Investors' gripes in Japan are getting louder. With mitsubishi UFJ Financial Group Inc under a cloud over negligence on money laundering and with Japanese regulators this month introducing new rules to enhance disclosure and accountability, it is worth looking at the state of corporate governance in the world's second biggest economy after the United States.

A discussion paper from the Knowledge@Wharton series makes it clear that Japan will never have a system where shareholders are in charge. Concern for a huge range of stakeholders, like customers, employees and suppliers, will always be part of Japan's corporate landscape. And shareholder rights are less important than the survival and success of the business.

But is that necessarily a bad thing?

A one-Anglo-American-size-fits-all model of corporate governance around the world just doesn't work any more, says Pranab Bardhan, professor of economics at the University of California, Berkeley .

"There is an increased appreciation of the fact that countries have different political contexts and the bargaining powers of the different stakeholders in the economic system - owners, managers and workers - vary. 'One - Anglo-American - size fits all' is no longer the prevailing perception.

"In the American system the owners are dispersed and relatively weak, managers powerful and often overpaid, and employees not well-organized. This is not the case in much of Europe or Japan. This gives rise to a different sustainable pattern of corporate governance, even though there is more recognition now of the mounting costs of social protection, the need for more labor flexibility and protection of minority shareholders against insider abuse."

Critics might argue that the more open US system encourages more innovations.

But then what do we make of Toyota? Take a look at the enormous size of the board in Toyota's 2006 annual report.(Here's a tip, go to page 50).

And then remember that Toyota is now overtaking General Motors as the world's biggest car manufacturer.

Being shareholder-focused is one thing. But the lesson from Toyota is that it's also important to do better than your competitors.