”There’s one thing Japanese Prime Minister Shinzo Abe could learn from a Korean woman: respect — for minority shareholders, that is. President Park Geun Hye’s push for better corporate governance at the nation’s largest conglomerates is bearing fruit, and exciting some of the world’s biggest investors.
Last week, Samsung Electronics, by far the biggest member of the country’s $1 trillion Kospi stock index, adopted a proposal to allow non-CEOs to take up the chairman’s role for the first time, while Hyundai Motor pledged to strengthen transparency. The moves drew praise from Mark Mobius, the executive chairman of Templeton Emerging Markets Group at Franklin Resources. Across the strait, only 1 percent of Japan’s Topix 500 companies have “good” board structures, Jefferies analyst Zuhair Khan said in a note Tuesday.
Among Khan’s conclusions: fewer than 5 percent of Japanese companies have a majority of outside directors, and only 2 percent have outside chairmen, or nomination, audit and compensation committees that are headed by an outsider. There are also more academics and retired bureaucrats on boards in Japan than there are finance professionals, accountants or strategy consultants combined. “Despite a history of accounting scandals, still only 10 percent of companies have an outside director with an accounting background and barely 25 percent of boards have a director with a legal background,” he wrote……………”
Read full article here: http://www.bloomberg.com/gadfly/articles/2016-03-16/korea-s-lesson-for-japan
Source: Bloomberg News