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On October 27th, BDTI held its English Director Boot Camp , attended by a number of experienced participants. Participants from various companies heard lectures about corporate governance and related topics by Nicholas Benes and Andrew Silberman of AMT, and exchanged experiences and opinions at a spacious, comfortable room kindly donated for our use by Cosmo Public Relations, a leading communications and PR firm in Tokyo.
We are planning to hold the next course on December 15th. Sign up early!
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.
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.
”As many institutional investors have concluded, prevailing governance policies and practices have not produced desired board refreshment, which these investors would support in order to strengthen expertise, promote diversity and provide fresh perspectives in the board room. At the same time, companies and investors alike appreciate that term and age limits, as they have been typically applied, may not be the solutions, because they force the arbitrary retirement of valuable directors.
“…..Guiding Principles
Some of the key themes in the Japanese and UK Codes are similar, for example the responsibillities and the independence of the Board, the internal risk and control framework, and engagement with stakeholders. However, implementing corporate governance in a practical and invulnerable way is often much more challenging than outlining the guiding principles.
Lessons from UK Experience
The UK experience could provide valuable lessons in the following areas:
On the link below, you can download S&P's report comparing global financial literacy in various countries. (See definition below.) S&P asked four simple questions about things like how interest works and ranked countries based on the percent of correct responses. At 41%, Japan has a relatively low score among developed nations, which ranks it just above Italy in most respects.
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Corporate Governance Code Compliance So Far: A Survey of Director Training Policies
The status of director training as required pursuant to Principle 4-14 of the Corporate Governance Code,based on comply/explain disclosures
BDTI's August 27thEnglish Director Boot Camp was a great success, with active participation by a diverse group of Europeans, Americans, British, Japanese, and even a New Zealander! Everyone in the room benefited greatly from the perspectives and experienceof this excellent group.