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Thanks to the sponsorship of Advisory Research (Drew Edwards) and Econvue (Lyric Hale), Nicholas Benes of BDTI gave a seminar/course on the topic of “The Vital Role of Director Training in Japan’s Corporate Governance Reforms”, in Chicago on September 26, 2016.
Despite the fact that many still doubt how successful the Abenomics corporate governance reforms in Japan that led to the introduction of the Stewardship and Corporate Governance Code and the amendment of the Companies Act, Arthur Mitchell, a senior counselor with White & Case in Tokyo strongly believes otherwise. He writes an insightful article explaining that while the effectiveness of the reforms will largely depend on the way they are implemented, the reforms will certainly enable market participants to change their corporate performance and overall corporate culture. (Note: Arthur Mitchell has taken BDTI’s director training course in Japanese, and currently sits on the board of Mitsui Sumitomo Financial Group.)
Read full article here.
Executive Summary To me – the guy who proposed the code – the most important logic of Japan’s corporate governance code is: Japan needs committees even more than other countries, because there are so few outside directors to set the base for “committees”, Japanese companies must first appoint “multiple” independent directors Japan needs any and […]
Increasing the number of outside directors, and fully using what they can contribute, is one of the areas emphasized by Corporate Governance Code introduced in Japan more than a year ago. Below is an insightful discussion between two outside Directors , Mr. Yoshiaki Ozawa and Mr. Noboru Kashiwagi at Daifuku, who share their views.
Read the discussion here.
Despite the fact that many folks are still pessimistic as to whether corporate governance reforms will bring a surmountable positive change to the Japanese economy, there has been some notable changes as the writer of this article, Louise Dudley, Hermes Global Equities Portfolio Manager, below puts it. It will take time and patience but will be worth it in the end.
Japan has made significant steps forward in promulgating a stewardship code and a corporate governance code. Change and differentiation between companies (leaders vs. laggards) will accelerate from this point on; it is already accelerating. But how much impact will be made by the new “comply or explain”-based, potentially vastly-expanded disclosure regime, and menu of best practices that are being encouraged, will largely depend on how much investing institutions are willing to do the hard work of analyzing and comparing all this new information, assessing its true substance vs. the lack thereof, and proactively communicating with portfolio companies the kind of concrete practices and robust disclosure they would like to see next.
This Insight will be a series focusing on various issues that need to be understood and discussed deeply going forward, and will affect this process and the future evolution of governance in Japan.
In the article below, Mr. Mayajima Hideaki, a faculty fellow at the Research Institute of Economy, Trade and Industry ( REITI) reviews the characteristics of ownership structures in Japanese companies and examine what conditions are necessary to ensure the effective operation of the corporate governance code that has been in place for a year now.
He explains how institutional investors will increasingly play a key role in dissolving cross-sharing arrangements and increasing shareholder influence.
Below is an interview on the recent state of Corporate governance in Japan that was held early this month. The interview is between Mr. Miyajima Hideaki (Faculty Fellow, RIETI / Waseda University), interviewer and Mr. Colin Mayer (Said Business School, Oxford University), interviewee.
Mr. Mayer shares his opinions on the unique features of corporate governance in Japan, how to encourage companies to take risks, ownership structures, the role of outside directors, the comply and explain principle and the role of corporate governance in promoting strong economic performance.
”Japanese companies appear to be steadily implementing the corporate governance code introduced by the Tokyo Stock Exchange a year ago, at least in form. Of the 2,018 firms listed on the first and second sections of the TSE, 78 percent say they are now in compliance with at least 90 percent of the principles set […]
Japanese corporate profits are way up, even if real GDP is not.
”If you were to use just one measure, such as real GDP, to assess how Prime Minister Shinzo Abe was performing, you would conclude his policies are clearly not working: real GDP itself is flat to slightly negative since he took office.
On the other hand, if you look at the aggregate operating profit of Tokyo Stock Exchange Price index constituents as a reflection of corporate profits, it has grown more than 60% since he took office.