Discussion Forum

Metrical:”How Fast has Japan’s Corporate Governance Improved? “

2019-12-06 posted by

Some research organizations reported that Japanese companies have enhanced the corporate governance and others say the improvement wasn’t higher than expectations. Then, how fast has the corporate governance in Japan made progress for a few years? There would be different perspectives on which criteria each person focus. We would like to show one of the easiest ways that we can see the progress. It is the % of Independent Outside Directors (INEDs) of the board of directors (BOD) that shows very well how fast corporate governance in Japan has improved.
Please see the following 2 charts. The first pie chart shows the number of companies of >50% INEDs and =<50% INEDs in the BOD, respectively as of November 2019. The total number of companies was the companies METRICAL INC. covers as the core research universe (most of companies are listed TSE-1st Section and/or JPY10 billion market cap). A number of companies are included in the =<50% INEDs if other small companies than METRICAL's universe are included. In case, the % of the >50% INEDs in the pie chart will decrease significantly.

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Metrical:”Ex-CEO advisors”

2019-12-06 posted by

This month METRICAL shows how the disclosure about ex-CEO advisors has progressed from a year ago. As shown the table below, in October 2018, 829 companies on METRICAL’s research universe disclosed the number of ex-CEOs (ex- Representative Directors) who retained positions as “advisor” in the company after stepping down as CEO. Of these companies that voluntarily disclosed, 474 companies had ex-CEO advisors. A year later in October 2019, a total of 894 companies disclosed the number of ex-CEOs who retained such advisory positions seat in the company after stepping down from the top management position. Of these 894 companies, 503 companies had ex-CEO advisors in October 2019.

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“Japan’s Unfinished Corporate Governance Reforms”, by Nicholas Benes

2019-12-04 posted by

My article on Japan’s unfinished reforms is online now. Lest the Abe administration and regulators “declare victory” when they are only half done, I describe seven specific measures that Japan needs to adopt in order to bring its market up to a global standard for a developed nation:

  1. Detailed rules for an independent committee
  2. A clear requirement for a majority of independent directors on the board
  3. Codifying the role and responsibilities of executive officers
  4. Consolidation of overlapping disclosure reports
  5. Protection of minority shareholder rights
  6. Enhancing transparency to reduce entrenchment and enhance inclusiveness
  7. Strengthening stewardship throughout the investment chain

I stress the reality that in all of these, strong political leadership from the Prime Minister and other senior parliamentarians will be needed. “Thus, is it essential that the Tokyo Stock Exchange (JPX/TSE) and the various regulatory agencies keep up reform momentum. However, one senses a desire from these groups to ‘declare victory’, and they have a tendency to not fully coordinate with each other. If Prime Minister Abe’s cabinet did more to make the key players coordinate their efforts in key areas, meaningful governance change (and protection of investors) would accelerate….

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Investing.com:“Japan is the Place to Invest” By Cumberland Advisors

2019-11-14 posted by

“ ….The OECD notes that, despite the current slowdown, the expansion of the Japanese economy that began in late 2012 is the longest in Japan’s postwar history and is projected to continue through 2020. The Bank of Japan’s forecast is similar, with a pick-up in growth expected in Japan’s fiscal year 2021. Continued supportive monetary policy with very low interest rates and large-scale government bond purchases, together with increased public investment and spending to offset the effects of the sales-tax increase, are expected to maintain the expansion. The new U.S.-Japan trade deal and the anticipated elimination of the threat of U.S. automobile tariffs are positive developments. If the current optimism about progress in trade talks between the U.S. and China proves to be justified, Japan’s economy would benefit significantly from the positive effects on the Asia region….“

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