”How are Japanese companies becoming better stewards of capital? Improving corporate governance”

Japanese corporate profits are way up, even if real GDP is not.

”If you were to use just one measure, such as real GDP, to assess how Prime Minister Shinzo Abe was performing, you would conclude his policies are clearly not working: real GDP itself is flat to slightly negative since he took office.

On the other hand, if you look at the aggregate operating profit of Tokyo Stock Exchange Price index constituents as a reflection of corporate profits, it has grown more than 60% since he took office.

Perhaps around a third of that comes from currency weakness, but even without that factor, corporate profit growth in Japan has been quite robust since Abe came to power. As equity investors, we are investing in a share of corporate profits, not in the government or in units of GDP…….”

Read full article here.

Source: Investment Week – Asia

About BDTI

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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