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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 […]
”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.
”Japan’s National Tax Agency (NTA) has announced a new tax treatment of premiums for directors’ and officers’ liability insurance.
Tamotsu Adachi, managing director of Japan at Carlyle Group. Photographer: Kiyoshi Ota/Bloomberg
”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.
This paper reviews the concept, theory, and international evidence on gender diversity and its relation to financial performance.
”A set of new rules unveiled by the Tokyo Stock Exchange requires all companies listed on its First and Second sections to have at least two independent outside directors on their board. The move is in line with the Abe administration’s push to beef up corporate governance as a way of attracting more foreign investors. […]
”It’s been 25 years since Professor Jeffrey Sonnenfeld’s landmark book The Hero’s Farewell vividly documented the challenges and failures of CEO succession planning at large publicly traded companies, and not much has changed beyond the exponential growth in what the top executives get paid.
”Given the 4th quarter slowdown in the global economy, it is no surprise that overall corporate profit margins in Japan decelerated during that period. But before one panics and says that they are about to plummet, one should realize that it would likely require a global recession for such to occur and that the 2005-2007 period showed that profit margins can plateau at a high level for an extended period of time. Indeed, the four quarter average is still creeping upward to new record levels, and like most of the rest of the world, the manufacturing sector is declining while the non-manufacturing sector is accelerating to record highs. Meanwhile, Japanese profits are performing much better than those in the US or Europe. We have covered the reasons for such in our recent piece The Japanese Equity Outlook After the Nasty New Year Start (https://en.nikkoam.com/articles/2016/01/the-japanese-equity-outlook-after-the-nasty-new-year-start), but let us emphasize herein the corporate governance aspect of that piece……….”
Read full article here: https://en.nikkoam.com/articles/2016/03/japan-s-show-me-the-money-corporate-governance-march-2016
Source: Nikko AM
Recognizing that the incentive for long-term investment is broken, leading institutional investors are developing a paradigm that prioritizes sustainable value over short-termism, integrates long-term corporate strategy with substantive corporate governance and requires transparency as to director involvement. We believe that the new paradigm can reduce or even eliminate the outsourcing of corporate governance and portfolio […]