How to Revive Japan’s Economy
The Board Director Training Institute of Japan (BDTI) is the most influential provider of director training and data on corporate governance in Japan. I am pleased to share this report on the growth of our activities during FY2021 (please click). Notably, more than 32% of our participants in non-corporate programs were women.
While our training activity has increased, we are still dependent on donations from foreign investors for our survival so that we may continue to make an outsized impact in improving corporate governance in Japan. For the past few years, I have reduced my own salary to a minimal level to make this possible. (In fact, over the past 12 years, after subtracting my own donations to BDTI, I have literally worked for zero compensation.)
BDTI is regulated by the Japanese government. I intentionally created BDTI in 2009 as a non-profit and later obtained special government certification that its director training activities serve the “public interest”, to create the most eminently “supportable” platform for spreading governance best practices and the custom of director training in Japan. Especially after I proposed the Corporate Governance Code to the government in 2013 (which requires director training), I believed that this format would make it easy for Japanese institutional investors to support our activities, in view of their responsibilities under the Stewardship Code and their proclaimed dedication to ESG and sustainability. After all, the quality of “G” (the board) is the pillar that ensures whether “E” and “S” will create value for shareholders, stakeholders, and society over the long term, rather than simply as reactive PR.
However, during the past 12 years, not a single large Japanese investing institution has supported BDTI or cooperated with our activities in any way, despite many meetings. Instead, 99% of BDTI’s donations have come from foreign asset managers and institutions, including some of the most respected investing organizations in the world.
BDTI FY2021 Update to Supporters
Activities and Milestones
Training Activities
- BDTI trained 342 persons in director training programs, broken down as follows:
▸ 122 in our three programs to which anyone can apply (13 programs)
◦ 32 in our new “advanced” course, focusing on the role of outside directors
◦ 16 in a joint course that included a section on diversity management
▸ 169 were trained in programs that were customized for specific corporations
◦ 64 of these were in programs where executives at subsidiaries received training
▸ 32% of the participants in our non-corporate director training programs were women, more than four times the average % of female directors on Japanese boards. This figure will likely increase in FY2022 because of a generous sponsored program to fund “training scholarships” for women - 608 persons attended our seven BDTI webinars, in which leading experts focused on these topics:
▸ “Understanding D&O insurance”
▸ “Engagement by investors – recent techniques”
▸ “Collective engagement in Japan: issues and obstacles”
▸ “ESG management” and “ESG disclosure”
▸ “Effective dialogue with investors, and the use of analyses and letters”
▸“The market for corporate control, and takeover defenses”
▸ “Factors affecting the selection of the legal form of governance” (from among the three types) - Upcoming webinars include an update on the ISSB’s direction, and global HR management.
- At least 3,000 persons either received (or had access to) BDTI’s four e-Learning modules, including two megabanks and multiple corporate groups using our “unrestricted use” package
“Missionary Work” – Updating Institutional Investors
- I gave 14 speeches to different groups, comprising both Japanese and foreign institutional investors groups, adding up to a total “audience” of approximately 1,620 persons
Consulting and Data Activities – Now Starting to Contribute to BDTI’ s Long-term Sustainability
- BDTI conducted consulting assignments for, or sold data to, 29 counterparties
- Sold GoToData Dashboard service (demo it here: https://gotodata.jp/demo/home.php )
- Sold direct access to BDTI’s detailed database with unique data and text to major institutions
BDTI Partner Fusion Systems: SDGs Through Mobility and Cycling
BDTI’s partner Fusion Systems: “As part of their collection of SDG initiatives, Fusion sponsors a cycle road race team called ‘Palatium Tokyo Fusion Systems’….Fusion believes mobility is an essential element of development strategies that aim to achieve SDGs. Meeting the needs of people who cycle continues to be a critical part of the mobility solution […]
Introducing the enjoi Wolfpack, a DEI Leadership Program for Corporate Men
Are you a forward-looking man in corporate Japan with an interest in learning how to shift your organization towards healthier, more equitable, and more innovative dynamics?
Building diversity-positive workplaces is no longer a “nice to have.” It is now an IMPERATIVE just for baseline business continuity. Diverse talent mobilization strategy can no longer be delegated to the HR function where it is often under-resourced and disconnected from holistic innovation and business strategy.
Research by the Economist Intelligence Unit shows that just 38% of Japanese companies report that C-level executives have responsibility for the formulation of talent-management strategy, compared to 65% in the global results. If CEOs in Japan want to stem financial losses from talent attrition, building a gender-equal and diversity-positive workplace is the foundation.
That’s why we have developed the enjoi Wolfpack program.
This new, one-of-a-kind, six-month executive education program from enjoi Japan K.K. runs biweekly as virtual meetings on Monday evenings, 8:00-9:30 pm JST beginning February 28, 2022. There are three different packages available at three price levels: Wolfpack Explorer, Wolfpack Leader, and Wolfpack Mastermind.
There is only a limited number of spots still available in this confidential DEI leadership program! Applications close as soon as seats sell out. Final application deadline is February 15, 2022.
Visit www.en-joi.com/wolfpack to request pricing details and apply now!
We also welcome inquiries at wolfpack@en-joi.com.
“How We Saved Our Planet”, by Nicholas Benes
In this article and video published in Ethical Boardroom, I urge a much deeper discourse about #ESG and the structure of profit-seeking corporations – one that considers ways to install the right incentive drivers. As summarized in the video, in my article aliens from another planet (the Vilcans) visit Earth and advise us to think much harder about key questions that we are not fully grappling with – such as: 1) who is best able to assess ESG factors that affect sustainability? 2) does our system provide enough incentives for them to think 20 years ahead, but act now? Does it do that throughout the entire investment chain? 3) why does ownership need to be non-transparent much of the time? Is that healthy? 5) what are the implications of giving FULL limited liability to corporations? 6) does it make sense that those who bought no stock, bear a large part of externalized risk? etc. etc.
The article then describes exactly how the Vilcans reconfigured their equity markets to address these and a host of other issues that (in my view) current #ESG initiatives and debates are not effectively coping with.
11/18 “Director Boot Camp” Held by Zoom! Next Courses: 2022.2.7!
On July 13th, still in the midst of the pandemic, BDTI held its English Director Boot Camp via teleconference. The day-long intensive course was attended by 6 highly-experienced and highly interactive participants. The participants heard lectures about corporate governance by Nicholas Benes along with a guest lecture by Andrew Silberman of AMT, and exchanged experiences and opinions. Even during a pandemic, training continued smoothly, with all participants chiming in with insightful comments and questions.
We are planning to hold the next course on February 7(Mon)2022. Sign up early! Please see a description of our director training course here or click the button below for further information.
Eiichi Shibusawa: The Spirit of Japanese Ethical Capitalism & Sustainability
Ken Shibusawa and Christina Ahmadjian, and Joshua W Walker Thank you –that was an excellent, concise explanation/introduction about ” Eiichi Shibusawa: The Spirit of Japanese Ethical Capitalism & Sustainability”. Well done! To others: worth watching. I am always impressed by how deeply persons like Shibusawa thought about issues related to capitalism and its related social issues that need to be addressed, even at very early stages in its birth. When I have taught business ethics, I really appreciate reading the thoughts of Shibusawa, Adam Smith, Andrew Carnegie, and others. (webinar by the @JapanSociety_SF @japansociety )
Posted by Nicholas Benes
7/13 “Director Boot Camp” Held by Zoom! Next Courses: 2021.09.07 & 11.18!
We are planning to hold the next course on September 7th(Tue) & November 18th (Thur) 2021. Sign up early! Please see a description of our director training course here or click the button below for further information.
BDTI Welcomes Eiji Hirano, Former Chair of the GPIF’s Board of Governors, as a New Director to its Board
The Board Director Training Institute of Japan (BDTI) is pleased to welcome Eiji Hirano to its board of directors, effective as of July 1st, 2021.
Until April of this year, Mr. Hirano served as the first Chairperson of the Board of Governors of the Government Pension Investment Fund of Japan (GPIF), which is the world’s largest national pension fund with approximately USD1.62 Trln (178 Trln Yen) under management. During his time as Chair, Mr. Hirano stressed the importance of corporate governance as one of the essential pillars of ESG at both portfolio companies and the GPIF itself. He led the GPIF’s board in overseeing management of its massive portfolio during a time of accelerating change, a global pandemic, and growing world-wide recognition of the need for greater corporate sustainability.
Mr. Hirano’s career has spanned economics, international financial markets, investment, public policy and corporate governance, and he has a Master’s degree in Economics from Harvard University. In addition to his recent experience at the GPIF, Mr. Hirano brings to BDTI a wealth of perspectives gained from his distinguished career at the Bank of Japan, where he stepped down as an Assistant Governor at 2006, and other positions in the private sector. Currently, he serves as the non-executive Vice-Chair of MetLife Japan, and as an outside director at NTT Data and Riken. He is also an auditor at the Keizai Doyukai and a member of Japan UNESCO‘s domestic committee.
Commenting on Mr. Hirano’ appointment, BDTI Representative Director Nicholas Benes said, “we are honored and excited that Mr. Hirano has joined our mission to improve the effectiveness of boards by providing practical, high-standard directorship training programs.” Echoing his sentiment, fellow Representative Director Kenichi Osugi (Professor of Law at Chuo University) said, “Mr. Hirano’s broad range of experience will help us better prepare board members for what faces them in the future.”
Mr. Hirano said, “the success of sustainable investment depends largely on the quality of boards and corporate governance, and the best way to meaningfully improve those things is through new knowledge, sharing of “best practices”, and discussion, — all the things the director training entails. Therefore, director and governance training are essential for society. We need to tirelessly convey this reality to those asset managers that are adopting ESG and impact investing techniques, but may be uncertain as to how they can make a more direct contribution to overall sustainability. I am hoping to encourage more domestic institutions to support BDTI’s activities.”
METRICAL:CG Stock Performance (Japan): May 2021
May stock market continued directionless trading after an upturn at the beginning of the month. CG Top 20 stocks outperformed against both the Topix and JPX400 indices.
Stock prices opened higher at the beginning of the month on the back of lower US interest rates led by lower-than-expected US employment data, but subsequently kept directionless trading. Topix and JPX400 indices gained 1.42% and 1.78%, respectively, during the month of May. The CG Top 20 stocks outperformed for the second consecutive month with a 2.17% gain.
