We examine the effects of foreign directors on firm performance using a panel data of non-financial listed firms in Japan from 2004 to 2015, focusing on firms that introduce foreign directors to boards for the first time. We find that firms having foreign director are of larger size, larger foreign sales, higher foreign ownership and higher ratio of outside directors than firms without. We also elaborate that first introduction of foreign director is associated with changes in firms ‘ownership structure or in business strategy in order to expand oversea business and strengthen corporate governance. Overall, our empirical analysis shows that the effect of foreign director on firm performance is negative; ROA and Tobin’s q of firms with foreign directors are lower than firm without; market reacts positively to the first introduction of foreign director but not statistically significant.