127 Institutions Sign Up to Japan’s Stewardship Code, Including Three of BDTI’s “Special Sponsors”

123 institutional investors, fund managers, and insurance companies, and four service providershave signed up to comply with Japan's Stewardship Code in what will probably turn out to just the first round of compliance statements. Of these, (only) threeinstitutions are special sponsor (significant donors) to BDTI. The list of signatories, and the code itself, can be downloaded at this link:


Manyof these institutions are still trying to figure outexactly what they should be doing to be better stewards and meaningfully engage with Japanese companies so as to communicate their needs and opinions. At such a time, we would respectfully submitthat donating to BDTI is one of the most efficientand practical steps they couldtake, as part of their stewardship activities. Interms of bang for the buck, it is hard to beat.

For these institutions, showing they care about director training by donating enough to appear on BDTI'sweb siteis inexpensive, clearly communicates to many companies (and beneficiaries!)at the same timeabout their priorities and the importance of governance and director training(since many folkslook at our web site), and willinform the upcoming process of drafting Japan'sfirst Corporate GovernanceCode. It will helpensure that rules requiring director training, or disclosure about each company's policy about it, are included in the new Code, as is the case in most other major stock markets. Moreover,when investors or their fund managers do “engagement”, they can referto their support of BDTI to show that they really mean what they say. Actions speak louder than words, especially in Japan. Aside from which, obviouslyinstitutions cannotmeet with every single company in their portfolios, and even if they do, directorship and governance training could well go unmentioned as a key topic. But that doesn't mean it doesn't matter.

Quite the contrary. Speaking from seven years of experience sitting on Japanese boards, directorship and governance training is one of the most important (and easiest) things to implementin a country that values education in general,butwhere the vast majority of directors will still be “inside” manager/executivesfor some time to come. The latter situation willnot change in the near and medium-term future.Moreover, by itself, neither a stewardship code nor a corporate governance codecan inject directors with the right knowledge and sense of dedication. Rules alone cannotput the spirit in the Buddha.

This is why specialized training organizations that are boots on the groundproviding core knowledge,third-party perspectives, experience-sharing, best practices, andcase studies – and inject a sense of director professionalism and dedication that cannot be infused by the companies themselves or investors in meetings – are absolutely essential in Japan.If investors wish independent outside directors to play a larger, more effective role in Japan, then the mind-sets, knowledge, dedication, andcommon goals and skill sets (finance, risk management, M&A, governance practice) of the other 85%of the board (the inside directors) matterevery bit as much as they dofor the outside directors.

If all the institutions on this list are serious about their fiduciary obligations to be good stewards, we at BDTI look forward to meeting with more than 100 institutions in the next few months! We would thinkthat a lot of signatories shouldwant to to talk about these topics and help out with BDTI's mission, – so as to efficiently and better serve their own beneficiaries.

The Board Director Training Institute (BDTI) is a "public interest" nonprofit in Japan dedicated to training about directorship, corporate governance, and related management techniques. It is certified by the Japanese government to conduct these activities as a regulated nonprofit. Read a summary about BDTI here, and see a menu of its services for both corporations and investors here.

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