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 problem with Growth Market isn't only that IPO became the goal, but also that this market environment felt comfortable for all stakeholders—founders, venture capitals, TSE, auditors, and individual investors.</li>
<li>TSE Growth Market has historically served as a stepping stone for companies, and many successful companies have subsequently moved to higher-tier markets. Market reforms should be considered on this premise.</li>
<li>Raising the listing criteria for Prime Market (traded shares market capitalization of over 10 billion yen) is likely to be a solution for both TSE Growth Market and Prime Market.</li>
</ul>


The problem with Growth Market isn't only that IPO became the goal, but also that this market environment felt comfortable for all stakeholders—founders, venture capitals, TSE, auditors, and individual investors.
TSE Growth Market has historically served as a stepping stone for companies, and many successful companies have subsequently moved to higher-tier markets. Market reforms should be considered on this premise.
Raising the listing criteria for Prime Market (traded shares market capitalization of over 10 billion yen) is likely to be a solution for both TSE Growth Market and Prime Market.


Can the Tokyo Stock Exchange's “Growth Market Reform” Really Bring About Change?

<ul>
<li>The Tokyo Stock Exchange’s reforms to its Growth Market are having an impact on startups and venture capital firms. The era of mass IPOs has come to an end.</li>
<li>Not only did fewer IPOs occur last year, but the performance of IPO shares was also lackluster. Founders and venture capitals must consider exit strategies that don't rely on IPOs.</li>
<li>Domestic asset owners are showing increasing interest in private asset investments. However, unlike the growing number of delisting cases, the scarcity of high-growth domestic startups presents a challenge.</li>
</ul>


The Tokyo Stock Exchange’s reforms to its Growth Market are having an impact on startups and venture capital firms. The era of mass IPOs has come to an end.
Not only did fewer IPOs occur last year, but the performance of IPO shares was also lackluster. Founders and venture capitals must consider exit strategies that don't rely on IPOs.
Domestic asset owners are showing increasing interest in private asset investments. However, unlike the growing number of delisting cases, the scarcity of high-growth domestic startups presents a challenge.


The Days when Simply IPOs in Growth Market Were Opportunities to Exit and Secure Profits Are Over

<ul>
<li>There is no point in companies that meet or exceed the Prime Market listing criteria (market capitalization of 10 billion yen) choosing the Growth Market.</li>
<li>If fewer small market capitalizations IPOs list, retail investors will lose interest in Growth Market, and few institutional investors will invest in small capitalization stocks with below 10 billion yen.</li>
<li>If the listing criteria for Prime Market are raised, high growth companies will remain on Growth Market until they reach that scale, allowing both individual and institutional investors to invest.</li>
</ul>


There is no point in companies that meet or exceed the Prime Market listing criteria (market capitalization of 10 billion yen) choosing the Growth Market.
If fewer small market capitalizations IPOs list, retail investors will lose interest in Growth Market, and few institutional investors will invest in small capitalization stocks with below 10 billion yen.
If the listing criteria for Prime Market are raised, high growth companies will remain on Growth Market until they reach that scale, allowing both individual and institutional investors to invest.


The Way to Invigorate the Growth Market Is to Raise the Listing Standards for the Prime Market

<ul>
<li>It's not easy for March-fiscal-year-end companies to secure accountants. This causes a concentration of AGMs in late June, as more companies with March-fiscal-year-ends seek to disclose annual securities reports earlier.</li>
<li>Companies with March-fiscal-year-end should change their record date to postpone AGM to July or later, so that shareholders have time to review the annual securities report and attend the AGM.</li>
<li>Following the resolution of the cross-shareholding arrangement and the resignation of the former CEO as an advisor, ASICS should hold an online AGM to advance its corporate governance practices.</li>
</ul>


It's not easy for March-fiscal-year-end companies to secure accountants. This causes a concentration of AGMs in late June, as more companies with March-fiscal-year-ends seek to disclose annual securities reports earlier.
Companies with March-fiscal-year-end should change their record date to postpone AGM to July or later, so that shareholders have time to review the annual securities report and attend the AGM.
Following the resolution of the cross-shareholding arrangement and the resignation of the former CEO as an advisor, ASICS should hold an online AGM to advance its corporate governance practices.


What Corporate Governance Practices Should a “frontrunner” Adopt?

<ul>
<li>Corporate Governance Code calls for constructive dialogue, but opportunities for dialogue between directors, outside directors, and investors are insufficient. Investors question whether their suggestions regarding management challenges reach management.</li>
<li>In order for management to fulfill their accountability to investors, they must have management strategy that shows a path to improving capital profitability, otherwise constructive discussions will not be possible.</li>
<li>There are still a considerable number of companies that have not been able to shake off the idea that they do not want to provide sufficient information to overseas investors.</li>
</ul>


Corporate Governance Code calls for constructive dialogue, but opportunities for dialogue between directors, outside directors, and investors are insufficient. Investors question whether their suggestions regarding management challenges reach management.
In order for management to fulfill their accountability to investors, they must have management strategy that shows a path to improving capital profitability, otherwise constructive discussions will not be possible.
There are still a considerable number of companies that have not been able to shake off the idea that they do not want to provide sufficient information to overseas investors.


What Companies Should Do Before Engaging in Constructive Dialogue

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)

Can the Tokyo Stock Exchange's “Growth Market Reform” Really Bring About Change?

I would like to discuss the June 6 Nikkei article titled “One Year Since the TSE Growth Market Reform: 370 Companies (60%) Have a Market...

Metrical Inc

The Days when Simply IPOs in Growth Market Were Opportunities to Exit and Secure Profits Are Over

I would like to discuss the issues on the June 4 Nikkei article titled “Startup Funding in Early Stages Down 40% as Tighter Listing Rules Lead to...

Metrical Inc

The Way to Invigorate the Growth Market Is to Raise the Listing Standards for the Prime Market

I would like to discuss the issues on on the May 27 Nikkei article titled “IPOs at 16-Year Low: 60% Drop to 6 Companies in Jan–Mar as TSE Reforms...

Metrical Inc

What Corporate Governance Practices Should a “frontrunner” Adopt?

I would like to discuss the issues on the June 2 Nikkei article titled “ASICS Finds Ways to Disclose Annual Securities Report Early: Preparations...

Metrical Inc

What Companies Should Do Before Engaging in Constructive Dialogue

I would like to discuss the issues on the “Corporate Governance White Paper 2025” material disclosed by the TSE on May 26.

Metrical Inc