GPIF: ”Summary Report of Listed Companies’ Survey about Institutional Investors’ Stewardship Activities”

” Ⅰ. Purpose of the Survey

The Government Pension Investment Fund, Japan (GPIF) conducted our first survey to JPX Nikkei Index 400 companies to evaluate stewardship activities of our external asset managers and to grasp real situation of constructive dialogues. As we stated in “Summary Report of GPIF’s Stewardship Activities in 2015” dated of 29th January 2016, it is our intention to raise the standard of dialogues between institutional investors and Japanese companies.

Ⅱ. Results of the Survey 260 companies out of 400 of the Index responded during 6th and 22nd of January 2016.

i) Opinions and Requests to Stewardship Activities of Institutional Investors from Companies

a. Approximately 60% of Companies of the Index which responded to our survey have recognized and appreciated the change of institutional investors regarding investors’ questions about business strategy and ESG (Environmental, Social and Corporate Governance) issues after the introduction of “Japan’s Stewardship Code”.

b. On the other hand, there are many companies which pointed out undesirable changes where investors increased formal questions and enforcement of meetings with top management to make their performance records.

c. Also, companies complain of one-way propositions of investors without correct understanding of circumstances surrounding companies.

d. Many companies suggest increased questions about capital policy and capital efficiency as both of desirable and undesirable changes of investors.

e. Companies expect suggestions based on investors’ own experiences and insights.

f. Constructive dialogues and long-term investments are expected by companies due to concerns about short-termism of institutional investors.

ii) Evaluation by Companies about Stewardship Activities of GPIF’s External Asset Managers. There are many responses that companies appreciated insightful and useful dialogues with External Asset Managers of active investment.

iii) Opinions and Requests from Companies toward Asset Owners including GPIF

a. Through Stewardship activities, it would be necessary for asset owners to motivate their asset managers to improve ground for securing and development of talented personnel so that external asset managers may execute constructive dialogues for mid-long term corporate value and sustainable growth.

b. Companies expect direct dialogues with asset owners because they understand sharing thoughts through direct communication with not only asset managers but with asset owners is important…..”

Download full report here.

Source: Government Pension Investment Fund

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