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>The decision as to why a company should or should not repurchase its own shares now is also a management vision.</li>
<li>Management of companies with low stock valuations should seriously discuss why they are low and implement measures to address the problem.</li>
<li>The company should consider what combination of cash-allocations is reasonable and effective for its situation, and announce it to investors, including plan for what to do with the treasury stock.</li>
</ul>


The decision as to why a company should or should not repurchase its own shares now is also a management vision.
Management of companies with low stock valuations should seriously discuss why they are low and implement measures to address the problem.
The company should consider what combination of cash-allocations is reasonable and effective for its situation, and announce it to investors, including plan for what to do with the treasury stock.


Share Repurchases Should Be Tailored to the Individual Company's Effective Cash Allocation

<ul>
<li>Even couples who have decided to get married are squeezing wedding expenses, indicating that financial reasons are overshadowing the factors that keep young people from getting married.</li>
<li>Real wages have continued to decline over the past 25 years, and real income per household is known to be lower in 2018 than it was in 1980.</li>
<li>The deflationary cycle that has carried out by procuring cheap labor from overseas under the guise of technical intern trainees and women as non-regular workers doesn't seem to be sustainable.</li>
</ul>


Even couples who have decided to get married are squeezing wedding expenses, indicating that financial reasons are overshadowing the factors that keep young people from getting married.
Real wages have continued to decline over the past 25 years, and real income per household is known to be lower in 2018 than it was in 1980.
The deflationary cycle that has carried out by procuring cheap labor from overseas under the guise of technical intern trainees and women as non-regular workers doesn't seem to be sustainable.


Continuing Deflationary Cycle Will Not Raise Younger Generation's Desire to Marry and Have Children

<ul>
<li>The ongoing panel discussions also call for increasing TOPIX liquidity as a market need. However, TSE seems to think that it has completed the TOPIX reform for the time being.</li>
<li>TSE appears to be insisting that the criteria for TOPIX stock selection be consistent with the prime market listing criteria of 10 billion Yen in tradable market capitalization.</li>
<li>On the periodic replacement of TOPIX components, TSE isn't looking at the urgent need of improving liquidity as issue to be addressed after the completion of the staged-weighting-reduction (February 2025).</li>
</ul>


The ongoing panel discussions also call for increasing TOPIX liquidity as a market need. However, TSE seems to think that it has completed the TOPIX reform for the time being.
TSE appears to be insisting that the criteria for TOPIX stock selection be consistent with the prime market listing criteria of 10 billion Yen in tradable market capitalization.
On the periodic replacement of TOPIX components, TSE isn't looking at the urgent need of improving liquidity as issue to be addressed after the completion of the staged-weighting-reduction (February 2025).


Criteria for TOPIX Components and Prime Market Listing Criteria Should Be Discussed Separately

<ul>
<li>Only 12.1% of prime market listed companies have a majority of independent outside directors who can at least ensure the independence of the board of directors.</li>
<li>On the nominating/compensation committees, 1/3 of companies are chaired by an inside director. Few committees have clear policies for selecting directors/CEO, and aren involved in determining compensation of individual directors.</li>
<li>More companies are complying with regard to sustainability. However, it is necessary to analyze whether the target is an acceptable time frame and whether the target value is too low.</li>
</ul>


Only 12.1% of prime market listed companies have a majority of independent outside directors who can at least ensure the independence of the board of directors.
On the nominating/compensation committees, 1/3 of companies are chaired by an inside director. Few committees have clear policies for selecting directors/CEO, and aren involved in determining compensation of individual directors.
More companies are complying with regard to sustainability. However, it is necessary to analyze whether the target is an acceptable time frame and whether the target value is too low.


Main Issue Is the Content Rather than the Progress in Complying with the Corporate Governance Code

<ul>
<li>If we want to increase women directors even to growth market companies, we can solve this problem by extending the scope of this comply-or-explain requirement to growth market companies.</li>
<li>It is a fact that companies with top female executives have more women on their boards of directors. It’s required to create support to increase the number of women founders.</li>
<li>Rather than setting targets for the ratio of female managers, which are vague and unworkable, a framework should be created to support female founders.</li>
</ul>


If we want to increase women directors even to growth market companies, we can solve this problem by extending the scope of this comply-or-explain requirement to growth market companies.
It is a fact that companies with top female executives have more women on their boards of directors. It’s required to create support to increase the number of women founders.
Rather than setting targets for the ratio of female managers, which are vague and unworkable, a framework should be created to support female founders.


Women Founders Should Be Supported Rather than Goals that Are Less Feasible for Achieving Diversity

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)

Continuing Deflationary Cycle Will Not Raise Younger Generation's Desire to Marry and Have Children

I would like to discuss the issues on the Nikkei article, "Young Generation's Willingness to Get Married and Have Children Has Declined...

Metrical Inc

Criteria for TOPIX Components and Prime Market Listing Criteria Should Be Discussed Separately

TSE disclosed a document entitled "Review of TOPIX" on September 9, 2022. I would like to discuss the issues on this disclosure document.

Metrical Inc

Main Issue Is the Content Rather than the Progress in Complying with the Corporate Governance Code

I would like to discuss the issues on the "Status of Compliance with the Corporate Governance Code" released by the TSE.

Metrical Inc

Women Founders Should Be Supported Rather than Goals that Are Less Feasible for Achieving Diversity

I would like to discuss the issues on the Nikkei article, "Women on board of directors is a challenge for 50% of emerging market listed companies...

Metrical Inc

Share Repurchases Should Be Tailored to the Individual Company's Effective Cash Allocation

I would like to discuss the issues on the Nikkei article which states that "August share buyback quotas increased 43% YoY, a record high for August."

Metrical Inc

Continuing Deflationary Cycle Will Not Raise Younger Generation's Desire to Marry and Have Children

I would like to discuss the issues on the Nikkei article, "Young Generation's Willingness to Get Married and Have Children Has Declined...

Metrical Inc

Criteria for TOPIX Components and Prime Market Listing Criteria Should Be Discussed Separately

TSE disclosed a document entitled "Review of TOPIX" on September 9, 2022. I would like to discuss the issues on this disclosure document.

Metrical Inc

Main Issue Is the Content Rather than the Progress in Complying with the Corporate Governance Code

I would like to discuss the issues on the "Status of Compliance with the Corporate Governance Code" released by the TSE.

Metrical Inc

Women Founders Should Be Supported Rather than Goals that Are Less Feasible for Achieving Diversity

I would like to discuss the issues on the Nikkei article, "Women on board of directors is a challenge for 50% of emerging market listed companies...

Metrical Inc