There is wide agreement that governance in Japan during the period of “high growth” was based on a system of contributions from different stakeholder groupings, closely interlinked as “insiders” of the corporate finance and production process. In the meantime, however, the system has outlived its usefulness by becoming too complex for a mature economy. As a result, governance is moving to a system of “outsider” or shareholder participation and control. This transformation remains costly and time consuming because the closely linked system of stakeholder interests requires a stepwise introduction of profit-oriented governance in accord with acceptance of different stakeholder groups (the government, bureaucracy, management, suppliers, workers, etc.) This article concentrates on the question of why it has been (and is) so difficult to implement this turnaround, and if the current reform plans are up to the task.