Corporate governance enters a new era.

The article discusses the impact of corporate governance on the new Corporate Law, which is likely to come into force on July 26, 2005 in Japan. The Corporate Law was drafted to modernize the existing law, and is expected to have a big impact on corporate governance. The enforcement of the part of the Corporation Law that enables the delivery of merged companies' cash to former company shareholders in merger. Its enforcement is likely to be postponed because of concerns that it might promote foreign investment in Japan and increase hostile takeover bids in the Japanese market.