Corporate Governance 2023 - Trends And Developments

Introduction

In recent years, activist shareholders have been increasingly active in Japan. During the annual general shareholders' meeting season in June 2022, shareholders made 330 proposals against 97 companies (in the previous year, there were 187 proposals against 65 companies). The number of companies that had to deal with shareholder proposals was at an all-time high, with a particularly large increase in shareholder proposals from institutional investors, including activists. Since these shareholder proposals cover a wide range of topics, including, among others, those related to corporate governance such as appointment and dismissal of directors, those seeking shareholder return, and those seeking ESG-related responses, and different types of activists (such as whether they are long-term investors or event-driven investors), responding to these shareholder proposals is not a straightforward process. Japanese listed companies are being challenged on how to