Corporate Governance: Cross-Shareholding and Its Impact on ESG Ratings

An essential facet of business operations, corporate governance has increasingly come under scrutiny for its pivotal role in shaping corporate behavior and performance. Among the various governance structures, cross-shareholding is particularly noteworthy due to its complexity and prevalent adoption, especially in economies such as Japan and South Korea. Cross-shareholding substantially impacts corporate governance, thereby influencing a company’s ESG performance. The significance of cross-shareholding transcends conventional governance issues, influencing companies’ ESG ratings—a metric that investors are progressively employing to assess corporate sustainability and ethical practices.