Change for the better: Corporate governance in Japan - by Kazuhiro Toyoda, Fund Manager, Japanese Equities

Summary:

• We firmly believe that in equity investing, active engagement with management helps to maximise shareholder value in the long term and Japan is no exception.
• We feel that in Japan investor expectations and companies' goals are not aligned. The 'constructive engagement' can act as one of the most effective ways of closing the gap between these two, and helping ensure companies attract long-term investment.
• Fortunately, the proportion of cross holdings has been decreasing and some regulations have been amended to support these engagement activities now.
• We see the introduction of 'Japan's Stewardship Code', and the activities to improve relationships between companies and investors as ways forward in the pursuit of better corporate governance.
  

Read full article from Kazuhiro Toyoda, Fund Manager, Japanese Equities