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Preparing well for recording board meetings is not only a wise practice; it can serve as the foundation for accurate, concise minutes. Spending time before the meeting to get ready for note taking will help avoid confusion during board discussions, reduce errors in the recording process and increase overall efficiency. Follow these steps to take clear, forward-moving minutes.
As the person who initially proposed the Corporate Governance Code to the LDP in 2013 and 2014, I am well aware of its limitations in various areas. For this reason, I am very pleased that Fair M&A Study Group have decided that its discussions should cover not only MBOs, but also ”cases which are likewise significantly affected by the issues of conflict of interest and information asymmetry”[1], including “cases of acquisition of a controlled company by its controlling shareholder.”[2]
This indeed an important mission, because these topics include virtually all types of M&A transactions and the public statements of executives and boards with regard to them. For many years in the post-war era, the failure of the government and the JPX/TSE to set forth clear bright-line rules that facilitate a fair, robust M&A market in Japan has stunted productivity, dynamism and growth in the Japanese economy.
Our joint research – “Linkage Between Corporate Governance and Value Creation” – between BDTI and METRICAL has been updated as of January 31. The most important inferences are summarized below.
(1) Correlations: Board Practices
and Performance
Significant correlation between board practices and performance continues.
(a) ROE: Nominations Committee existence, the number of female directors and percentage of INEDs show a significant positive correlation.
(b) Tobins Q: Nominations Committee, retired top management “advisors” (ex-CEO “advisors”), and percentage of INEDs show
(c) ROA (actual): Compensation Committee existence (negative correlation), Incentive Compensation Plan disclosure, and retired top management (ex-CEO) serving as advisors show significant correlation.
今から40年前、50年前に松下幸之助が語ったコーポレートガバナンスとスチュワードシップの考えが、今注目されています。昨年月刊誌『Voice』で松下幸之助の「株式の大衆化で新たな繁栄を」と題する文章が紹介されました。 同氏の『実践経営哲学』からの引用と併せて紹介します。
曰く、株式会社は、社長や重役のものではなく、 株主のものであると同時に、社会の「公器」でもある。 決算期ごとに株主総会で業績を報告し、業績が良いモノは 株主から称賛とねぎらいの言葉を頂戴する。 充分な成果が上がらなかった時には、 謹んでお叱りを被る。これが、本来の姿であり、 株主は経営者の御主人である事を決して忘れてはならない。 株主は短期的な売買姿勢をとらず、むしろ「主人公」として毅然とした態度を保つ事が大事である。 単に株式を保有して配当を受け取るだけでなく、株主としての権威、見識をもって 経営者を叱咤激励する事も望ましい。（BDTIによる要約。以下は各出典本文から引用。）
NOTE: This public comment supersedes and replaces the one that I, Nicholas Benes, submitted on January 12, 2019)
As the person who initially proposed the Corporate Governance Code to the LDP in 2013 and 2014, and suggested a number of principles in it, I am well aware of its limitations in various areas and the fact that Japan has not yet attained the quality level for an equity market that is expected by global investors. In this sense I am very pleased that the JPX has decided to review its equity market structure and related standards.
Challenges and Realities
This indeed an important mission, for which is it essential to recognize and discuss the impact of a number of challenges that Japan faces in improving governance, efficiency, and trustworthiness of its equity capital markets. These challenges include:
Average CG rating score for the 1,800 Japanese companies slid 3.6pt to 50.01 for December 2018 from 53.61 for the previous month.
Mr. Ghosn’s criminal cases are ongoing. But the criminal cases alone will not put a close to this entire ordeal. It is a matter of time for Nissan to face civil cases filed by investors. Due to Mr. Ghosn’s understated compensation, it is anticipated that a considerable amount of assets will flow out of Nissan. The largest part of this outflow will be accounted for the damages claimed by and awarded to investors in civil lawsuits. What amount of assets will flow out of Nissan? This memo is an attempt to estimate the probable size of these damages.
In early December, the Asian Corporate Governance Association (ACGA) released the ninth edition of the highly anticipated CG Watch 2018 report, published in collaboration with CLSA. Titled “Hard Decisions: Asia faces tough choices in CG reform”, this biennial regional survey of corporate governance compares and ranks 12 markets in Asia Pacific. Unfortunately, Japan was downgraded from the third position to the seventh position in the report. In this seminar, Jamie Allen, ACGA’s Secretary General will explain the ranking process. He will also talk about how Japan’s fall in ranking in the survey does not mean Japan is “going backwards” on corporate governance. On the contrary, the report recognizes the progress that’s being made in many areas. However, Jamie will clarify how Japan’s regulatory reform needs to focus more on “hard law” (e.g., takeover rules, third-party allotments, collective engagement rules) and not just principles-based “soft law” (CG Code, Stewardship Code). Jamie will carve out a roadmap for the future to bring about cultural or behavioural change on the part of companies, investors and other stakeholders, and will focus on timely issues as the protection of minority shareholders.
Recent advances in technology have sparked a seismic shift in how companies operate and communicate. At the boardroom level, paper systems are drifting out and being replaced with upgraded tools and processes that streamline board activities.
You may be struggling to pinpoint the true benefits a board portal may bring to your organization, or you may have some assumptions about the technology that is inhibiting you from looking into a solution further.
This checklist spotlights some of the most common myths about digitizing the boardroom, and will illustrate the ways board portal technology can streamline information sharing and accelerate collaboration.
Abstract: “This study examines whether the sustained lower profitability and market valuation of Japanese firms compared to global peer firms can be explained by the structure of insider dominate board of directors and the employment system which hinders flexible employment adjustments by using cross-country data. Firstly we show that level of outside director ratio and flexibility of employment adjustment both differ consistently across 27 countries in the analyzed period. We show that these two factors significantly explain observed variation of financial performance across countries significantly. In addition, we show that not only do these two factors have significant explanation power over the relatively poor performance of Japanese firms, but also over the better financial performance and growth rate of US firms. ”
Authors: ARIKAWA Yasuhiro (Waseda University) / INOUE Kotaro (Tokyo Institute of Technology) / SAITO Takuji (Keio University)
Download the paper: “Corporate Governance, Employment, and Financial Performance of Japanese firms: A cross-country analysis”
Related page on RIETI web site: https://www.rieti.go.jp/en/publications/summary/18120006.html