BDTI's August 27th English "Director Boot Camp" was a great success, with active participation by a diverse group of Europeans, Americans, British, Japanese, and even a New Zealander! Everyone in the room benefited greatly from the perspectives and experience of this excellent group.
Excerpt:"Audit Committee under scrutiny
Toshiba was considered a reform pioneer, first appointing independent directors in 2001. But the company's five-person audit committee - of which two members were former Toshiba executives and two others lacked any business experience whatsover - was a classic study of Japan's corporate insider culture that can often create compliant committees under the thumb of management. ....."While the accounting errors probably would have been hard for any audit committee to spot if managers wanted to keep them hidden, this committee composition could not possibly have helped," say Nicholas Benes, Representative Director of the Board Director Training Institute of Japan.
Excerpt: “….. It will be interesting to see what lessons are drawn from Toshiba's failure. Problems with Toshiba's seemingly well-considered "hybrid" approach to governance clearly illustrate the tension and difficult tradeoffs between insider and outsider perspectives.
"In a new report published today, the leading business organisation hopes its report will kickstart the debate about how to define good governance – and recognise those companies that do it best.
The Great Governance Debate: Towards a good governance index for listed companies, launched at the IoD this morning, sets out a new framework for assessing corporate governance, moving away from a focus on compliance and towards a more complex measurement which combines public perceptions with a range of objective factors.
There are now 191 signatories to the Stewardship Code. The most recent signatories are highlighted on this list:
"September 2, 2014
[To institutional investors that have yet to accept the Code]
160 institutional investors have already announced their acceptance of Japan’s Stewardship Code (hereinafter referred to as the “Code”) by the end of August 2014.
The Financial Services Agency (FSA) would welcome the decision to accept the
Code by those who have yet to do so. The Code allows its signatories to take into account their specific conditions and situations, as far as it is in line with the “aim and spirit” of the Code.
The acceptance of the Code by asset owners is particularly important because they are expected to work as a “driver” for the implementation of the Code.
1.Purpose The Japan Revitalization Strategy as revised in 2015 (Cabinet Decision, June 30, 2015) states that “we need to work actively to prevail and to promote the adoption of Japan’s Stewardship Code, established and released in February 2014 (“JSC”), and Japan’s Corporate Governance Code, which entered into force in June 2015 (“JCGC”), as ‘the two wheels of a cart’ such that the sustainable growth of companies will be promoted by both sides of investors and companies.
Further improvements of corporate governance, e.g., making governance function not only formally, but also effectively, continue to be a major agenda, and we need to link such efforts to the establishment of a virtuous economic cycle.
In this respect, for the purpose of following up with the prevalence and adoption of JSC and JCGC as well as further improving corporate governance of all listed companies, we hereby announce the establishment of the “Council of Experts Concerning the Follow-up of Japan’s Stewardship Code and Japan’s Corporate Governance Code” (the “Council”).
2. Organization (1)The Council will be composed of outside experts; including members from corporate managers, local and foreign investors, and academics (the member list will be released later).
"On August 5, 2015, in a 3-2 vote, the U.S. Securities and Exchange Commission (SEC) adopted final rules implementing the controversial “CEO pay ratio” disclosure requirements that were proposed in 2013 and mandated by Congress pursuant to Section 953(b) of the Dodd-Frank Act. Despite much public debate and significant negative feedback on the proposed rules, the SEC adopted final requirements that are generally consistent with its initial proposal and largely without compromise on what were perceived as the most controversial issues.
"The value at risk to manageable assets from climate change calculated in this report is US$4.2trn, in present value terms. The tail risks are more extreme; 6°C of warming could lead to a present value loss worth US$13.8trn, using private-sector discount rates. From the public-sector perspective, 6°C of warming represents present value losses worth US$43trn—30% of the entire stock of the world’s manageable assets."
“Japan’s return on equity (ROE) revolution is now underway and is evolving into a revolution in corporate productivity and return on investment underpinned by Japan’s Corporate Governance Code, which established fundamental principles for governance at listed companies in Japan, and Japan’s Stewardship Code, which established principles for institutional investors.