Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

Independent Leading Corporate Governance Research

Metrical Inc

METRICAL INC. is an independent leading Corporate Governance research firm in Japan where Corporate Governance is increasingly recognized as an important element on corporate management in these days. Thus, CG research and solutions would become an essential component of global capital markets and play important to contribute to transparency of the markets and maximize shareholders’ value in Japan. 

METRICAL INC. provides Corporate Governance research and analysis including rating services, and  also offers investment research and IR services with solutions and customized profound research on CG and IR issues.

<ul>
<li>Online AGMs using Internet account for 18%. More than 90% of these meetings are limited to broadcasting the meeting, without allowing shareholders to exercise their voting rights during the meeting.</li>
<li>Technical issues are cited as the reason why online shareholder meetings are not increasing, and the Ministry of Justice's advisory board is discussing legal reforms.</li>
<li>For companies whose goal is to pass company proposals at AGMs and end quickly, even if the resolution of issues is included in legal revision, it will have little effect.</li>
</ul>


Online AGMs using Internet account for 18%. More than 90% of these meetings are limited to broadcasting the meeting, without allowing shareholders to exercise their voting rights during the meeting.
Technical issues are cited as the reason why online shareholder meetings are not increasing, and the Ministry of Justice's advisory board is discussing legal reforms.
For companies whose goal is to pass company proposals at AGMs and end quickly, even if the resolution of issues is included in legal revision, it will have little effect.


Companies Seem Reluctant to Hold Online AGMs with Online Attendance

<ul>
<li>Japan's overall gender gap index for 2025 remained unchanged from 2024 (118th place), with only slight improvements. The tendency toward significant gender disparities in politics and economics remains unchanged.</li>
<li>Gender wage gaps are caused by the low percentage of women in managerial positions, and the reason for this is that women bear the brunt of childcare and housework.</li>
<li>Political leadership is necessary to reform traditional gender inequality values and implement measures that allow women to continue working after giving birth and raising children.</li>
</ul>


Japan's overall gender gap index for 2025 remained unchanged from 2024 (118th place), with only slight improvements. The tendency toward significant gender disparities in politics and economics remains unchanged.
Gender wage gaps are caused by the low percentage of women in managerial positions, and the reason for this is that women bear the brunt of childcare and housework.
Political leadership is necessary to reform traditional gender inequality values and implement measures that allow women to continue working after giving birth and raising children.


Gender Inequality in Politics Is Preventing Implementation of Measures to Achieve Gender Equality

<ul>
<li>From the perspective of securing human resources, global companies have increased ％ of performance-based compensation and stock-based compensation, but there is still large gap between them and many other companies.</li>
<li>Most Prime Market-listed companies have established remuneration committees, but do not disclose individual executive compensation, raising doubts about the transparency of the remuneration decision-making process.</li>
<li>As an element of performance-based compensation, many companies still place far greater emphasis on profits than on capital profitability, which leads to a difference in perspective with investors.</li>
</ul>


From the perspective of securing human resources, global companies have increased ％ of performance-based compensation and stock-based compensation, but there is still large gap between them and many other companies.
Most Prime Market-listed companies have established remuneration committees, but do not disclose individual executive compensation, raising doubts about the transparency of the remuneration decision-making process.
As an element of performance-based compensation, many companies still place far greater emphasis on profits than on capital profitability, which leads to a difference in perspective with investors.


There Is Also a Difference in Perspective Between Investors and Companies on the Remuneration System

<ul>
<li>Some companies adopt policy of not granting performance-based compensation to outside directors to ensure independence. Given this, outside directors may have little incentive to leverage skills and knowledge in value-creation.</li>
<li>Most independent board members also serve as board members of other companies, but very few companies have set clear standards for the number of concurrent positions that may be held.</li>
<li>Although few companies disclose the criteria for the tenure of independent directors, the longest term was 12 years. ISS has set this as the standard in its voting guidelines.</li>
</ul>


Some companies adopt policy of not granting performance-based compensation to outside directors to ensure independence. Given this, outside directors may have little incentive to leverage skills and knowledge in value-creation.
Most independent board members also serve as board members of other companies, but very few companies have set clear standards for the number of concurrent positions that may be held.
Although few companies disclose the criteria for the tenure of independent directors, the longest term was 12 years. ISS has set this as the standard in its voting guidelines.


Does Introducing Incentive into Remuneration of Independent Directors Compromise Their Independence?

<ul>
<li>The trend of AGMs being concentrated in the last week of June remains unchanged, and this's seen as attempt to divert shareholder attention and reluctant attitude toward dialogue with shareholders.</li>
<li>The rise in share proposals has made some managers wary, and we are not optimistic about pushing AGM later dates and disclosing annual securities reports well in advance of AGM.</li>
<li>There are gap between what is stated and what actually happens in "the reasons for not introducing anti-takeover measures," "compliance with constructive dialogue with shareholders," and disclosure of "TSE's requests."</li>
</ul>


The trend of AGMs being concentrated in the last week of June remains unchanged, and this's seen as attempt to divert shareholder attention and reluctant attitude toward dialogue with shareholders.
The rise in share proposals has made some managers wary, and we are not optimistic about pushing AGM later dates and disclosing annual securities reports well in advance of AGM.
There are gap between what is stated and what actually happens in "the reasons for not introducing anti-takeover measures," "compliance with constructive dialogue with shareholders," and disclosure of "TSE's requests."


The Gap with Investors' Perspective Stems from Managers Trying to Distance Themselves from Investors

Japan

The TOPIX, also known as the Tokyo Stock Price Index, is a capitalization-weighted index of all companies listed on the First Section of the Tokyo Stock Exchange. The index is supplemented by the subindices of the 33 industry sectors. The index calculation excludes temporary issues and preferred stocks, and has a base value of 100 as of January 4, 1968.

TSE Tokyo Price Index TOPIX (TPX INDEX)

Companies Seem Reluctant to Hold Online AGMs with Online Attendance

I would like to discuss the issues on the Nikkei article dated June 13 titled “Virtual Shareholders' Meetings Remain at 2%, While Online Voting...

Metrical Inc

Gender Inequality in Politics Is Preventing Implementation of Measures to Achieve Gender Equality

I would like to discuss the issues on the article “Gender Equality: Japan Ranks 118th, Women's Political Participation Declines.”

Metrical Inc

There Is Also a Difference in Perspective Between Investors and Companies on the Remuneration System

I would like to discuss the June 11 Nikkei article, titled “Executive compensation at Japanese companies exceeds 110 million yen, up 5% from the...

Metrical Inc

Does Introducing Incentive into Remuneration of Independent Directors Compromise Their Independence?

I would like to discuss the issues on the Nikkei article dated June 10, titled “Just for show Outside Directors No Longer Acceptable; Investors...

Metrical Inc

The Gap with Investors' Perspective Stems from Managers Trying to Distance Themselves from Investors

I would like to discuss the June 9th Nikkei newspaper article, "The peak of June shareholder meetings will be on June 27th. Improving capital...

Metrical Inc