Category

ESG

Jul 21
0

Daily Brief ESG: Rather than “Technical Guidance and more

By | Daily Briefs, ESG

In today’s briefing:

  • Rather than “Technical Guidance,” What Is Needed Is Thorough Fiduciary Duty to Shareholders

Rather than “Technical Guidance,” What Is Needed Is Thorough Fiduciary Duty to Shareholders

By Aki Matsumoto

  • While very few companies allocate cash appropriately, many companies simply announce small-scale share buybacks, resulting in cash being used in a half-hearted manner for both growth and shareholder returns.
  • The problem is that many managers lack awareness of their fiduciary responsibility to make sincere decisions on cash allocation based on the idea that free cash flow belongs to shareholders.
  • Even for listed companies, the time has come to discuss the role of managers who are unable to thoroughly fulfill their fiduciary duties to shareholders.

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Jul 19
0

Daily Brief ESG: Companies Seem Reluctant to Hold Online AGMs with Online Attendance and more

By | Daily Briefs, ESG

In today’s briefing:

  • Companies Seem Reluctant to Hold Online AGMs with Online Attendance

Companies Seem Reluctant to Hold Online AGMs with Online Attendance

By Aki Matsumoto

  • Online AGMs using Internet account for 18%. More than 90% of these meetings are limited to broadcasting the meeting, without allowing shareholders to exercise their voting rights during the meeting.
  • Technical issues are cited as the reason why online shareholder meetings are not increasing, and the Ministry of Justice’s advisory board is discussing legal reforms.
  • For companies whose goal is to pass company proposals at AGMs and end quickly, even if the resolution of issues is included in legal revision, it will have little effect.

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Jul 17
0

Daily Brief ESG: Gender Inequality in Politics Is Preventing Implementation of Measures to Achieve Gender Equality and more

By | Daily Briefs, ESG

In today’s briefing:

  • Gender Inequality in Politics Is Preventing Implementation of Measures to Achieve Gender Equality

Gender Inequality in Politics Is Preventing Implementation of Measures to Achieve Gender Equality

By Aki Matsumoto

  • Japan’s overall gender gap index for 2025 remained unchanged from 2024 (118th place), with only slight improvements. The tendency toward significant gender disparities in politics and economics remains unchanged.
  • Gender wage gaps are caused by the low percentage of women in managerial positions, and the reason for this is that women bear the brunt of childcare and housework.
  • Political leadership is necessary to reform traditional gender inequality values and implement measures that allow women to continue working after giving birth and raising children.

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Jul 16
0

Daily Brief ESG: Starhub Ltd: An Analysis of the Returns to Shareholders and Governance and more

By | Daily Briefs, ESG

In today’s briefing:

  • Starhub Ltd: An Analysis of the Returns to Shareholders and Governance

Starhub Ltd: An Analysis of the Returns to Shareholders and Governance

By Tan Yee Peng

  • We commend StarHub for putting shareholder returns as a key priority; it is front and centre in its annual reports, and a significant portion of the CEO’s compensation is tied to returns targets.
  • This is certainly not common among SGX listed companies, many of which do not even have Return on Equity (“ROE”) targets.
  • In fact, less than 20% of SGX companies have 5-year average ROE of more than 10%, which is approximately the cost of equity for most companies.

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Jul 15
0

Daily Brief ESG: There Is Also a Difference in Perspective Between Investors and Companies on the Remuneration System and more

By | Daily Briefs, ESG

In today’s briefing:

  • There Is Also a Difference in Perspective Between Investors and Companies on the Remuneration System

There Is Also a Difference in Perspective Between Investors and Companies on the Remuneration System

By Aki Matsumoto

  • From the perspective of securing human resources, global companies have increased ％ of performance-based compensation and stock-based compensation, but there is still large gap between them and many other companies.
  • Most Prime Market-listed companies have established remuneration committees, but do not disclose individual executive compensation, raising doubts about the transparency of the remuneration decision-making process.
  • As an element of performance-based compensation, many companies still place far greater emphasis on profits than on capital profitability, which leads to a difference in perspective with investors.

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Jul 13
0

Daily Brief ESG: Does Introducing Incentive into Remuneration of Independent Directors Compromise Their Independence? and more

By | Daily Briefs, ESG

In today’s briefing:

  • Does Introducing Incentive into Remuneration of Independent Directors Compromise Their Independence?

Does Introducing Incentive into Remuneration of Independent Directors Compromise Their Independence?

By Aki Matsumoto

  • Some companies adopt policy of not granting performance-based compensation to outside directors to ensure independence. Given this, outside directors may have little incentive to leverage skills and knowledge in value-creation.
  • Most independent board members also serve as board members of other companies, but very few companies have set clear standards for the number of concurrent positions that may be held.
  • Although few companies disclose the criteria for the tenure of independent directors, the longest term was 12 years. ISS has set this as the standard in its voting guidelines.

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Jul 11
0

Daily Brief ESG: The Gap with Investors’ Perspective Stems from Managers Trying to Distance Themselves from Investors and more

By | Daily Briefs, ESG

In today’s briefing:

  • The Gap with Investors’ Perspective Stems from Managers Trying to Distance Themselves from Investors

The Gap with Investors’ Perspective Stems from Managers Trying to Distance Themselves from Investors

By Aki Matsumoto

  • The trend of AGMs being concentrated in the last week of June remains unchanged, and this’s seen as attempt to divert shareholder attention and reluctant attitude toward dialogue with shareholders.
  • The rise in share proposals has made some managers wary, and we are not optimistic about pushing AGM later dates and disclosing annual securities reports well in advance of AGM.
  • There are gap between what is stated and what actually happens in “the reasons for not introducing anti-takeover measures,” “compliance with constructive dialogue with shareholders,” and disclosure of “TSE’s requests.”

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Jul 09
0

Daily Brief ESG: Significance of The “3% Rule” In the Revision of the Commercial Act in Korea and more

By | Daily Briefs, ESG

In today’s briefing:

  • Significance of The “3% Rule” In the Revision of the Commercial Act in Korea
  • The Change in Record Date Is Difficult, and Most AGMs Next Year Will Be Held in June

Significance of The “3% Rule” In the Revision of the Commercial Act in Korea

By Douglas Kim

  • One of the most important changes in the revisions of the Commercial Act in Korea that was passed in the Parliament last week was the “3% rule.” 
  • In this insight, we provide details of this 3% rule and how it is likely to significantly impact the Korean equity markets. 
  • Major impact of the 3% rule is it is likely to shake up the BODs at many Korean companies. Many global activist investors will likely be more active in Korea.

The Change in Record Date Is Difficult, and Most AGMs Next Year Will Be Held in June

By Aki Matsumoto

  • T&D Holdings and HOYA, two March fiscal year-end companies that filed their annual securities reports more than 2 weeks ago this year, have previously filed their reports 2-3 weeks earlier.
  • Only two companies will revise articles of incorporation this year and postpone the record date. Most companies will hold AGM in June next year and file reports just before AGM.
  • Since institutional investors decide their votes based on various aspects of the company as a whole, companies should disclose their annual securities reports well in advance of AGM.

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Jul 07
0

Daily Brief ESG: Higher Foreign Shareholdings and more

By | Daily Briefs, ESG

In today’s briefing:

  • Higher Foreign Shareholdings, Which Led to Fewer Takeover Defense, Push Companies To Further Reforms

Higher Foreign Shareholdings, Which Led to Fewer Takeover Defense, Push Companies To Further Reforms

By Aki Matsumoto

  • Takeover defenses peaked in 2008 and have been gradually declining. The direct cause of the difficulty in maintaining advance warning-type takeover defenses is the increase in the foreign shareholding ratio.
  • Even companies that don’t have preemptive anti-takeover may take countermeasures when the risk of takeover increases, but with the publication of “Guidelines on Takeover Defense Measures,” transparent practices are expected.
  • Not only parent-subsidiary listings, but companies that cannot transform management to generate more cash from holding cash on hand and assets will be unable to continue in their current situation.

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Jul 06
0

Daily Brief ESG: Will Management that Incorporates Cost of Capital Be Fully Implemented 7 Years from Now and more

By | Daily Briefs, ESG

In today’s briefing:

  • Will Management that Incorporates Cost of Capital Be Fully Implemented 7 Years from Now, in 2028?

Will Management that Incorporates Cost of Capital Be Fully Implemented 7 Years from Now, in 2028?

By Aki Matsumoto

  • Considering that it took seven years to finally begin reducing policy-held shares, it seems reasonable to assume that many companies will begin seriously incorporating capital costs into management in 2028.
  • TSE states that while Prime Market has most companies whose initiatives are out of step with investors’ perspectives, companies whose initiatives are highly regarded by investors show superior stock performance.
  • TSE appears to be placing its hopes on efficient market hypothesis. However, investors need to see increase in capital profitability that will convince them of the path to value creation.

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