METRICAL:How Far Has CG improved in 2021 (5) – Changes In % of Independent Directors

In my previous article, “How far has corporate governance progressed in 2021 (4),” I discussed the correlation analysis of each measure of corporate governance practices with the respective rates of change in ROA and ROE as of December 2020 and December 2021 for 1,704 companies in the Metrical Universe. The results showed that when corporate governance practices are divided into board practices and key actions, ROA and ROE both showed significant correlations with key actions, but no significant correlations with board practices. ROA and ROE are both significantly correlated with key actions, but not with board practices (see table below). From this, we can infer that in the 2021 analysis period, the increase in company profits and the confidence of good performance did not provide an incentive to improve board practices. We have told you that the company may have had some other motivation to improve board practices.

METRICAL:CG Stock Performance (Japan): May 2022

May stocks closed the month recovering the price declines of the first half of the month as the U.S. stock market rallied in favor of a slowdown in the rise of inflation numbers. CG Top 20 stocks underperformed against both TOPIX and JPX400 indices in the bear market.

In the first half of the month, the stock prices slumped as U.S. stocks weakened due to concerns about rising U.S. interest rates. At the end of the month, U.S. stocks rose sharply on expectations that U.S. inflation numbers would peak out, and edged higher recovering the declines of the early the month. Both Topix and JPX400 indexes rebounded 0.78% and 0.82%, respectively, during the month of May. Meanwhile, the CGTop20 stock index, the top CG Rating Score, underperformed against both indices, sliding -0.19%.