
u
. These

large
-
scale modern industries were the foundation of the
remarkable industrial progress made during the last decade o
f the 1800s and the early
1900s.

The business environment and legal framework for external reporting were also
reorganized. The family business, the type of business organization prevalent in the
Tokugawa era, came to be regarded as limited, and the concept of joint stock companies
was in
troduced as a more rational form of modern business organization (Yoshino, 1968,
p.60). Even after the establishment of the stock market, the majority of
zaibatsu
,

22

corporate groups and finance conglomerates held shares

mutually
, and corporate
ownership was

limited to corporations themselves rather than
including
external
shareholder
s
. This led to low priority being given to corporate

reporting (Mckinnon,
1994). These corporate groups were regarded as the successors to the traditional

ie
, and
it was widely f
elt that, since the shareholders were family members
rather

than outsiders,
there was little need for accountability (Cooke, 1994, p.44).
As
the

stock
market

did not
function as a major source of finance for industry, banks became the major providers of
th
e long
-
term investment required for the rapid industrialization of Japan (Shiba and
Shiba, 1997, p.209). The Commercial Code introduced in 1899 was based on the
German Commercial Code, which was orientated towards creditor protection. Although
it
formalize
d

corporate reporting regulations in Japan,
the

financial reports prepared by

Japanese corporations were highly inconsistent both in quality and quantity (Fujita,
1966
).
However,

there

was no pressure from outside parties to improve the quality of
disclosu
re under the Code (Mckinnon
, 1984
,

p.141). Under the national goals of
modernization and industrialization, the relationship between banks, corporate clients
and shareholders had been
shaped s
o

as

to foster shared interests rather than conflicts.

The
emergence of large bureaucratic enterprises brought critical changes in the nature of
business

and consequently influenced the
role
of women

in accounting and finance
.
First, the large merchant houses from the
Tokugawa

period transformed themselves into
bu
reaucratic organizations, losi
ng their inter
-
familial nature.
The two parts of the
merchant household
,
the

mise
, where the business was run

and the
oku
, the inner space
where the master and his wife lived,

came to be separated
. A
ccordingly, household
accou
nts came to be kept separately from the shop

s capital (Kondo, 199
0
, p.167).

The
master of the house ultimately moved out and commuted to the shop.
In large

23

enterprises, non
-
kinship apprenticeships created
a
distance between master and
apprentice. In some
case
s
,
the
zaibat
s
u

families totally withdrew from the management
of their enterprise and instead hired executives who were selected on the basis of
personal competence (Yoshino, 1968, p.86).
As
merchant business
es

changed,

women
started to lose the influe
ntial role they
had
previously

enjoyed

when business and
domestic life were both

pursued on the same premises (Hayashi
,
1992).

The emergence of large modern enterprises also helped to create a wide gap between
employers and employees and contributed to the new social class structure. Lacking the
skills and knowledge required to work with modern technology, traditional merchants
fa
iled to become leaders in this new
industrialization

period. Even the
zaibatsu

Mitsui,

one of the most prominent commercial families, only managed to survive by adopting a
new mentality quite unlike that of the traditional merchants (Yoshino, 1968). Those
traditional merchants who failed to adapt themselves to the change formed the industrial
proletarian class, which constituted the majority of the workforce. On the other hand,
many of the new, innovative
entrepreneurs

in the Meiji era came from the
samurai

class,
who were encouraged by the government to become industrial leaders. The government
paid attention to the distinctive qualities of that class, such as education, a sense of
social responsibility and devotion to duty
. The
se

newly created businessmen
w
ere

called
jitugyouka
,

men who undertake a real task

, and
were
distinguished from the merchants
of the Tokugawa era. Thus, the new business model was an extension of the class
structure of the Tokugawa era; managers were mostly former
samurai,

and the w
orkers
were drawn f
r
om the for
mer common
er class (Yoshino
, 19
6
8,

p.69).

In spite of the changes brought by industrialization, some traditional Japanese
enterprises persisted. The growth of modern industry was so rapid that it failed to

24

embrace all the
pre
-
modern economic sectors (Saso, 1990, p.28). This led to a clear
-
cut
dichotomy between modern, capital intensive
,

technologically
-
based industry
,

which
was dominated by large enterprises
,

and the traditional industries made up of a large
number of small

family businesses.

The di
chotomy in business and industry

was also connected with

the dichotomy in
society
and
reflect
ed the changing nature and role of the traditional Japanese household
(
ie
).
The
Meiji Government

set out to create a

family
-
state struct
ure, merging the
individual family with state power and positioning the emperor as the great father.
A key
step was
to build
a
patriarchal family system through which the state
c
ould exercise its
power (Miyake, 1991, p.270).
The
Meiji Government

rejected t
he
practice
of cognate
inheritance prevalent in the
commoner

class and limited the family succession to men as
was the case with the
samurai

class (Ueno, 1987
, p.78). The traditional Japanese
household (
ie
)

eventually came to be

replaced by the patriarchal

family system
instituted

by the Meiji Government
.
In this family
-
state structure, the role of women
was to serve their men and to maintain the continuity of the Japanese patriarchal family
system.

It was seen as important for women to manage the household

accounting

in
such a way as to accumulate savings which could then be used to fund
the new
industries and develop military power (Komori,

2007
)
.
W
omen lost the power they had

had

in the traditional household

(
ie
)
,

and

the social function of
household
accounting

became
to contribute to the nation

s savings.

However,

many

communities were beyond the reach of the state (Nolte and Hastings,
1991, p.153),
and the
majority of traditional agricultural villages were left unchanged.
In

these
traditional areas,

women
retained
significant power

and
manag
ed

the household

businesses
.


25

In her study of the role and position of women in
agricultural
households
of the Meiji
era, Tanahashi

(1995
) highlighted that women played a crucial role in the financial
management of

household businesses. Under the Meiji Civil Law, established in 1898,
women

s property rights were not
recognized

and women were even prohibited from
managing the dowry property. In promoting the family
-
state structure, the
Meiji
Government

used state pro
paganda (

Ryosai Kenbo

) to define the ideal role of women
as
good wi
v
e
s

and wise mother
s

(Oki, 1987). However, in her study of the
li
ves

and
work of women in
farming families

in the

Meiji era, Tanahashi stressed that the role and
position of
women
in
practice

were different from those legally defined and advocated
by the
Meiji Government
.

Sae

(1867
-
1966) married the son of a landowner
,

who died when she was 32. After her
husband

s death, she managed the household business until her four
-
year
-
old son w
as
old enou
gh to succeed to the business. She cross
-
checked
her employe
e
s


accounts

book
against the corresponding entries in other books everyday, and made major decisions
regarding asset and land management and the selling price of rice, the main product

of
their business. Externally, she was
recognized

as the representative of the household;
whenever there was a possibility that tax provisions would change, the mayor asked her
opinion as the major landowner in the village (Tanahashi,
1995,
p.506).

War
p
eriod and
p
ost
-
w
ar Japan

Up until the Second World War, the traditional sector continued to exist: Japanese
society was split into two, with
one

part

focusing on industrial
development
, and the
rest following the traditional business model. E
ven in
the 1920s
,

Japan was
predominantly a country of family farms, family workshops, and family stores (Taira,
1970, p.3). Around 62
%

of women worked in small
-
scale family agriculture without

26

payment in the early 1920s
;

62.4% of women worked in the primary sect
or, 16.3% in
the secondary sector and 19.5% in the tertiary sector (Kawashima, 1995, p.273).

When the war started, however, the war regime

assumed

control over the whole of
society.
The
Japanese government not only controlled
the entire
economy but

also

in
itiated a number of policies to strengthen
national
unity

and

accumulate capital

to
support military and industrial development
. Savings goals were set by the government
for
Japanese citizens
: they were ordered to save first 8 million yen and then 23 milli
on
yen
. Women proactively responded to the role
given them
by the government,
coming
together

to share ideas and
give
mutual

support in
household accounting practices
(Komori,

2007
).

Cooperation among neighbours was particularly
emphasized

as a way of enhancing
community spirit.
Fujin no Tomo
, one of the women

s magazines which had played an
important role in supporting women

s household accounting work since the onset of the
Meiji era, encouraged this community spirit

by urging its readers

to share their
household
accounting

problems with
their neighbo
u
rs:

Every household economy has its problems, whether big or small. We could all improve
our own household economies. We should not just be thinking how I can make

my
household accounts


m
ore
efficient
. We should be thinking how can we make

our
accounts


more efficient
(
Fujin no Tomo
, 1993, p.60)
.

Under the strict control

of the
war regime the differences

between classes became less
clear and
society
as a whole

became like

the
traditional Japanese
ie
, taking on the
household’s old role as the accumulator of savings for the nation
.


The stock markets were also under the rigorous control of the government during the
war. The eleven stock exchanges in the country were unified into
a single quasi
-
public
corporation, the Japan Securities Exchange (Shiba and Shiba, 1997, p.209)
.


27

The war regime set down the basis of the social structure which operated in post
-
war
Japan. After the defeat in the Second World War, the Allied Forces embarke
d on the
drastic reform of Japanese society, with the aim of rebuilding Japan as a democratic
country. The
z
aibatsu

were dissolved and private regulation was promoted. This was
accompanied by the closure of the Japan Securities Exchange in 1945, followed b
y the
enactment of the Securities and Exchange Law and the introduction of external auditing
by Certified Public Accountants in 1948.

The break up of the
zaibatsu

also led to the emergence of independent shareholders.
When the Japanese securities market r
eopened after the Second Word War in 1949,
individual investors held more than 60
%

of all shares listed on stock exchanges. As
soon as the dissolution of the
zaibatsu

was ordered, the shares held by them were taken
away and distributed among the general pu
blic. However, this increase
in

independent
shareholders was soon to be replaced by cross
-
shareholdings among former
zaibatsu

firms. Throughout the 1960s, companies increasingly sought stable relationships with
shareholders who would hold shares for the long term
,

in an a
ttempt to prevent
unfriendly

takeovers (Seki, 2005). Table 1 shows how the investors in Japanese shares
chang
ed in post
-
war Japan.

Table 1. The distribution of share ownership in Japan
,
by

type

of shareholder




Shareholder distribution in
Japan (%)

1950

1970

1980

1990

2000

2003

Government

Local Government

3.1

0.6

0.4

0.3

0.2

0.2

Banks,

Trust Companies

12.6

13.7

17.5

20.9

19.2

17.4

Pension
Trust
s

NA

0

0.4

0.9

5.5

4.5

Investment Trusts

NA

2.1

1.9

3.7

2.8

3.7


28


Life and Causality Insurance

NA


13.7

16.1

15.8

10.9

8.0

Other Financial Institutions

11.9


3.4

3.8

3.3

1.4

2.1

Other Business Corporations

11.0

23.9

26.2

30.1

21.8

21.8

Foreign Shareholders

0.0


4.9

5.8

4.7

18.8

21.8

Individual Shareholders


61.3


37.7


27.9


20.4


19.4


20.5

Total

100.0

100.0

100.0

100.0

100.0

100.0



Source; Seki, 2005, p.378



Interdependent relationships were formed not only among corporations through
cross
-
shareholdings and among industrial groups of
keiretsu
, and but also between
corporations and auditors. The independence of auditors
ha
s always been questioned in
Japan (Mckinnon, 1984; Sakagami
et al.
, 1999)
: professional auditors often have had
long term
relationship
with company directors or have been former

employees of the
compan
ies they audit (Mckinnon, 1984
,

p.25).
What often puzzled people outside Japan
is the fact that a
uditors have rarely been sued for negligence, even though there have
been cases where accounts have been materially incorrect (
The Accountant
, 1991, p.9).
In the post
-
war period, t
he interdependent
relationships between industry, business and
auditors were considered vital for the fostering of business development. S
uch a
position was reflected in the comment
that the accountability expected in the West does
not exist in Japan (Kagel
et al
., 1988).

Interdependent relationships which support industrial development
extend

into the
social structure. In post
-
war Japan,

most agricultural land has been sold off and young

29

people have gradually moved into the industrial sectors of the economy. These young
pe
ople have established their own families, typically made up of a single couple and
their children
,

in the cities. This new type of family has been described as the

Japanese
contemporary family


(Kimoto, 1995a; 1995b; 1997) and it is now the prevalent fami
ly
model in Japanese cities. At the same time, housewives have become a key social group
in Japan
4
. As the household has lost its nature as a corporate entity and its productive
function, its function has become mainly that of reproduction.

Instead, Japanese companies have assimilated the corporate nature and productive
function of the
ie

(Ueno, 1994
). The social structure in post
-
war Japan was constructed
in such a way that businesses play a central role in society. This Corporate Society
fe
atures strong gender
demarcation
, which places men as the core members of corporate
management and women in the domestic role, supporting the male corporate warriors.
These assumptions about gender roles are interwoven in the
management

practices of
Japane
se corporations. A lifetime employment system generally applies to full
-
time
employees



overwhelmingly
men



but
not to the women who fill most part
-
time posts.
Both the seniority system and the acquisition of

intellectual skills


(Koike, 1996)
(the
skil
ls
encouraged in the business education
) assume the life
-
long commitment of
employees, a commitment from which women are generally barred by their social role.
This leads to the extremely low
representation

of women in higher positions in the
corporate hie
rarchy.

Only 10% of administrative and management positions in Japan are
occupied by women, while they fill 61% of clerical and related posts

(Ministry of
Internal Affairs and Communication, 2005).
The gender
-
biased nature of Japanese



4

The
prevalence

of housewives is a late development compared to Western
industrialized

nations,
where a large proportion of women were already housewives in the nineteenth cen
tury (Tanaka,
1995, p.305)


30

companies is making m
ore women turn to the accounting profession as a way of
building an independent professional career and lifestyle (Komori, 2
00
8
)

On the other hand, in t
he Corporate Society, women
have been

expected to support
corporate activities from within the household
. Japanese companies and the government
constructed the post
-
war Japanese family as a site for the reproduction of the human
resources that corporations need and to generate savings for
corporate

investment.
Companies have
actively

promoted the new urban l
ifestyle and
the

new family model to
people coming out of their villages to
se
ttle in the cities (Kimoto, 1997, p.11).
T
he
government has
taken
the

initiative

in promoting savings, organizing study groups and
sending officers to different districts in Japan to spread the idea of lifestyle planning and
the importance of savings activity. This saving promotions movement
led to the
establishment of the

Central Cou
ncil for Savings Information

(CCSI) in 1952.
Women
in Japan proactively responded to their public role of supporting corporate activities
through household accounting (Komori and Hum
phrey, 2000; Komori,
2007
). Their
active involvement in household accounti
ng and its tradition
o
f

d
etail and precision
are
unique to the Japanese context
.



T
owards a

f
楮anc楡i
s
erv楣i
n
慴a潮


Since the early

2000s, the relationship between women and investment activity has
become stronger in Japan. A number of securities companies
, in conjunction with the
Tokyo Stock Exchange,

now hold
investment seminars for women to promote

their
understanding of

investment
. Women investors a
re beginning to feature in the mass
media, not only in Japan but also internationally.
In 2009 the
Financial Times
, for
example,

ran a
feature about Ms

Watanabe, a
n a
ctive housewife
speculator, while in

31

Japan an increasing number of book
s and articles ha
ve

been publish
ed that talk about
the significance of investments for women a
nd encourage their involvement.
The
increasing involvement of women in investment
activities signifie
s

that the traditional
role of women in the household and the
ir relationship with household

accounting
are
undergoing profound change.


The

trend has been

driven by the interaction between women’s demand for investment
activities and the supply from banks and business corporations eager to offer them such
opportunities.

Japanese women
have
shown

a keen interest in investing in property as well as in stocks

and other financial products.
A
The first women
-
only

IR seminar in March 2006 held by
one of the major banks,
attracted applications from some 500 women for 180 seats.
Their growing interest in investment
activities is not only a reaction to the hyper
-
low

interest offered by banks, but a
lso reflects their demand for independence from their
traditional role in the household. This is also evident in women’s increasing awareness
of their entitlement to a share of the household assets.
According to a study con
ducted
by the Institute for Research on Household Economics, approximately 46
%

of women
interviewed in 2000 felt it was important to protect their entitlement to joint assets; this
figure had increased to 80
%

by 2006

(Mihune, 2006)
.

The growing awareness a
mong
women of their entitlement to property ownership signifies a change in the gender roles
that have historically sustained the integrity of the Japanese household; old attitudes are
dissolving, with household members becoming more individual
-
orientated.



As interest among women grows,
companies, ba
nks and securities companies have
intensif
ied

their efforts to

attract more
women investors. These companies aim to

32

increase diversity
among
independent investors by attracting

more

women. Since the
end of the 1990s, Japanese banks and business corporations have focused on attracting
more independent shareholders and improving their relationship with these
investors.

These companies have been paying particular attention to female inv
estors, whom they
consider more careful and serious, qualities conducive to long
-
term i
nvestment
relationships (Kawabuc
hi, 2005).


This is driven by
the trend
s

reflected

in Table 1:

the practice of cross
-
shareholding has
steadily declined, while the presen
ce of foreign investors
has
grown

significantly
.

C
ross
-
shareholding is
criticiz
ed as
inhibiting free movement of shares in the market
(Seki, 2005, p.379). Foreign direct investment has also increased
, with
foreign
companies
acquiring considerable
stakes
in large Japanese firms such as Nissan
and

Mitsubishi Motors. As the capital market has developed
,

driven by pressure from
international

forces, banks have gradually l
ost their influence.

Manufactur
e
rs
that

have
grown

substantially as a result of
successfu
l

operation in the international market are no
longer reliant upon bank finance. The bad loans accumulated in the aftermath of the
collapse of the bubble economy
and

the
continuing
recession

ha
s

further

damaged the
banks


positio
n.
Japanese companies are
i
ncreasingly
overhauling their corporate
governance processes, introducing external boards of directors and
stre
ssing the
transparency of their corporate management.

Thus
the involvement of women in finance
is shaped by the mutually supportive cycle
betwee
n women and corporations; a
s women demand greater access to investment
opportunities and Japanese companies seek t
o attract more female investors
.

The changes

may be

linked with the public economic policy o
f the Koizumi regime,

33

which aim
ed

to rationalize the economy and finance by making it more transparent
under market mechanisms.
In 2004,
the
Financial Service Agency set
up
a

programme

they called
,

Moving towards a financial service nation


to reform
the
financial system.
Its aim
was

to
establish

an

internationally

attractive financial market by

shifting
administration

from

the

public to
the
private sector
and encouraging people to engage in
direct financing
using a diverse range of

high
-
quality financial products (Fi
nancial
Service Agenc
y, 2004).
In this program
me
, the

shift in emphasis of household finance
from

savings


to

investment and asset management


wa
s aimed at revitalizing the
economy by mobilizing the huge savings currently frozen in banks offering
close to
zero interest rates.
The Central Council for Financial Information (CCFI) was set up in
2001, with the Bank of Japan working as its secretariat. The CCFI is playing a major
role in the disseminating of financial and economic information, running a wide ran
ge
of activities in schools and local communities to promote sensible financial and life
planning.
The activities of w
omen investors
could be seen to have

contributed to

the
business corporation
s


shift from group
-
orientated financing in a development that

could
further enhance the transparency and diversity of
corporate

management.

Conclusions

This study explores the historical changes in the financial role women have played in
Japan, along with the changing relationship between corporations

and

househol
ds
. The
historical development of the relationship between women and finance reveals the
d
ynamic link
s

between corporate accounting and social development
; these links have
not previously been

highlighted in
studies

of corporate reporting and accoun
ting in
Japan.

In explaining the nature of corporate accounting, reporting and
auditing in Japan,
a

34

number
of studies have given their account from
the point of view of a

specific culture

and its distinctive nature of corporate governance.
By tracing the

changing women’s
role and position in financial management, t
his study highlights that the role of
account
ing and auditing as well as corporate governance processes are linked to the
development

of traditional Japanese households and the changes in social

structure that
support corporate development.

Since ancient times, women have been the managers of the domestic economy in Japan.
Their association with finance has been strongly linked to the nature of the Japanese
household (
ie
).
Their role as the moth
er of the future heir was considered central to
maintaining the
continuity of

the

ie
, while
female household heads had an important
role in managing the finance and property

of the household. This strong association
between women and finance continued in m
erchant households in the
Tokugawa

era,
where business and domestic life were pursued on the same premises and each
influenced
the other.

In a context where the dynamics of the household dictated the
forms and practices of business operation, the female ho
usehold head (
okami
-
san
) held
a significant position, bookkeeping, managing accounts and taking care of employees.

The modernization and industrialization embarked upon by the Meiji Government at the
end of the nineteenth century helped spread the influence of the ruling elite or
samurai

class, and helped to separate household and business operations. As the household
was
reduced to a site of reproduction only, women lost the power they had had in the
traditional merchant house. They were absorbed into the patriarchal family system and
given the role of accumulating savings through frugal household accounting, which
cou
ld then be used to fund industry.
But while

women
living in cities
became
oku
-
san
,
like the women of the
samurai

class
,
many agricultural villages remained unchanged,

35

and a divide emerged between these two systems
.


Th
is division was dissolved by the war r
egime and a new social
structure
was
founded
.
The war necessitated a social structure that would integrate society and encourage the
nation to come together. While the men
were
sent

to
the

battlefields, women worked
together to build up savings through the
ir
household accounting. The social structure
instituted by the war regime formed the basis of the Corporate Society in post
-
war
Japan, in which men were allocated the role of corporate warriors, while women were
asked to support corporate activities by ac
cumulating savings through household
accounting
. Thus the structure
of
the
traditional Japanese household (
ie
) was extended
across

post
-
war Japanese
society, with companies assimilating its corporate nature and
productive function and household
s

supporting

their activities. The Corporate Society
also
helped to
shape the
nature

of
accounting

and auditing in the corporate
arena
; the
strong gender dichotomy in society helped to shape a male
-
dominated corporate arena
which led to insider
-
orientated corporate go
vernance. The nature of the accounting
function in the

corporate
arena changed, was arg
uably reduced, as women’s

social
role

(as financial managers)

was
restricted within the household.


The recent
involvement of women with investment activities could be s
een as an
outcome of the intersection of changes in the corporate arena and changes in the
position of women within the household.

A
s a result of the increase in foreign investors
and growing pressure from the global community, insider
-
orientated
managemen
t

practices in Japanese corporations

have been
challenged
, and greater emphasis is being
placed on
corporate

accountability
to

external

parties.

These changes will also redefine
women

s social role as the supporters of corporate activity; their increasing
involvement
in investment
activities
will help

enhance diversity
with
in corporate management and

36

make accountability more important. At the same time, it must be
emphasized

that the
trend is partly inspired by women’s demand for independence. Increasingly,

women

are
seeking a life outside their traditional social role within the Corporate Society.
The
number of unmarried women and the divorce rate are
both climbing
steadily in Japan,
bringing about increasing diversity in terms of women

s lifestyles, and th
e deterioration

of the interdependent relationship between men and women.

A
s their involvement in
investment and
financ
e
grows, their
changing role
w
ill

inevitably

affect

the

interdependent cultural underpinnings of Japanese
Corporate Society.

There has b
een a call for accounting research that investigates accounting

and gender
by
venturing b
eyond the “professional” frame of reference (Cooper and Taylor, 2000;
Walker, 2003; 2008). This
study in particular highlights

the importance of
understanding the hist
orical development of the relationship between women and
accounting in different social and cultural contexts. In the Japanese context, where the
significance of women’s role is traditionally associated with the continuity of the
household, the inter
-
relat
ionship between household and corporation provides an
important frame for considering
its social and cultural underpinnings of

the accounting

function

in corporate ar
en
a
.


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