We have witnessed continuing progress in the corporate governance of Japanese companies every AGM season over the past three years. In the May-June 2018 AGM season, we saw again a further increase of independence and diversity in Japanese boards.
The tenet that there should be a strong and independent element on the Board, with independent directors making up at least one-third of the Board is now almost universally accepted not only by foreign investors but also by Japanese investors. Thus it is disappointing that we have not yet seen any notable progress at some Japanese companies. However, we believe the laggards will now have to start reviewing their board composition, under increasing pressure from investors and other stakeholders.
Governance For Owners has carried out an analysis of the 2018 AGM season and identified the following major improvement areas.
- Notable increase of female and non-Japanese directors.
- Increased number of companies that received shareholder proposals.
- Effects of misconducts in voting.
- Continued increase of abolishment of anti-takeover measures
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