BDTI Year-End Donation Campaign and Update

We would greatly appreciate it if you could possibly donate to BDTI, and even if not, forward this link to any and all.  Thank you for your support !
Friends, Supporters, and Compatriots Overseas , — As the end of the year approaches, we at The Board Director Training Institute of Japan want to recognize all of the people who have helped us fulfill our dream of adequately training directors in Japan. Our small organization and its passionate team have endured for 13 years, and have managed to have an outsized impact. For a full list of our recent activities, I hope you’ll read the update below of our recent activities and milestones, to see just how much of an impact your contributions can have, and for many of you, did have.
Every donation provides much-needed fuel for our many courses, seminars, webinars, and outreach activities in support of better corporate governance in Japan, where the market-clearing price for director training is still very low.  As you consider your tax position at the end of 2022, we humbly ask if you would be willing to contribute whatever you can to help us continue this amazing journey and the successes we’ve had.

Crafting the ‘G’ in ESG: Accountability in the Boardroom

By the Nasdaq Center for Board Excellence ‘ESG & Sustainability’ Insights Council: Helle Bank Jorgensen, CEO, Competent Boards; Amma Anaman, Associate General Counsel and Legal Relationship Manager, U.S. Listings, Nasdaq; Chantal Wessels, CFO, Corporate Platforms, Nasdaq. First published by Nasdaq – reposted by Harvard Law School Forum on Corporate Governance

As investment in environment, social and governance (ESG) gains momentum, investors and stakeholders increasingly expect swift and concrete sustainability initiatives from companies across the globe. But boards have lagged behind the ESG fervor. While 40% of directors were found to be ESG conscious with some level of knowledge in the space, only 8% of board directors were found to be competent and capable of effective, embodied action, according to a 2021 study of the top 100 public corporations internationally.

We recently considered the evolving perspectives in ESG, as well as tools and strategies for boards to meet the ESG expectations of their stakeholders.

CG Top 20 Stock Performance (October 2022)

The stock market closed higher in October, driven by rising U.S. equity prices, which rose on expectations of a slowdown in U.S. policy rate hikes.

The performance of the TOPIX and JPX400 indexes in October was up 5.11% and 5.22%, respectively. Over the long term since 2014, the CG Top 20 continues to outperform both indices by about 2% per year. Note that the CG Top20 has been reassessing its component stocks since July 1. The new individual stocks are listed in the table below.

METRICAL: What Initiatives are Companies with High Valuations Taking?

In my previous article, Transitional companies in the prime market: to increase valuations,” I examined companies that increased their market capitalization over the December 2020-February 2022 period and found that the increase was due to higher valuations. I then examined the initiatives of the companies whose Tobin’s q increased during the period in question. I found that changes in Tobin’s q were closely related to increases in foreign ownership, and that firms with large increases in Tobin’s q showed declines in cash equivalents and total assets, suggesting that firms moved to use their assets more effectively. Related to the effective use of assets, these companies have clearly articulated the balance between investment in growth and shareholder returns in their capital allocation policies and have made efforts to communicate with shareholders and investors. With regard to board practices, the companies that significantly increased their Tobin’s q made notable improvements in ensuring the independence of their independent director ratios and compensation committees, as required by prime market listing standards. It was also inferred that the inclusion of companies that eliminated takeover defenses also contributed to boosting Tobin’s q. In light of these results, I’m now interested in what tends to happen to companies with high valuations in the first place, and would like to examine what efforts have been made to address this issue.

The table below shows the correlation analysis between the change in Metrical Tobin’s q and the change in Profile and Key Performance Indicators. Over the period, changes in Tobin’s q are significantly positively correlated with changes in market capitalization and foreign ownership. This confirms that changes in Tobin’s q (valuation) are closely related to changes in market capitalization and foreign ownership. The change in Tobin’s q also shows a significant negative correlation with the change in cash equivalents and the change in total assets. I find that firms that increased Tobin’s q tended to decrease cash equivalents and total assets during the period in question.