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Foreword:
As the frequency and severity of cyber attacks against global businesses continue to escalate, both companies and their investors are coming to terms with a grim reality: Data breaches, or cyber incidents, are no longer a matter of if but when. Having put to rest rose-colored notions of eliminating this threat, investors are looking to boards for leadership in addressing the risks and mitigating the damage associated with cyber incidents.
”Not so long ago, back when they were eating the lunch of American corporations, Japan’s Toyotas, Hitachis, Sonys, Canons and Hondas were governed in the worst possible way — at least according to the canons of American governance. Their boards were made up almost exclusively of corporate insiders, with no independent directors and no diversity. […]
“…. Still, the longer the BOJ’s buying persists, the bigger the risk that market prices will detach from fundamentals. Assuming Goldman Sachs’s prediction for more stimulus proves correct, the central bank could end up owning a quarter of Mitsumi Electric Co., a supplier to Apple Inc., and 21 percent of Fast Retailing by the end of 2017, estimates compiled by Bloomberg show.
”The latest shocking example of just how intertwined central banks have become in not only Treasury and corporate bond markets and their respective “valuations”, but also in stocks, comes courtesy of the Bank of Japan which days ahead of an announcement which may see it double its ETF purchases from the current JPY3.3 trillion to JPY7 trillion or more (if Goldman is correct) has just been revealed to be a top 10 holder in about 90% of all Japanese stocks!
Source: Factset, IBES, GS GIR. Data are consensus for calendar years January 1, 2013 to March 22, 2016. Past performance does not guarantee future results, which may vary.
Goldman Sachs Asset Management (GSAM), one of the world’s leading investment managers discusses its constructive view on Japanese equities with Mr. Ichiro Kosuge, the Fundamental Equity Portfolio Manager. Mr. Kosuge highlights the importance of corporate sector reforms to the market’s outlook.
”What is your overall view on Japanese equities?
Ichiro Kosuge: We are constructive on Japanese equities. In addition to the potential for macroeconomic improvement, we believe corporate governance reforms, high cash holdings and attractive valuations could drive equities higher.
The Yomiuri Shimbun:
”Mitsubishi Motors Corp. was found to have manipulated data to overstate the fuel economy of minicar models.
Fuel efficiency is an important element for consumers to consider when they buy cars. Falsification of such data is an extremely malicious act.
MMC overstated the fuel economy by 5 percent to 10 percent by intentionally underestimating figures concerning tire resistance and other resistance while the vehicles are in motion.
”April 21, 2016 – 48 Members of the International Forum of Independent Audit Regulators (IFIAR) were hosted by the Financial Reporting Council (FRC) in London, United Kingdom, at their annual meeting to advance their common interest in promoting high quality audits globally.
Bloomberg’s Rishaad Salamat speaks to Mr. Zuhair Khan, Head of Japan Research at Jefferies. He discusses Japan’s corporate governance, shares his thoughts on whether it is improving and the impact of Mitsubishi’s manipulation on fuel economy data.
Brunswick Review is a Journal of Communication and Corporate Relations that features insights from global business leaders, policy makers, political critical and journalists as well as Brunswick consultants.
In this edition, the Journal features diverse topics on Directors and Boardroom issues. Among them is an Interview with Mr. Osamu Nagayama titled ‘The View from Outside’ on page 16. Mr. Nagayama is the Chairman and CEO of Chugai Pharmaceutical. He is also a member of the Enlarged Corporate Executive Committee of Rochel besides being a member of board of directors at Sony.
According to Transparency International as reflected in this article, most Corruption Perception Index (CPI) scores for Asia-Pacific did not change much compared to the previous rankings of 2014 despite the general improvement elsewhere. Countries that showed improvement include Mongolia, India, Myanmar, Thailand, Timor-Lestor, China, Indonesia and South Korea.
Japan dropped 3 places from 15th in 2014 to 18th in 2015. With the introduction of the Corporate Governance Code and introduction of Independent Directors on Boards in Japan, it is expected that the scores will improve with time. Others that notably dropped include The Phillipines, Malaysia together with New Zealand and Australia which declined by two places though still at the top end.