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>In response to a request from FSA last year to disclose annual securities reports prior to the date of AGM, more companies are holding their meetings in late June.</li>
<li>Regulators should require listed companies to both stagger the dates of their AGMs and disclose their annual securities reports several weeks prior to the AGM.</li>
<li>By limiting shareholder participation through measures against professional agitators, quickly approving management proposals and ending AGMs has become the norm for companies.</li>
</ul>


In response to a request from FSA last year to disclose annual securities reports prior to the date of AGM, more companies are holding their meetings in late June.
Regulators should require listed companies to both stagger the dates of their AGMs and disclose their annual securities reports several weeks prior to the AGM.
By limiting shareholder participation through measures against professional agitators, quickly approving management proposals and ending AGMs has become the norm for companies.


The Move to Reschedule the AGM for Late June Is Putting the Cart Before the Horse

<ul>
<li>Many companies hold AGMs in June but cannot disclose their securities reports at least three weeks in advance of AGM. In other words, many companies are facing the same problem.</li>
<li>The AGM date and the pre-AGM disclosures in the securities report serve as a litmus test for whether management is engaging with shareholders and conducting business from their perspective.</li>
<li>It may be that activist investors have begun to realize that the date of the AGM and the pre-AGM disclosure of securities reports are fundamental to corporate governance practices.  </li>
</ul>


Many companies hold AGMs in June but cannot disclose their securities reports at least three weeks in advance of AGM. In other words, many companies are facing the same problem.
The AGM date and the pre-AGM disclosures in the securities report serve as a litmus test for whether management is engaging with shareholders and conducting business from their perspective.
It may be that activist investors have begun to realize that the date of the AGM and the pre-AGM disclosure of securities reports are fundamental to corporate governance practices.  


Are Activist Investors Starting to Realize What's Key to Improving Corporate Governance Practices?

<ul>
<li>Management must shift from mindset of “doing only what's specified” and rethink true meaning of being a corporation, significance of going public, and management approach required to achieve those goals.</li>
<li>As the responsibilities of outside directors have grown, questions are being raised about their effectiveness, given that profitability hasn't improved and scandals occurred at companies with the same outside directors.</li>
<li>Just because the principle has been elevated to “the effective functioning of outside directors” doesn't mean that outside directors can suddenly do things they were previously unable to do.</li>
</ul>


Management must shift from mindset of “doing only what's specified” and rethink true meaning of being a corporation, significance of going public, and management approach required to achieve those goals.
As the responsibilities of outside directors have grown, questions are being raised about their effectiveness, given that profitability hasn't improved and scandals occurred at companies with the same outside directors.
Just because the principle has been elevated to “the effective functioning of outside directors” doesn't mean that outside directors can suddenly do things they were previously unable to do.


Revised Corporate Governance Code: Who Will Breathe Life Into It...

<ul>
<li>The average desired number of children among single people has declined for both men and women between 1982 and 2021, though the decline has been more pronounced among women.</li>
<li>This is due to economic issues common to both men and women, such as education and housing, as well as the challenges women face in balancing childcare and work.</li>
<li>While female employment has been increasing year by year, many women are still forced to leave their jobs because the burden of child-rearing falls heavily on them.</li>
</ul>


The average desired number of children among single people has declined for both men and women between 1982 and 2021, though the decline has been more pronounced among women.
This is due to economic issues common to both men and women, such as education and housing, as well as the challenges women face in balancing childcare and work.
While female employment has been increasing year by year, many women are still forced to leave their jobs because the burden of child-rearing falls heavily on them.


The Key to Addressing Birth Rate Decline Lies in Providing Support to Those in Need

<ul>
<li>While more companies are formulating and disclosing capital policies over past 2 years, fewer than half can specifically articulate strategies for achieving profitability that exceeds their cost of capital.</li>
<li>Only a handful of companies have disclosed a roadmap for specific measures to improve profitability, and it appears it will take time for most companies to reach that stage.</li>
<li>About 60% of the companies that responded are currently revising their business portfolio strategies, but this percentage has increased only slightly compared to two years ago.</li>
</ul>


While more companies are formulating and disclosing capital policies over past 2 years, fewer than half can specifically articulate strategies for achieving profitability that exceeds their cost of capital.
Only a handful of companies have disclosed a roadmap for specific measures to improve profitability, and it appears it will take time for most companies to reach that stage.
About 60% of the companies that responded are currently revising their business portfolio strategies, but this percentage has increased only slightly compared to two years ago.


How Long Will This Phase of Increasing the Effectiveness of Shareholder Return Policies Continue?

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)

The Move to Reschedule the AGM for Late June Is Putting the Cart Before the Horse

I would like to discuss the issues on on the June 3 Nikkei article titled “June Shareholders’ Meetings Peak on June 26; Trend Toward Spreading Out...

Metrical Inc

Are Activist Investors Starting to Realize What's Key to Improving Corporate Governance Practices?

I would like to discuss the issues on the May 25 Nikkei article “Activist Investors Submit Proposals to Record 52 Companies; ‘Template Proposals’...

Metrical Inc

Revised Corporate Governance Code: Who Will Breathe Life Into It...

I would like to discuss the issues on the May 20 Nikkei article titled “Corporate Governance Code: What the ‘Upgrade’ of Principles Implies.”

Metrical Inc

The Key to Addressing Birth Rate Decline Lies in Providing Support to Those in Need

I would like to discuss the issues on the April 18 Nikkei article titled “Evaluating the ‘White Paper on Population Issues.’”

Metrical Inc

How Long Will This Phase of Increasing the Effectiveness of Shareholder Return Policies Continue?

I would like to discuss the issues on on the May 20 Nikkei article titled “Disclosure of Capital Policies by Listed Companies Expands to 60%.”

Metrical Inc