”CalSTRS, GPIF coming together to tackle corporate governance issues”

This informal coalition that seems to be coming into being between the GPIF, CalSTRS, and CalPERS would be a big step ahead in terms of discussions to increase the effectiveness of engagement by not only these organizations, but also their fund managers and other market players.  Kudos to all three institutions, and also Mr. Mizuno, for moving in this direction.

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.

WSJ (Benes) – ”Japan’s Pension Funds Could Help Curb Cash Hoarding”

”Almost three years after I first proposed in these pages that Japan adopt a governance code to raise productivity, the country now not only has a Corporate Governance Code but also a Stewardship Code for institutional investors. There has since been much discussion, and even exhortation by the government, about the urgent need to change the corporate mindset, engage with investors and increase companies’ return on equity. These are all major achievements. But when it comes to increasing corporate profitability through reinvesting in the real economy, there is still much progress to be made.

Japanese companies continue to sit on a mountain of excess cash. According to Japan’s Ministry of Finance, this mountain actually grew to $1.5 trillion in 2015 from $1.4 trillion in 2011, despite substantial increases in dividends and stock buybacks. During that same period, capital expenditure shrank by more than half……….”

Council : ”Prioritize reinforcing governance of public pension fund management”

”To manage a massive amount of funds safely and efficiently, it is vital to build an effective organization and system suited to carrying out the task.

A council of the Health, Labor and Welfare Ministry has proposed that the current ban on direct stock investment by the Government Pension Investment Fund (GPIF) remain in place, at least for the time being.