Daily Brief ESG: Shortcut to Tension in Japanese Company Management Is Change in Voting Power of BOJ ETFs and more

In today’s briefing:

Shortcut to Tension in Japanese Company Management Is Change in Voting Power of BOJ ETFs
Align Partners’ Lee Chang-Hwan Joins SM Entertainment as a Board Member

Shortcut to Tension in Japanese Company Management Is Change in Voting Power of BOJ ETFs

METI’s survey confirms that “the number of outside directors has increased, but they aren’t completely independent, as they’re sometimes appointed by people with ties to the company” isn’t incorrect statement.
The reality is that the parent companies of Japan’s large asset management companies are financial institutions, and it’s high hurdle to vote against proposals by clients of the parent company.
The BOJ is a major shareholder in many companies through its ETF holdings. If the exercise of those voting rights changes, the management of listed companies in Japan should change.

On 20 January, SM Entertainment announced that Lee Chang-Hwan, the CEO of Align Partners Capital will join the company as a board member.
This will mark one of the first cases of an activist investor becoming a board member of a Korean company which already has a major shareholder.
We believe that Lee Chang-Hwan (CEO of APCM) joining SM Entertainment as a board member will have a positive impact on the company to meaningfully improve its corporate governance.

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