Japanese boardrooms are becoming more knowledgeable on corporate governance issues while shareholders are acting to more fully participate in the management of companies. These are the conclusions from an S&P report on corporate governance in Japan.
Shareholders are proving an important indicator. Shareholder meetings are typically held at the end of June, but as participation and awareness increases, the meetings are becoming dispersed throughout the year. According to S&P, this shows shareholders are taking a more active interest in company proceedings.
Issues such as board member compensation are coming to the fore, with investors calling for disclosure of the amounts due in relation to business performance. Those companies with a large proportion of foreign investors are particularly likely to undergo corporate governance reform.
"Progress has continued steadily, with the concentration of meetings on the same day dispersing, board reforms being approved, and shareholders in general taking a more active role in the meetings," says Hiroko Kiguchi, director of S&P's corporate governance unit in Tokyo. "Companies are no longer able to ignore shareholder concerns, such as on remuneration," he adds.