Below is an excerpt from ISS-Corporate’s recently released paper “Japan Shareholder Proposal Landscape 2024: Shareholder Proposals to Focus on Capital Efficiency Long Term Value Creation”. The full paper is available for download from the ISS-Corporate online library.
KEY TAKEAWAYS:
- Shareholder proposals are expected to increase, particularly those concerning shareholder returns and executive compensation.
- Environmental proposals are becoming more sophisticated, addressing target compliance with the Paris Agreement, and corporate lobbying.
- Domestic asset managers are moving towards quantitative voting policies that prioritize capital efficiency. The Tokyo Stock Exchange is also advocating improved disclosure of capital cost management.
- 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.
Introduction:
Japan’s corporate governance is evolving, influenced by increasing shareholder activism and initiatives by regulators and the Tokyo Stock Exchange (TSE) to attract global investment. The upcoming proxy season is expected to see a rise in shareholder proposals, with a focus on board independence, capital allocation and environmental issues.
This report looks at the trends in Japanese corporate governance, where there is a growing emphasis on shareholder proposals and capital efficiency. We examine what this means for the upcoming proxy season and the challenges faced by Japanese companies in meeting investor expectations, offering insights into the ongoing transformation and its implications for issuers.
READ THE FULL PAPER:
By:
Ingo Tietboehl, Senior ESG Advisor, APAC, ISS-Corporate
Jun Frank, Global Head of Compensation & Governance Advisory, ISS-Corporate
