ISS-Corporate Forecasts Shareholder Proposals, Capital Efficiency as Themes of 2024 Japan Meeting Season

TOKYO, Japan (May 28, 2024) – ISS-Corporate, a leading provider of compensation, governance, cyber risk monitoring, and sustainability offerings to help companies improve shareholder value and reduce risk, today released an analysis of anticipated trends and developments for the 2024 Japanese proxy season. The report examines trends in the evolving corporate governance landscape, influenced by shareholder activism and initiatives by regulators and the Tokyo Stock Exchange to attract global investment.

Key findings and predictions include:

• Reflecting a maturing corporate governance environment, the volume of shareholder proposals is expected to increase over previous years. In 2023, a record 109 companies received shareholder proposals. Influenced by the success of high-profile activist campaigns in recent years, the report expects an increasing number of investors to challenge companies that have weak governance profiles or poor financial performance, particularly regarding capital allocation. Shareholder proposals targeting dividend policies and share repurchases to enhance capital efficiency increased exponentially over the past ten years, from just six in 2013 to 87 in 2023. Shareholders are also increasingly demanding greater transparency and accountability over pay, the report finds, with proposals focused on compensation-related topics growing to 60 in 2023 from just 17 in 2013.
• Environmental proposals are becoming more sophisticated, targeting companies and financial institutions with significant carbon footprints within their value chains. Such proposals are increasingly addressing the alignment of business strategies with the Paris Agreement’s objectives, calling for action ranging from enhanced transparency in lobbying activities, the development of clear transition plans, reports on the resilience of assets in the face of climate change, and the integration of environmental targets into executive compensation structures.
• Domestic asset managers are moving towards quantitative voting policies that prioritize capital efficiency, the report finds. The Tokyo Stock Exchange is also advocating improved disclosure of capital cost management, having published in January 2024 a list of companies that disclosed their management of capital costs.  
• Companies falling short in strategic alignment and transparency, particularly in corporate finance and decarbonization initiatives, may encounter increased investor scrutiny. Investors are increasingly demanding comprehensive disclosure and commitment to long-term value creation.

“The corporate governance landscape in Japan has matured considerably over the years, and the call for greater capital efficiency is becoming ever louder,“ said Jun Frank, Managing Director at ISS-Corporate. “Those who fall behind could face not only greater investor scrutiny over their capital allocation and sustainability strategies but also motions to challenge the board over these issues this proxy season.”

Read ISS-Corporate’s full analysis here.

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About ISS-Corporate
ISS Corporate Solutions, Inc. (“ISS-Corporate”) is a leading provider of cutting-edge SaaS and high-touch advisory services to companies, globally. Companies turn to ISS-Corporate for expertise in designing and managing governance, compensation, sustainability, and cyber risk programs that align with company goals, reduce risk, and manage the needs of a diverse shareholder base by delivering data, tools, and advisory services. ISS-Corporate’s global client base extends across North America, Europe, and Asia, as well as other established and emerging markets worldwide.

About ISS STOXX
ISS STOXX GmbH, through its group companies, is a leading provider of comprehensive and data-centric research and technology solutions that help capital market participants identify investment opportunities, detect qualitative and quantitative portfolio company risks, and meet evolving regulatory requirements. With roots dating back to 1985, we today deliver world-class benchmark and custom indices across asset classes and geographies and serve as a premier source of independent corporate governance, sustainability, cyber risk, and fund intelligence research, data, and related offerings. Our products and services give clients the scale and leverage they need to grow their business more effectively and efficiently. ISS STOXX, which is majority owned by Deutsche Börse Group, is comprised of more than 3,400 professionals operating across 33 global locations in 19 countries. Its approximately 6,400 clients include many of the world’s leading institutional investors who turn to ISS STOXX for its objective and varied offerings, as well as companies focused on ESG, cyber, and governance risk mitigation as a shareholder value enhancing measure. Clients rely on ISS STOXX’s expertise to help them make informed decisions to benefit their stakeholders.

Media Contact:
Audrey Dedrick
Associate, Communications
media@iss-corporate.com