April 10, 2022

In 2010, at a study session of the Financial Services Agency, it was proposed that (1) those engaged in “investment advisory services” should be explicitly required to exercise the duty of care, and (2) institutional investors should publicly disclose their voting results for each resolution deliberated at shareholder meetings of investee companies.

Although premature at the time, the concept of “stewardship”—closely aligned with the duty of care—later arrived in Japan and became the origin of the Corporate Governance Code.

In 2014, as the Stewardship Code (SC) was being finalized, I sounded the alarm in a speech to the LDP’s Headquarters for Economic Revitalization: “Due to the lack of disclosure rules facilitating comparisons of corporate governance practices, valuable systems like stewardship risk becoming ineffective and amounting to nothing more than pie in the sky.” I advocated for the Corporate Governance Code (CGC). Following the logic outlined in a memo I submitted to lawmakers in 2013, the idea that the two codes function as “two wheels of a cart” was accepted at that time.

Ultimately, both the SC and CGC were established. While the SC lacks legal enforceability, Guideline 5-3 states that “as part of their accountability, institutional investors should disclose their voting results for each individual investee company and each proposal.” Not all SC signatory asset managers disclose this information, but many major firms do.

This was a major breakthrough, but “the devil is in the details.”

Since it’s a voluntary SC, some investors choose not to disclose their information. Even when disclosed, the data remains unstandardized and lacks a unified (machine-readable) format. While this data is highly valuable for asset owners, beneficiaries, corporations, and individuals, compiling and analyzing it requires manually collecting PDF files from each asset manager’s website and entering the vast amount of information into a database.

The Financial Services Agency, as a leading entity within the SC, can play a crucial role here. By requesting SC signatories to submit this information in a standardized XBRL format and publishing it on platforms like EDINET, it can further contribute to ensuring both wheels of the vehicle turn.

逆にそのようにしなければ、ISSBによるESG情報開示の標準化が進んでも、アセットマネジャーはその情報を受けてどのように動いているかが分析しにくいままになる。社会のためにアセットマネジャーがエンゲージメントおよび議決権行使の質で競争してほしいのだが、十分にそうなっていないという問題が残る。

Nicholas Benes