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>As cross-shareholding structure begins to break down and concerns grow over the influence of activist investors, an increasing number of companies are introducing shareholder benefits to win over individual shareholders.</li>
<li>Some believe that having more individual investors not only helps limit declines—particularly during market downturns—but also lowers the cost of capital. However, it's unclear whether shareholder benefits are effective.</li>
<li>Retail investors aren't the only diverse investors. Institutional investors also engage in a variety of investment strategies, and repurchasing treasury stock is an effective way to reduce stock price volatility.</li>
</ul>


As cross-shareholding structure begins to break down and concerns grow over the influence of activist investors, an increasing number of companies are introducing shareholder benefits to win over individual shareholders.
Some believe that having more individual investors not only helps limit declines—particularly during market downturns—but also lowers the cost of capital. However, it's unclear whether shareholder benefits are effective.
Retail investors aren't the only diverse investors. Institutional investors also engage in a variety of investment strategies, and repurchasing treasury stock is an effective way to reduce stock price volatility.


More Companies Are Introducing Shareholder Benefits Without Addressing Concerns About Fairness

<ul>
<li>While the number of shareholder proposals passed at the June AGMs remained at the usual level of two, those receiving over 40% approval increased from four in 2025 to 11.</li>
<li>The shareholding of foreigners, based on votes, has risen to 28.3%, and while the influence of overseas investors is growing, they still need support of domestic investors to secure majority.</li>
<li>Even if not approved, the company should respect shareholder proposals that receive high approval rate as the shareholders views, and it's important to maintain a sense of accountability toward shareholders.</li>
</ul>


While the number of shareholder proposals passed at the June AGMs remained at the usual level of two, those receiving over 40% approval increased from four in 2025 to 11.
The shareholding of foreigners, based on votes, has risen to 28.3%, and while the influence of overseas investors is growing, they still need support of domestic investors to secure majority.
Even if not approved, the company should respect shareholder proposals that receive high approval rate as the shareholders views, and it's important to maintain a sense of accountability toward shareholders.


Few Shareholder Proposals Have Passed, but the Chances of Them Passing Are Gradually Increasing

<ul>
<li>Listing means validating corporate value through market value, and choosing listing market expands opportunities to increase market value. Companies changing markets to maintain listing that lead to declining market value.</li>
<li>When transitioning to a market with lower trading liquidity, strategies for maintaining and increasing market value (shareholder value) after the market change should also be discussed in the board meetings.</li>
<li>Since maintaining a public listing, delisting, or changing stock exchanges are matters that affect shareholder interests, conducting thorough discussions is one of the board directors’ fiduciary duties.</li>
</ul>


Listing means validating corporate value through market value, and choosing listing market expands opportunities to increase market value. Companies changing markets to maintain listing that lead to declining market value.
When transitioning to a market with lower trading liquidity, strategies for maintaining and increasing market value (shareholder value) after the market change should also be discussed in the board meetings.
Since maintaining a public listing, delisting, or changing stock exchanges are matters that affect shareholder interests, conducting thorough discussions is one of the board directors’ fiduciary duties.


Doesn't the Company Think that once It Moves to a Market with Lax Listing Criteria, It's All Over?

<ul>
<li>Although the number of individual shareholders has increased—partly due to a rising number of companies implementing stock splits—the proportion of shares held by individuals has hardly risen at all.</li>
<li>While the ownership of other investor groups have remained flat, that of foreign corporations has continued rising. Listed companies are increasingly forced to pay close attention to overseas investors' shareholdings.</li>
<li>While the shareholding ratio of corporations has been steadily declining, share buybacks have increased. This suggests that the unwinding of cross-shareholdings between corporations and financial institutions is likely to continue.</li>
</ul>


Although the number of individual shareholders has increased—partly due to a rising number of companies implementing stock splits—the proportion of shares held by individuals has hardly risen at all.
While the ownership of other investor groups have remained flat, that of foreign corporations has continued rising. Listed companies are increasingly forced to pay close attention to overseas investors' shareholdings.
While the shareholding ratio of corporations has been steadily declining, share buybacks have increased. This suggests that the unwinding of cross-shareholdings between corporations and financial institutions is likely to continue.


Shareholding Ratio of Foreigners Stood at 34.7%, Hitting Record High for the 3rd Consecutive Year

<ul>
<li>Under the revised Corporate Governance Code, improvements are expected only from 6.9% companies that disclosed information on or after their AGM. For all other companies, compliance has become voluntary targets.</li>
<li>Investors want to change the record date so that AGM is held in July or later, when AGMs aren't concentrated. It's the companies that are stubbornly refusing to do so.</li>
<li>While continuing to avoid facing shareholders, it is hard to imagine that the company can engage with investors. Investors, in turn, should press the company more strongly on this issue.</li>
</ul>


Under the revised Corporate Governance Code, improvements are expected only from 6.9% companies that disclosed information on or after their AGM. For all other companies, compliance has become voluntary targets.
Investors want to change the record date so that AGM is held in July or later, when AGMs aren't concentrated. It's the companies that are stubbornly refusing to do so.
While continuing to avoid facing shareholders, it is hard to imagine that the company can engage with investors. Investors, in turn, should press the company more strongly on this issue.


Doesn't the Revised Corporate Governance Code Amount to Giving Listed Companies a Free Pass?

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)

More Companies Are Introducing Shareholder Benefits Without Addressing Concerns About Fairness

I will discuss the July 8 Nikkei article “Foreign Investors Also Re-Evaluating Shareholder Benefits; Adoption Rate Hits 7-Year High—The Power of...

Metrical Inc

Few Shareholder Proposals Have Passed, but the Chances of Them Passing Are Gradually Increasing

I would like to discuss the July 10 Nikkei article “Shareholder Proposals Passed at Two Companies, Including Synchro; Activist Investors Make Their...

Metrical Inc

Doesn't the Company Think that once It Moves to a Market with Lax Listing Criteria, It's All Over?

I'd like to discuss the July 8 Nikkei article “Market Changes by TSE Companies Reach Post-Restructuring High; Companies Shying Away from Prime...

Metrical Inc

Shareholding Ratio of Foreigners Stood at 34.7%, Hitting Record High for the 3rd Consecutive Year

I would like to discuss the issues on the document titled Results of the FY2025 Survey on Share Distribution,” which was disclosed by the Tokyo...

Metrical Inc

Doesn't the Revised Corporate Governance Code Amount to Giving Listed Companies a Free Pass?

I would like to discuss the July 8 Nikkei article titled “Corporate Governance Guidelines to Include Pre-AGM Disclosure of Annual Securities...

Metrical Inc