”Japan, the question of value creation has become increasingly important as corporate governance evolves and Japanese industry restructures in the era of Abenomics, Prime Minister Shinzo Abe’s plan to jolt the world’s third-largest economy.
Category: Investment
ACGA’s Feedback to FSA on Japan’s Governance Code: Training by Specialist Providers Important
”………Experience shows that the implementation and evolution of “comply and explain” can take a long time to develop, but there are opportunities to accelerate this transition. The Follow-up Council may wish to consider how to guide and assist Japanese listed companies and domestic institutional investors to understand and implement good disclosure. For example, the Council could advise the FSA to do the following:
Bloomberg : ”Japan Inc. Fights Back on Governance Overhaul as Waste of Time”
”Many Japanese companies aren’t happy about the biggest overhaul of corporate governance in decades — and they’ve been letting the world’s biggest pension fund know.
GPIF: ”Summary Report of Listed Companies’ Survey about Institutional Investors’ Stewardship Activities”
Ⅰ. Purpose of the Survey
The Government Pension Investment Fund, Japan (GPIF) conducted our first survey to JPX Nikkei Index 400 companies to evaluate stewardship activities of our external asset managers and to grasp real situation of constructive dialogues. As we stated in “Summary Report of GPIF’s Stewardship Activities in 2015” dated of 29th January 2016, it is our intention to raise the standard of dialogues between institutional investors and Japanese companies.
Terry Lloyd: ”Sharp: How Not to Sell a Company in Japan”.
E-biz news in Japan
”Late last week, Mr. Terry Gou, the CEO of Foxconn Technology Group (also known as Honhai) signed a JPY389bn deal to take control of Sharp, one of Japan’s bedrock electronics firms. The signing came after a protracted cat-and-mouse game played between Mr. Gou, the management of Sharp, and in the wings, the public-private INCJ fund. Mr. Gou showed consummate deal sense in luring Sharp’s board with a much more attractive offer than the government’s INCJ (which wanted to break up the firm) then drag out the negotiations as Sharp was facing a possible collapse. Lastly, with impeccable timing he sprang a last minute demand to reduce the deal price by 20% and completely out-maneuvered, Sharp’s executives and shareholders, who eventually caved in and agreed.
”Foxconn agrees to buy Japan’s Sharp Corp. for $3.5 billion”
Acquisition comes after weeks of uncertainty over deal at higher price
”TAIPEI, taiwan — The Taiwanese company that assembles Apple’s iPhones agreed Wednesday to buy control of financially struggling Sharp Corp. for $3.5 billion in the first foreign takeover of a major Japanese electronics producer.
THE ISSUE – ”Corporate Governance an important issue”
Should more attention be paid to corporate governance issues? ”Over the past few years, institutional investors have held boards increasingly accountable for company performance and have demanded greater transparency and engagement with directors. Investors’ interest in more disclosure and interaction arises from their desire for improved performance, both on the part of boards and in […]
” Executive Stock Ownership Guidelines”
”Public companies are beholden to align long-term interests of executive officers with those of their shareholders, and this balance often manifests in how executives are paid in relation to company performance. Many companies address this through use of equity packages, but because executives can still sell or hedge these shares, their incentives to make long-term decisions for the company are not always clear. To avoid this, many companies implement stock ownership guidelines, requiring executives to own a certain amount of equity in the company.
”Carlyle Steps Up Japan Deal Pace as Governance Reform Kicks In”
Tamotsu Adachi, managing director of Japan at Carlyle Group. Photographer: Kiyoshi Ota/Bloomberg
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Buyout fund seeks to complete three to four deals this year
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Half of Carlyle’s $1 billion Japan fund is already invested
”Carlyle Group LP, which has made two acquisitions in Japan so far in 2016, said it plans to add another one or two deals there this year as companies get serious about boosting their profits.
Yumiko Miwa et al ”Professional Asset Managers and the Evolution of Corporate Governance in France and Japan: Lessons from a Questionnaire Survey”
”Abstract – A corporate governance system consists of a set of mechanisms which restrict managerial discretion. The constraints on managerial discretion in the Anglo-Saxon environment, considered as a benchmark, are usually described as being primarily driven by shareholder interests, whereas the French and Japanese systems are traditionally thought of as more stakeholder oriented. However, the increasing share of international ownership has had a significant impact on corporate governance in both countries over the last two decade