”It’s been 25 years since Professor Jeffrey Sonnenfeld’s landmark book The Hero’s Farewell vividly documented the challenges and failures of CEO succession planning at large publicly traded companies, and not much has changed beyond the exponential growth in what the top executives get paid.
Month: March 2016
”Japan’s “Show Me the Money” Corporate Governance – March 2016”
”Given the 4th quarter slowdown in the global economy, it is no surprise that overall corporate profit margins in Japan decelerated during that period. But before one panics and says that they are about to plummet, one should realize that it would likely require a global recession for such to occur and that the 2005-2007 period showed that profit margins can plateau at a high level for an extended period of time. Indeed, the four quarter average is still creeping upward to new record levels, and like most of the rest of the world, the manufacturing sector is declining while the non-manufacturing sector is accelerating to record highs. Meanwhile, Japanese profits are performing much better than those in the US or Europe. We have covered the reasons for such in our recent piece The Japanese Equity Outlook After the Nasty New Year Start (https://en.nikkoam.com/articles/2016/01/the-japanese-equity-outlook-after-the-nasty-new-year-start), but let us emphasize herein the corporate governance aspect of that piece……….”
Read full article here: https://en.nikkoam.com/articles/2016/03/japan-s-show-me-the-money-corporate-governance-march-2016
Source: Nikko AM
Martin Lipton: ”Succeeding in the New Paradigm for Corporate Governance”
Recognizing that the incentive for long-term investment is broken, leading institutional investors are developing a paradigm that prioritizes sustainable value over short-termism, integrates long-term corporate strategy with substantive corporate governance and requires transparency as to director involvement. We believe that the new paradigm can reduce or even eliminate the outsourcing of corporate governance and portfolio […]
”Hoaxwagen – How the massive diesel fraud incinerated VW’s reputation—and will hobble the company for years to come”.
”In late 2008 a publication called Green Car Journal compared the five finalists of its annual Green Car of the Year award. “Fulfilling this growing desire for vehicles with better fuel economy and overall environmental performance is no easy thing,” it noted. “Rising to the top is the 2009 Volkswagen Jetta TDI.” The car was the winner because its “groundbreaking clean diesel” engine managed to meet America’s “stringent tailpipe emissions standards” while also delivering “admirable fuel efficiency,” “satisfying performance,” and “a very reasonable” price.
That award was recently rescinded.
”Morningstar Introduces Industry’s First Sustainability Rating for 20,000 Funds Globally, Giving Investors New Way to Evaluate Investments Based on Environmental, Social, and Governance (ESG) Factors”
”CHICAGO, March 1, 2016—To help investors evaluate funds based on environmental, social, and governance (ESG) factors, Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today introduced the Morningstar Sustainability RatingTM for funds. The new rating will enable investors around the world to evaluate mutual funds and exchange-traded funds based on how well the companies held in their funds are managing their ESG risks and opportunities.
Yumiko Miwa et al ”Professional Asset Managers and the Evolution of Corporate Governance in France and Japan: Lessons from a Questionnaire Survey”
”Abstract – A corporate governance system consists of a set of mechanisms which restrict managerial discretion. The constraints on managerial discretion in the Anglo-Saxon environment, considered as a benchmark, are usually described as being primarily driven by shareholder interests, whereas the French and Japanese systems are traditionally thought of as more stakeholder oriented. However, the increasing share of international ownership has had a significant impact on corporate governance in both countries over the last two decade
”Is Japan ready for social innovation?”
”TOKYO —In recent years, “social entrepreneurship,” “social innovation” and “sustainability” have found their way into the mainstream conference last September at Waseda University under the theme “Entrepreneurship and Sustainable Innovation.”
”Korea’s Lessons for Japan”
”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.
” FSA – Stewardship Code : 205 institutional investors have signed up to the Principles for Responsible Institutional Investors”
”The Council of Experts Concerning the Japanese Version of the Stewardship Code (Chairman: Professor Hiroyuki Kansaku, The University of Tokyo) published the Principles for Institutional Investors (Japan’s Stewardship Code) in February 27, 2014. The Council requested the FSA to publish and periodically update the list of institutional investors who announced their acceptance of the Code.
FSA ”The Policy Approaches to Strengthen Cyber Security in the Financial Sector (Summary)”
”The Financial Services Agency (FSA) has been conducting the supervision and inspection regarding cyber security management as a part of system risk control, etc. The threat of cyber attacks is a significant risk for the stability of the financial system. It is necessary to enhance the resilience of the financial system by strengthening the cyber security of not only each financial institution but the financial industry as a whole………..”