Last Friday (May 14th) the Japanese Cabinet approved its much-awaited Growth Strategy, which included mention of corporate governance as part of the strategy (see the proposals below), but did not include the proposals the LDP made in its May 10th Interim Report to require public companies to disclose their policies with respect to training for all new and continuing directors.
(Speeding up the restructuring of industries and accelerating venture businesses)
Bold moves should be taken to discard old facilities, equipment, and assets so that outdated facilities and equipment can be replaced with the state-of-the-art. R&D aimed at retaking the global lead should be accelerated. Funds, human resources, and capital should be actively mobilized in growth sectors. Daring business restructuring should be pushed
through by companies and industries to promote such turnover of equipment. As long as company managers start taking such actions, Japanese companies will be able to regain vitality, increase capital investments, and improve productivity, which in turn successively churn out attractive new products and services, succeed in global competition,
and tap into the world’s markets. To encourage such moves by company managers, the Government will boldly promote
capital investment and creation of new businesses at unprecedented speed. In addition, to ensure that shareholders and other stakeholders proactively support the forward-looking initiatives by company managers, corporate governance will be reviewed so that Japanese companies will excel in international competition.
3. Reviewing corporate governance and examining the use of public funds, etc.
(i) Amend the Companies Act and promote the installation of external directors who can supervise from an outsider’s perspective without being bound to company constraints or interests.
(Submit to Diet during next session)
(ii) Consider and compile principles (Japanese version of the Stewardship code) for institutional investors to fulfill their fiduciary responsibilities, such as promoting the mid to long-term growth of companies through dialogues.
(Compile by end of the year)
(iii) At meetings among intellectuals, review and obtain recommendations on cross-cutting issues pertaining to public and quasi-public funds, such as the management of funds (promotion of diversified investment), matters of governance including risk management structure, and measures for improving the returns on long-term investments in shares, bearing in mind the scale and nature of each fund.
Growth Strategy – Full English Summary – 6-2013
Growth Strategy -Bullet Points-6-2013
Growth Strategy – One page Summary- 6-2013