On May 15, 2008, the "White Paper on Corporate Governance in Japan", a new policy document on corporate governance in Japan published by ACGA, was launched. The Japanese version of the paper can be downloaded here.
The launch was held at the offices of White & Case in Tokyo. Ninety-two people, including 60 guests and 32 press, attended. Among the guests were fund managers, directors of banks, government officials, representatives from think tanks and academicians.
The “Japan White Paper” is the first collaborative effort of its kind focussing on corporate governance issues in Japan and involving global institutional investors. It has been compiled with the support and input of ACGA members and is endorsed by leading global pension funds and fund mangers, including: Aberdeen Asset Management, Singapore; Alliance Trust Asset Management (Asia-Pacific), Hong Kong; British Columbia Investment Management Corporation, Canada; the California Public Employees’ Retirement System (CalPERS), USA; California State Teachers' Retirement System (CalSTRS), USA; F&C Asset Management, UK; Hermes Fund Managers, UK; PGGM Investments, The Netherlands; RAILPEN Investments, UK; and the Universities Superannuation Scheme, UK.
The paper states that sound corporate governance is essential to build a more internationally competitive corporate sector in Japan and to the longer-term growth of the Japanese economy and its capital markets. It argues that while a number of leading Japanese companies have improved their corporate governance practices in recent years, the system of governance in most Japanese listed companies fail to meet the needs of stakeholders or the nation in three ways:
- By not providing for adequate supervision of corporate strategy;
- By protecting management from the discipline of the market, thus rendering the development of a healthy and efficient market in corporate control all but impossible;
- By failing to provide the returns that are vitally necessary to protect Japan's social safety net—its pension system.
Accordingly, the White Paper makes recommendations on six key issues:
- Recognition of shareholders as owners of listed companies
- Efficient use of capital
- Independent supervision of management
- Pre-emption rights and third-party share placements
- Poison pill takeover defences
- Fairness and transparency in shareholder voting
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