Category

ESG

Jul 01
0

Daily Brief ESG: What Corporate Governance Practices Should a “frontrunner” Adopt? and more

By | Daily Briefs, ESG

In today’s briefing:

  • What Corporate Governance Practices Should a “frontrunner” Adopt?

What Corporate Governance Practices Should a “frontrunner” Adopt?

By Aki Matsumoto

  • 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.

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Jun 30
0

Daily Brief ESG: What Companies Should Do Before Engaging in Constructive Dialogue and more

By | Daily Briefs, ESG

In today’s briefing:

  • What Companies Should Do Before Engaging in Constructive Dialogue

What Companies Should Do Before Engaging in Constructive Dialogue

By Aki Matsumoto

  • 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.

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Jun 28
0

Daily Brief ESG: The Move to Reschedule the AGM for Late June Is Putting the Cart Before the Horse and more

By | Daily Briefs, ESG

In today’s briefing:

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

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

By Aki Matsumoto

  • 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.

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Jun 26
0

Daily Brief ESG: Are Activist Investors Starting to Realize What’s Key to Improving Corporate Governance Practices? and more

By | Daily Briefs, ESG

In today’s briefing:

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

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

By Aki Matsumoto

  • 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.  

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Jun 24
0

Daily Brief ESG: Revised Corporate Governance Code: Who Will Breathe Life Into It… and more

By | Daily Briefs, ESG

In today’s briefing:

  • Revised Corporate Governance Code: Who Will Breathe Life Into It…

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

By Aki Matsumoto

  • 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.

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Jun 23
0

Daily Brief ESG: The Key to Addressing Birth Rate Decline Lies in Providing Support to Those in Need and more

By | Daily Briefs, ESG

In today’s briefing:

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

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

By Aki Matsumoto

  • 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.

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Jun 20
0

Daily Brief ESG: How Long Will This Phase of Increasing the Effectiveness of Shareholder Return Policies Continue? and more

By | Daily Briefs, ESG

In today’s briefing:

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

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

By Aki Matsumoto

  • 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.

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Jun 19
0

Daily Brief ESG: The Root Cause Is Often a Lack of Understanding of the Underlying Premise and more

By | Daily Briefs, ESG

In today’s briefing:

  • The Root Cause Is Often a Lack of Understanding of the Underlying Premise

The Root Cause Is Often a Lack of Understanding of the Underlying Premise

By Aki Matsumoto

  • When an outside director engages in behavior such as harassment, it is only natural to question whether that person was the right choice for appointment as an independent outside director.
  • Based on the premise that directors are entrusted with management by shareholders, they owe fiduciary duties. The root of the problem lies in a lack of understanding of this premise.
  • To fulfill fiduciary duties, outside directors should act accordingly, and nomination committee　members should appoint directors. Neglecting fiduciary duties is considered management that runs counter to the interests of shareholders.

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Jun 16
0

Daily Brief ESG: There Is a Risk that the Formalization of Corporate Governance Will Continue to Advance and more

By | Daily Briefs, ESG

In today’s briefing:

  • There Is a Risk that the Formalization of Corporate Governance Will Continue to Advance

There Is a Risk that the Formalization of Corporate Governance Will Continue to Advance

By Aki Matsumoto

  • As for reviewing the overlap between annual securities reports and business reports, since the information will continue to be disclosed in business reports as before, little opposition is expected.
  • To promote the disclosure of annual securities reports before AGM, FSA plan to review the duplication between annual securities reports and business reports to reduce the workload on companies.
  • Wouldn’t this end up helping companies formalize their corporate governance practices and build a track record of pre-AGM disclosures in annual securities reports, which they are so eager to achieve?

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Jun 14
0

Daily Brief ESG: More Companies Are Saying They Want to Focus on Engagement and more

By | Daily Briefs, ESG

In today’s briefing:

  • More Companies Are Saying They Want to Focus on Engagement, but Are They Serious?

More Companies Are Saying They Want to Focus on Engagement, but Are They Serious?

By Aki Matsumoto

  • Most companies disclose their annual securities reports several days before their AGMs, and only two companies have postponed their AGMs to July, which deviates from the original intent.
  • Companies are focusing on streamlining their operations to shorten delivery times, and FSA is considering measures to reduce the workload on companies in an effort to lend a helping hand.
  • The fact that companies hold AGMs during the peak AGM season—thereby denying shareholders the time to thoroughly review annual securities reports—is the exact opposite of management that prioritizes shareholders’ interests.

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