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Of the CG practice, Takeover defense is one of the criteria that companies have improved since the Corporate Governance Code in June 2015. The following table shows that comparison of about the data of 1,800 Japanese companies between March 2018 and February 2020.
Topics
(Positive
correlation with actual ROE)
Stock prices climbed in the 1H of the month on risk-on rally buoyed by hitting historical high of US market, but concern about negative impact on global economy led by coronavirus infection put downward pressure on the stocks toward the month end. TOPIX and JPX400 market indices lost -0.11% and -0.09% respectively for the month. CG Top 20 stocks soft -0.07% but outperformed against the both indices for the same period.
We more often see the company’s posting about share repurchase lately. However, fewer companies retired the treasury shares in the past. How much companies cancel the shares? The following table shows that comparison of about the data of 1,800 Japanese companies between March 2018 and January 2020.
by Sachiko Ichikawa
Comment by Nicholas Benes
Carlos Ghosn held a press conference on January 8, 2020 to present his “not guilty arguments” regarding the alleged crime of making, or not preventing, misrepresentations in Nissan’s Security Reports. He had already disclosed the testimony he made at the Japanese court which was considering his bail in 2019. So this was the second time that he has defended himself in public.
Mr. Ghosn spent more than one hour for his presentation, and even showed many slides and materials, but his logic for insisting on his innocence was not easy to understand. To me, his 2019 testimony in court was better than his 2020 televised presentation. In an attempt to connect the dots, this article will explain my own interpretation of what Mr. Ghosn really wanted to say.
Conclusion paragraph: “We believe that Toshiba Machine’s implementation of its New Buyout Defense Mechanism that does not take into account (but rather opposes) shareholder opinions hinders the development of corporate governance in Japan, which has been built on the efforts of various parties including governmental agencies and self-regulation organizations such as the Ministry of Economy, […]
On December 11, 2019, I gave a lecture on BDTI’s analysis about corporate governance practices and and firm performance in Japan. Since then we have added indicators of statistical significance to our materials. To view the entire presentation as translated into English, click here: Presentation to Securities Analyst Association 2019.12.11. Those who read Japanese can read the full speech here, and can download the Japanese version of the presentation materials.
Our methodology is shown on page 23 . Our analysis suggests that the adoption of the following practices leads is followed by (appears to cause) improvements in ROA compared to the average for a firm’s industry over the next two years. Please see the charts on the left side of each page:
Various other factors that appear to correlate with superior performance, are shown on page 22, and page 34. We will explore the direction of causation with some of these later.
“Today, after more than a year of increasing pressure from climate activists, investors, legislators, and thought leaders, BlackRock CEO Larry Fink, in his highly-anticipated annual letter to CEOs and to clients, announced a sweeping new set of policies which aim to put climate change and sustainability at the center of BlackRock’s business model. BlackRock is the world’s largest asset manager with almost $7 trillion in assets under management as of Q3 2019. …..The announcement is a major shift for BlackRock, which previously had failed to take meaningful action on climate, and is a very important step in the right direction as the world faces increasing risk from climate change. Massive capital shifts away from fossil fuels and deforestation-risk commodities are necessary to mitigate the worst of the climate crisis and set the world on a path toward sustainability.
Stock prices edged slightly higher amid low trading volume from the previous month. TOPIX and JPX400 market indices gained 0.06% and 0.06% respectively for the month. CG Top 20 stocks kept solid up by 0.02% for the same period.
Public companies in Japan employ three types of legal governance structures for their boards. The three types of organizational structure are the Company with Corporate Auditors, the Company with an Audit Committee and the Company with Nomination Committee, etc. However, as shown in the pie chart below, very few companies use the Nomination Committee format. The number of companies shown below is based on Metrical’s research universe of 1,754 companies but the number of Companies with Nomination Committee, etc. would not be much different even if more smaller companies were included.
