 Bismillah Khmanareem and As-Salaamu Alaykum ladies and gentlemen, we are back with corporate governance. In the previous session, we were talking about the Anglo-Saxon model and today we are going to talk about a very unique model. A model which has its own texture, has its own nuances and also its own idiosyncrasies. Now, this model is the Japanese model. The Japanese tend to do things differently. If we talk about their management, they have the Kaizen management model which has the Kaizen umbrella and within that Kaizen umbrella, there is the 5S model, there is the 3M model, there is the QCC model and there is the TPM model and many other elements and we can go on and on about that. Now, when we talk about the Kaizen umbrella, then it is basically entrenched in the Kaizen philosophy and the Kaizen philosophy is about continuous improvement through small steps and if we look at that whole philosophy, it basically resonates and reflects an Islamic concept of bad kismat hai boh shaksh jis ka aaj guzale ve kal se bhetar nahi. So, that whole philosophy is based upon that concept and the second one which is the 5S model of which companies are being internationally certified is basically five Japanese words Siri, Seaton, Siso, Shiketsu, Shikutse. Now, these five Japanese words basically connot Sufainis iman hai. They have institutionalized cleanliness in their institutions and that is why we see that the best products in the world are made by Japanese companies because they ensure the highest level of hygiene and cleanliness with continuous improvement of their product and services. Ladies and gentlemen, this same thing is also inculcated in the corporate governance model and when we are talking about the Japanese model, then it has some very unique features just like the Kaizen umbrella that I was talking about, it has 17 different sub elements. So, the corporate governance model of Japan also has that unique texture which we don't find anywhere else in the world and again because of that corporate governance model, what we see is that those companies have been able to collectively ensure some of the most optimal rates of performance and good governance in the world. Now, when we talk about the Japanese model, it basically revolves around the philosophy of Karatsu and today we are going to find out what does Karatsu basically mean, what does it stand for and what are its different components and how it is injected into the corporate governance framework and structure of Japanese corporations. So, ladies and gentlemen, we talk about the Japanese model. It's about the high level of stock ownership by affiliated banks and financial institution network. So, a very different element altogether, a banking system characterized by strong long-term links between bank and corporation and then, just like I was saying, promoting Karatsu, industrial groups linked by trading relationships as well as cross-share holdings of debt and equity, board of directors comprising almost solely of insiders and equity financing is considered to be pivotal. So, ladies and gentlemen, when we are talking about the Japanese model of corporate governance based upon the philosophy of Karatsu, then it is about collectivism. It is about togetherness. It is about moving forward, not in cutthroat competition with each other, but in collaboration with each other. So, the Japanese believe in the philosophy of collaboration, collaboration and collaboration whereby these strengths of different corporations and different stakeholders and shareholders amalgamate together to ensure that the highest level of performance can be achieved and the best environment can be given within organizations. All of you must be knowing that despite all the progress which has been made by Japanese corporations they still in the 21st century believe in lifetime employment. So, they keep their employees with them and then they believe in another thing. They believe in succession and that basically means that the most modern economy of the world still believes that if a good employee is leaving why not hire one of their family members into the organization and therefore they create these bonds of loyalty and linkage which goes on from generation to generation based upon the philosophy of Karatsu. Now, when we are talking about Karatsu then it basically is about how the different corporations and different stakeholders and shareholders collectively contribute to the very core of the top and strategic management and form a part of that. So, that is what it is all about. It is about that cross-shared holding of debt and equity. So, there could be different companies. It could be Mitsubishi, it could be Toyota, it could be Nissan. It could be different other companies like the Bank of Japan and others. They would not be competing with each other but they would be collaborating with each other. They would have cross-shared holdings between each other and therefore they would be sharing their strengths and positives with each other rather than pulling each other down. They would be pushing everyone up. The second thing which we see in this particular model is the element of strong financial inputs and strong financial linkages whereby the banks are playing a major role in the strategy and in the long-term outputs of a particular corporation. So, we see that everywhere. It is characterized like that and then the third most important element is that there are inside directors which basically ensure that the shareholders are directors so they have a direct stake in the organization and it is not like a mix of between insider and outsider directors. So, these are the fundamental elements or the fundamental essence of the Japanese model based upon the concept of Karatsu. Now, if we look at it a little bit more then we see that the main key players in this model are the main bank, a major inside shareholder, the affiliated company or Karatsu, a major inside shareholder, the management and amazingly ladies and gentlemen, the government. Interaction among these players serves to link relationships rather than balance paths as in the case of the Anglo-US model. So, ladies and gentlemen what we see is that in the key players we have sometimes even our own competitors as a part of it. We have the financial institutions which would be the main bank and a very unique feature is also the active participation of the government and therefore, this whole box model which is created with four major points basically interface with each other and ensure a more conducive environment of growth, performance and productivity. And as a result of that it also ensures that the stakeholders and the shareholders also protect the rights of the employees within the organization because it is not only maximization of profitability but it is also ensuring that a conducive environment can be created whereby creativity, innovation and productivity can be catalyzed and leveraged for the best possible results of that particular cooperation and that is very contrary to the Anglo-Saxon model that we see because in that particular model it's more about balance of powers and in this one it is more about participation. So, moving further on ladies and gentlemen, we see that in the composition of the board of directors the executive managers basically usually the head of different major divisions of the company and its central active study body are a part of the board of directors. So, we have that inside participation and we also have this level of motivation that employees can rise to become board members and even the chairman of the corporation which is very motivating and tends to instill this level of loyalty within the different stakeholders of a particular corporation in Japan. The regulatory framework is very much influenced by the government and there are a lot of regulatory controls which ensure that all the rights and privileges of the stakeholders and shareholders are protected by the government and therefore the government does not sit as a spectator but actually participates in the governance of different corporations. Disclosure requirements again are similar to other models where there are AGMs, where there are different annual reports, where there are audits and all of that wide range of information is always present for others to see how a particular organization is being governed. Then when we talk about corporate actions, we basically see that shareholder influence is required and there are necessary for payments of dividends and allocation of reserves, the election of directors and appointment of auditors and capital authorizations which is similar to the other models over here. There is not too much of difference between the two and when we are seeing the fifth element which is the interaction among players in the Japanese model then there is a very high interaction between the different players to strengthen the relationship. So, ladies and gentlemen, concluding this particular model, what we see is that it is based upon the Japanese philosophy of kuretsu, of cross existential relationships, of cross and mutual cooperation and also of ensuring that rather than just the tripartite relationship we also have the fourth element which is the government which plays a major role in this and what we see is that the banks are also playing a major role in the board by being an insider board member and besides that the most interesting thing is that rather than being competitive it is a collaborative model and that is the very essence of kuretsu which is the Japanese model of corporate governance. Thank you so much everyone.