Month: August 2024

What Needs to be Added to the “Action Program for Accelerating Corporate Governance Reform: From Form to Substance”

2024-08-23 posted by

Nicholas Benes
Representative Director, The Board Director Training Institute of Japan (BDTI)
(The following is my personal opinion and not that of any organization. This is a translation of the original article.)

As sent to prospective candidates to be the next Prime Minister, in no particular order:
Chief Cabinet Secretary Yoshimasa Hayashi, Minister for Foreign Affairs Yoko Kamikawa, Minister of Economy, Trade and Industry Ken Saito, Minister for Digital Transformation Taro Kono, Minister in Charge of Economic Security Sanae Takaichi, Secretary-General of the Liberal Democratic Party Toshimitsu Motegi, House of Representatives Member Shigeru Ishiba, House of Representatives Member Shinjiro Koizumi, House of Representatives Member Takayuki Kobayashi, House of Representatives Member Seiko Noda, House of Representatives Member Katsunobu Kato.

CC: Prime Minister Fumio Kishida, Deputy Chairman of the Liberal Democratic Party’s Political Research Committee Masahiko Shibayama, Parliamentary Vice-Minister of Health, Labor and Welfare of the Liberal Democratic Party Akihisa Shiozaki, Deputy Secretary-General of the Liberal Democratic Party Seiji Kihara, House of Representatives Member Kenji Nakanishi.

Japan’s Corporate Governance Code (CGC) and the investor Stewardship Code need to function as “two wheels” of a cart. I had advocated this since 2013, and when I had the opportunity to formally propose the establishment of the CGC to the Liberal Democratic Party in 2014[1], I insisted that the most important thing was to “promote the disclosure of information that enables one to verify governance structure and substance” at firms.

“Governance and oversight are more likely to function effectively on a board that has a majority of truly independent and qualified independent directors.” As of 2014, this dynamic had been recognized in many countries around the world. At the time, I thought that if companies disclosed their actual governance practices and stewardship by investors started functioning well, Japan, as a developed country, would naturally adopt a similar stance within the next five years or so.

Ten years later, however, there is still no serious discussion of these two issues in Japan. Now that global investors are paying more attention to the Japanese stock market, I believe it is time for us to confront these core issues and take the following steps to speed up Japan’s governance transformation.

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Oasis & BDTI’s “Director Training for Women Initiative 2024” Recruitment Results

2024-08-05 posted by

For the third consecutive year, Oasis Management Co. (“Oasis”), graciously sponsored scholarships in support of outstanding women who would go on to receive training from The Board Director Training Institute of Japan (“BDTI”). Between April 1, 2024 and June 30, 2024, Oasis covered the full cost of training for women with outstanding qualities who participated in one of BDTI’s director training courses.

With many applications from talented women, 91 women were selected to receive scholarships this year. More than half of the scholarship recipients took BDTI’s Governance “Juku”, BDTI’s core director training taught in Japanese, while the rest participated in either Advanced Outside Director Training, BDTI’s Director Boot Camp taught in English, BDTI’s Role Play course, or went through e-Learning (which consists of 4 digital courses in total).

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【METRICAL】Increasing Profitability to Gain Support from Overseas Investors Is a Condition for Higher Valuation

2024-08-02 posted by

In this article, I would like to try to summarize the recent analysis in this paper.

Metrical Analysis
We began analyzing corporate governance of Japanese companies in full swing in June 2015, covering 500 companies at that time. Since then, from February 2018 to the present, I have analyzed approximately 1,800 companies. These 1,800 companies are used as the universe and are updated monthly based on publicly available information such as annual securities reports, corporate governance reports, and financial statements. Metrical’s corporate governance analysis is divided into Board Practices and Key Actions. This is because even if the board structure and other board practices are formally in place, it is skeptical that they are being used to manage the company to create value. This is based on the hypothesis that, ideally, improvements in corporate governance will lead directly to value creation, or that improvements in board practices will create value through key actions such as cash allocation, share repurchases/reirements, etc. Therefore, I believe that key actions should be added to corporate governance evaluations.

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METRICAL: CG Stock Performance (Japan): July 2024

2024-08-01 posted by

In July, the stock market was highly volatile, rising sharply at the beginning of the month, then falling sharply toward the end of the month, before recovering at the end of the month. In July, the CG Top 20 significantly outperformed the TOPIX and JPX400 for the third consecutive month. The July stock market, which […]

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