Below are key takeaways from ISS’ recently released 2023 Proxy Season Preview – Japan. The full report is available to institutional subscribers by logging into ProxyExchange then selecting the Governance Exchange and its Report Center tab and to corporate subscribers by logging into Governance Analytics then selecting the Governance Exchange and the Report Center tab.
- Peak meeting date: This year’s peak Japan meeting day is expected to be June 29, when about a quarter of June annual meetings are likely to be held on a single day, followed by June 28, June 27, and June 23.
- Board Independence: A continued uptick in board independence and female board representation is observed. As of March 2023, 30 percent of companies ISS covered had at least half independent outside directors, and 68 percent of companies had at least one female director.
- Equity Compensation Plans: More equity compensation plans are expected to be seen on ballots this year. An increasing number of Japanese companies are now proposing performance-based and equity-based compensation to better align the interests of directors with those of shareholders, a trend partially stimulated by Japan’s Corporate Governance Code.
- Climate shareholder proposals: A number of climate-related shareholder proposals have been submitted. The proposals are intended to seek better disclosure of information concerning climate risk management.
- ISS Japan Policy Changes: Two policy changes were implemented for meetings after February 2023. In the first, if the board does not include at least one female director following the AGM, ISS will recommend a vote against the company’s top executive. This policy is applied to all Japanese companies. The second policy update relates to climate board accountability, which applies to 10 Japanese companies on the Climate Action 100+ Focus Group list. The policy application is part of ISS’ global approach.
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By: Japan Research Team