Although it is common for almost all major countries that the board of directors is placed between shareholders and management, both its formal system and role in practice vary among different countries. Chapter 4 will compare the role of independent outside directors in the United States, Japan, and China from the point of view that the board of directors is an intersection of internal governance and external governance. As a formal organizational structure, the US board is a one-tier board with committees and has wide decision-making power over important business decisions. In practice, the US board is a monitoring board, not only a compliance monitor and conflicts of interest solver, but also an efficiency referee. Because of the existence of the company auditor (kansayaku) and the board of company auditors, the Japanese board is often misunderstood as a two-tier board, but it is substantially a one-tier board with an audit committee. The Chinese board system looks like the German type two-tier board with a supervisory board, which includes employee representatives, and a management board, but the supervisory board’s monitoring function is weak in practice.