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 Nikkei article reported that, "Disclosure of sustainability-related information in securities reports is expected to become mandatory from fiscal 2023."</li>
<li>The requirement to disclose information on sustainability in annual reports, which are legal documents, is extremely significant.</li>
<li>The use of international standards for sustainability disclosure will make comparative analysis with other companies easier, and is expected to help raise the bar for companies that lag behind.</li>
</ul>


The Nikkei article reported that, "Disclosure of sustainability-related information in securities reports is expected to become mandatory from fiscal 2023."
The requirement to disclose information on sustainability in annual reports, which are legal documents, is extremely significant.
The use of international standards for sustainability disclosure will make comparative analysis with other companies easier, and is expected to help raise the bar for companies that lag behind.


Japan's Governance: About an Article on Natural and Human Capital Disclosures

<ul>
<li>The Nikkei Newspaper on April 15 published an article about wage gap between men and women. I would like to discuss this issue, referring to surveys conducted by the government</li>
<li>The direct cause of this issue is that there is disparity between men and women even among regular employees, and that large percentage of women are employed in non-regular labor.</li>
<li>Indirect factors can be attributed to the working environment and legal system that tolerates the above. This problem is also connected to issues of human rights and diversity.</li>
</ul>


The Nikkei Newspaper on April 15 published an article about wage gap between men and women. I would like to discuss this issue, referring to surveys conducted by the government
The direct cause of this issue is that there is disparity between men and women even among regular employees, and that large percentage of women are employed in non-regular labor.
Indirect factors can be attributed to the working environment and legal system that tolerates the above. This problem is also connected to issues of human rights and diversity.


Japan's Government: About an Article on Wage Disparity Between Men and Women

<ul>
<li>On November 30, 2021, Nikkei Shimbun published article titled "Human Rights Risks in Supply Chains, 52% of Listed Companies Understand." I would like to consider the issues in the article.</li>
<li>The METI survey shows that only a small number of companies have developed human rights policies and conducted human rights due diligence.</li>
<li>It’s clear that progress will not be made unless management itself takes the initiative and takes action to root a corporate culture of respect for human rights within the company.</li>
</ul>


On November 30, 2021, Nikkei Shimbun published article titled "Human Rights Risks in Supply Chains, 52% of Listed Companies Understand." I would like to consider the issues in the article.
The METI survey shows that only a small number of companies have developed human rights policies and conducted human rights due diligence.
It’s clear that progress will not be made unless management itself takes the initiative and takes action to root a corporate culture of respect for human rights within the company.


Japan's Governance: About an Article on Human Rights Due Diligence

<ul>
<li>The number of companies participating in electronic-voting platform increased, but most of them are prime market companies. This is because "participation in electronic-voting platform" was included in the listing criteria.</li>
<li>According to a survey conducted by METI, there are issues that are not user-friendly, such as the need to resolve the issue of "procedural duplication" when voting electronically.</li>
<li>This issue isn't a matter of an electronic-platform, but requires change in the overall institutional design for electronic shareholder meetings, together with the computerization and online-accessibility of documents for AGMs,.</li>
</ul>


The number of companies participating in electronic-voting platform increased, but most of them are prime market companies. This is because "participation in electronic-voting platform" was included in the listing criteria.
According to a survey conducted by METI, there are issues that are not user-friendly, such as the need to resolve the issue of "procedural duplication" when voting electronically.
This issue isn't a matter of an electronic-platform, but requires change in the overall institutional design for electronic shareholder meetings, together with the computerization and online-accessibility of documents for AGMs,.


Japan's Governance: About an Article on the Introduction of Electronic Voting for the AGMs

<ul>
<li>Since all 9 companies have low foreign shareholding ratios due to the presence of large shareholders, a shortcut to increasing stock price performance is to increase the foreign shareholding ratio.</li>
<li>Unless it's feasible to reduce stake of major shareholders, the key will be to raise ROA, which is correlated with valuations, so growth policy and capital allocation must be clarified.</li>
<li>For long-term investors, continued increase in the % independent directors is also helpful. The stock performance of these companies will likely vary in the future depending on the measures taken.</li>
</ul>


Since all 9 companies have low foreign shareholding ratios due to the presence of large shareholders, a shortcut to increasing stock price performance is to increase the foreign shareholding ratio.
Unless it's feasible to reduce stake of major shareholders, the key will be to raise ROA, which is correlated with valuations, so growth policy and capital allocation must be clarified.
For long-term investors, continued increase in the % independent directors is also helpful. The stock performance of these companies will likely vary in the future depending on the measures taken.


Japan's Governance: About an Article on Companies to Which Transitional Measures Are Applied

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)

Japan's Governance: About an Article on Natural and Human Capital Disclosures

This article will discuss on the issues on "Disclosure of sustainability-related information in securities reports is expected to become mandatory...

Metrical Inc

Japan's Government: About an Article on Wage Disparity Between Men and Women

The Nikkei Newspaper on April 15 published an article about wage gap between men and women. I would like to discuss this issue, referring to...

Metrical Inc

Japan's Governance: About an Article on Human Rights Due Diligence

This article will discuss the issues of human rights due diligence, referring to the Nikkei article on November 30, 2021 and The Ministry of...

Metrical Inc

Japan's Governance: About an Article on the Introduction of Electronic Voting for the AGMs

Nikkei published an article titled "e-Voting for General Meetings Increases 40%; Prime Market Listed Companies Progressing in Response." This...

Metrical Inc

Japan's Governance: About an Article on Companies to Which Transitional Measures Are Applied

I considered the issue of Nikkei article regarding "the lackluster stock price performance of companies whose tradable share ratio does not meet...

Metrical Inc