On December 15, ACGA released its new "ACGA Statement on Corporate Governance Reform in Japan" in both Japanese and English. A press release was also released to the media.
The Statement is a follow-up to the 2008 ACGA "Japan White Paper" and a response to the various corporate governance policy papers produced this year by leading business and government agencies in Japan -- namely, the Nippon Keidanren, Ministry of Economy, Trade and Industry (METI), Financial Services Agency (FSA), and Tokyo Stock Exchange (TSE).
The aim of the Statement is to provide constructive input into the ongoing corporate governance policy and rule-making process in Japan and the basis for further engagement with officials, regulators, companies and investors. The Statement is being endorsed by many of ACGAs largest institutional investor members from Asia, Canada, Europe, the UK and US.
The statement analyses and offers reform recommendations on five main issues:
- The role of independent directors vis-à-vis statutory auditors (Kansayaku);
- Shareholder meetings and proxy voting;
- Private placements and other capital-raising issues;
- Cross-shareholdings and other equity investments;
- Company-investor dialogue.
Key recommendations include:
- Amend the definition of outside directors in Japans Companies Act to introduce the concept of independent directors and put it on a firm legal foundation.
- Move towards full voting by poll at shareholder meetings as soon as possible.
- Require full disclosure of listed company cross-shareholdings and major equity holdings in outside companies.
- Adopt a national code of corporate governance setting down best-practice principles to augment existing laws and regulations.
Since its launch, the Statement has received the following media and other coverage:
- Daiwa Research (Japanese version), January 15, 2010.
- Commercial Law Review (Japanese version), January 15, 2010.
- Pension Fund Association Presentation (Japanese version), January 20, 2010.
- Financial Times, December 15, 2009: "Investors place little hope in Japanese reforms".
- Nikkei (English version), December 15, 2009: "Foreign Pension Funds Call For Dilution Rules At Japan Firms".
- Nikkei (Japanese version), December 15, 2009.