Category

ESG

Aug 23
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: Few Shareholder Proposals Have Passed and more

By | Daily Briefs, ESG

In today’s briefing:

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

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

By Aki Matsumoto

  • 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.

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Aug 21
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: Doesn’t the Company Think that once It Moves to a Market with Lax Listing Criteria and more

By | Daily Briefs, ESG

In today’s briefing:

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

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

By Aki Matsumoto

  • 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.

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Aug 19
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: Shareholding Ratio of Foreigners Stood at 34.7% and more

By | Daily Briefs, ESG

In today’s briefing:

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

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

By Aki Matsumoto

  • 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.

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Aug 17
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: Doesn’t the Revised Corporate Governance Code Amount to Giving Listed Companies a Free Pass? and more

By | Daily Briefs, ESG

In today’s briefing:

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

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

By Aki Matsumoto

  • 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.

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Aug 16
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: Korea Corporate Value Up Weekly Review #1 [Week Ending 14 August 2026] and more

By | Daily Briefs, ESG

In today’s briefing:

  • Korea Corporate Value Up Weekly Review #1 [Week Ending 14 August 2026]

Korea Corporate Value Up Weekly Review #1 [Week Ending 14 August 2026]

By Douglas Kim

  • This is our inaugural issue of Korea Corporate Value Up Weekly. There were 12 companies in Korea that provided corporate value up announcements in the past week (ending 14 August).
  • Corporate governance improvement is one of the most important factors among companies in Korea. By closely tracking these announcements in more detail, this could potentially result in extra alpha generation. 
  • Among these 12 companies, two of them outperformed KOSPI which included GS Holdings (078930 KS) (up 18.3%) and Shinsung Eng (104110 KS) (up 11.6%). 

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Aug 15
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: For Outside Directors to Fulfill Duties as Independent Directors—rather than Simply Acting as Guests and more

By | Daily Briefs, ESG

In today’s briefing:

  • For Outside Directors to Fulfill Duties as Independent Directors—rather than Simply Acting as Guests

For Outside Directors to Fulfill Duties as Independent Directors—rather than Simply Acting as Guests

By Aki Matsumoto

  • While improving board practices may create value, we should assume that key actions can directly impact on value creation, improving value creation can, in turn, influence improvements in board practices.
  • Even if a Board of Directors Secretariat is established, many companies will simply set up such a department as a formality, out of a sense of obligation to follow suit.
  • Outside directors taking the initiative in board meetings is very important. To that end, in companies where outside directors constitute a majority, an outside director should serve as chair.

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Aug 13
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: Does the “curse” of Secured Loans Still Influence the Mindset of Managers Today? and more

By | Daily Briefs, ESG

In today’s briefing:

  • Does the “curse” of Secured Loans Still Influence the Mindset of Managers Today?

Does the “curse” of Secured Loans Still Influence the Mindset of Managers Today?

By Aki Matsumoto

  • The fact that many companies have yet to review their business portfolios is the reason why the effective utilization of capital and assets is progressing so slowly.
  • Even when complying with “interpretation guidelines,” it’s easy to imagine that companies will fall into two categories: those that set high standards and those that merely meet the minimum requirements.
  • In Japan, where secured loans have traditionally been dominant, the historical emphasis on assets that could be used as collateral may have influenced management’s preference for maintaining high cash reserves.

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Aug 11
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: Focus on How Practices Improve for Value Creation and more

By | Daily Briefs, ESG

In today’s briefing:

  • Focus on How Practices Improve for Value Creation, Not Whether Improved Practices Helps Create Value

Focus on How Practices Improve for Value Creation, Not Whether Improved Practices Helps Create Value

By Aki Matsumoto

  • This third revision of the Corporate Governance Code aims to enhance the effectiveness of the Code’s provisions while building on the momentum of previous revisions.
  • FSA and TSE aim to return to the original model, in which managers themselves take the initiative in decision-making. However, few companies improved corporate governance practices through managers’ own initiative.
  • In the area of corporate governance as well, listed companies should be held accountable for how they have improved their corporate governance practices to achieve their goals.

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Aug 09
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: As for the Amount Eligible for Profit Distribution Under the Rules and more

By | Daily Briefs, ESG

In today’s briefing:

  • As for the Amount Eligible for Profit Distribution Under the Rules, That’s One Thing…

As for the Amount Eligible for Profit Distribution Under the Rules, That’s One Thing…

By Aki Matsumoto

  • Under Companies Act, the amount available for profit distribution is based on parent company profits; however, with increased holding companies, parent companies alone often cannot accurately reflect actual business operations.
  • As an initiative by the company to address the discrepancy between these rules and actual business practices, the use of “reversal of capital reserves” is a commendable approach.
  • It’s certainly true that many companies don’t yet provide sufficient shareholder returns. Meantime, investors want to hear about companies’ investment plans and cash allocation strategies aimed at increasing corporate value.

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Aug 07
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: Avoid Letting Companies Fall into Formalism by Aligning Evaluation with Investors’ Perspectives and more

By | Daily Briefs, ESG

In today’s briefing:

  • Avoid Letting Companies Fall into Formalism by Aligning Evaluation with Investors’ Perspectives

Avoid Letting Companies Fall into Formalism by Aligning Evaluation with Investors’ Perspectives

By Aki Matsumoto

  • Most companies simply tack on criteria related to skills/background to rubber-stamp the composition of current board of directors, and a few disclose explanations of these criteria, scouting or nomination policies.
  • To prevent companies from falling into formalism, evaluations should focus first and foremost on whether they have created value, rather than on improvements in corporate governance practices.
  • We should not assume that value creation metrics improved simply because board practices improved; rather, companies that have shifted to value-creating management tend to also work on improving board practices.

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