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METI has Compiled Viewpoints of Institutional Investors concerning Shareholder Meeting Notices

In recent years, triggered by the introduction of Japan’s Stewardship Code, consideration of the corporate governance code, and publication of the Ito Review (*1) and other initiatives, discussions on ideal way of dialogue between enterprises and investors have gained momentum. The Ministry of Economy, Trade and Industry (METI) has conducted a survey on the viewpoints of investors regarding shareholder meeting notices, which are important tool of communication between enterprises and investors, aiming to help Japanese enterprises deepen dialogues and establish better relationships with investors.

METI hopes that the persons in charge of enterprises’ shareholder meetings, disclosures and IR (Investor Relations) will review their own efforts and make them more effective by referring to and utilizing the results of this survey.

1. Outline of the survey

From January to March 2015, The Corporate Reporting Lab (*2), organized by METI, conducted a survey on the points listed below, sending questionnaires to 149 entities from among the institutional investors who announced the acceptance of the Japan's Stewardship Code, except for the pension funds.

  1. Viewpoints concerning the description and contents of shareholder meeting notices
  2. Matters that need to be disclosed in order to determine the priority of and to evaluate each proposal at a shareholder meeting
  3. Important points regarding the methods of delivering shareholder meeting notices
  4. Important points regarding activities based on Japan's Stewardship Code

64 entities responded to the survey. The survey results also contain the viewpoints of global investors overseas, in cooperation of international organizations of investors such as ACGA, ICGN, and Group of Global Investors.

2. The results of the survey

The survey results revealed that the institutional investors tended to focus on the following points regarding provision of information on shareholder meeting proposals and notices.

(1) As for the content, institutional investors place emphasis on information concerning the election of directors and Kansayaku (audit and supervisory board members) and anti-takeover measures over other proposals and information.

(2) As for the media of the provision and disclosure of information for evaluating each proposal, they judge not only based on meeting notices (and business reports) but also information in other media. In addition, depending on the proposals and content, they regard other media such as annual reports as appropriate choices.

(3) As for the information provision methods, they desire the prompt delivery of notices and appropriate responses to their inquiries.

As for activities based on Japan's Stewardship Code, the survey shows the difference between matters whose disclosure is considered more important and matters for which direct explanations by and individual dialogues with corporate managers are considered more important. In particular, as for matters regarding efforts for enhancing corporate value and corporate strategy, the survey shows tendencies seeking explanations and direct dialogue over disclosures such as business reports. As for other items, the survey revealed that disclosure is considered important for a large number of items.

In this context, the Study Group concerning Promoting Dialogue between Companies and Investors for Sustainable Growth hosted by METI compiled a final report in April 2015 and made proposals for (1) improved quality of shareholders’ review of proposals and dialogues by means of timely and appropriate disclosures including appropriate schedules and notices, (2) comprehensive disclosure, and (3) enhancement of information regarding long- and medium-term corporate value. (*3) The request for prompt delivery of proposals and disclosures, making practical use of media other than business reports, and the role-sharing arrangement between dialogues and disclosures, which were sort out in the survey results, can also complement the discussions at the Study Group.

3. Background of the survey

This survey was conducted as one of the projects of the Corporate Reporting Lab. In particular, a Working Group for Analyzing Case Examples of Good Practices was established in 2013, aiming to collect and introduce a broad range of good (or bad) case examples of “shareholder meeting notices and agendas from the viewpoints of institutional investors” and provide information useful for people in enterprises who are involved in practical procedures for holding shareholder meetings and conducting IR. The working group conducted a preliminary survey with selected question items as a pilot project for this survey and released the result in 2014. (*4)

(*1) The final report of the Competitiveness and Incentives for Sustainable Growth: Building Favorable Relationships between Companies and Investors Project, “Ito Review,” chaired by Professor Kunio Ito of the Graduate School of Commerce and Management, Hitotsubashi University and run by METI, was released in August 2014. The report analyzes and makes recommendations with respect to the issues companies face in seeking to increase corporate value and secure sufficient capital for sustainable growth through dialogue with investors.
For further information:
http://www.meti.go.jp/english/press/2014/0806_04.html

(*2) The Corporate Reporting Lab was launched to provide both company managers and investors a common platform to discuss, study and propose methods corporate communication and disclosure that would enhance the value of their companies.. (Secretariat: METI, Business Policy Forum, Japan)
For further information:
http://www.meti.go.jp/policy/economy/keiei_innovation/kigyoukaikei/ (in Japanese)

(*3) “Council of Experts concerning Promoting Dialogue between Companies and Investors for Sustainable Growth” Report:
http://www.meti.go.jp/press/2015/04/20150423002/20150423002.html (in Japanese)

(*4) Details of the 2014 pilot survey:
http://www.meti.go.jp/english/press/2014/0509_01.html

Reference

Details of the survey(PDF:5,046KB) PDF File,(ZIP:4,264KB) other_file Updated on August 25, 2015

Release date

April 24, 2015

Division in Charge

Corporate Accounting, Disclosure and CSR Policy Office, Economic and
Industrial Policy Bureau

Ministry of Economy, Trade and Industry
1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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