We are pleased to note that against the backdrop of the recent events at Nissan, the Institutional Corporate Governance Network (ICGN) has submitted a letter to Japan’s Council of Experts for the Follow-up of Japan’s Stewardship Code and Corporate Governance Code, stressing the importance of independent directors, independent board committees, director training, use of a “skills matrix”, capital allocation, disclosures, and a number of other issues that BDTI has been stressing for many years, – ever since its establishment in 2009, in fact. On the topic of director training, Kerrie Waring of the ICGN wrote:
” ICGN encourages the introduction of high quality training for independent directors in Japan to help build an understanding of what their role entails, particularly in relation to monitoring management and public disclosures. This would help ensure objective decision-making in response to business issues and in alignment with the company’s vision, mission and strategy. We also stress the importance of financial literacy to ensure that independent directors are able to challenge management on issues such as capital efficiency, the use of cross shareholdings and CEO remuneration.” (emphasis added)
We applaud this detailed submission to the Council of Experts. The ICGN letter can be downloaded here in its original form. We have also created a marked form that highlights the references to independent nomination and compensation committees, training, and the use of skills matrix. This may be useful in engagement focusing on these aspects.