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The CGS (Corporate Governance System) Study Group Meeting will be Held.

More and more companies are endeavoring to develop a proper corporate governance system under which the board of directors responsibly decides business strategies and evaluates business performance, while delegating individual executive decisions to the top management, thereby accelerating procedures for decision making. In light of this trend, the Ministry of Economy, Trade and Industry (METI) is holding the CGS (Corporate Governance System) Study Group Meeting to deliberate policies and other specific matters in an attempt to improve the performance of boards of directors (strengthening its monitoring responsibilities), taking into consideration the existing systems and the practices in Japan.

1. Background

With the progress of globalization of economies and the Fourth Industrial Revolution, which is increasingly changing the business environment and complicating business problems, top management, including CEOs, face stronger pressure to take quick, decisive action to manage discontinuous change.

The Japanese government has been working to develop a framework for corporate governance by amending the Companies Act and establishing Japan’s Stewardship Code and Corporate Governance Code, etc. Each company is now trying to build their own corporate governance system and enhance its effectiveness based on the Act and Codes.

Under such circumstances and in light of the diversification of composition of boards of directors through the introduction of outside directors, more and more companies are endeavoring to develop a proper corporate governance system under which the board of directors responsibly decides business strategies and evaluates business performance while delegating individual executive decisions to the top management, thereby accelerating procedures for decision making.

In order to respond to such company needs, METI will hold the CGS (Corporate Governance System) Study Group Meeting to first compile detailed reports of domestic and overseas related systems and best practices and discuss policies and specific matters for the purpose of enhancing the functions of the board of directors (strengthening its monitoring responsibilities) taking into consideration the existing systems and the practices in Japan.

2. Initiatives by this Study Group

This Study Group Meeting mainly focuses on such themes as (i) roles, rights and powers of the board of directors, (ii) selecting CEOs and succession planning for them, and granting of incentives, (iii) roles as outside directors, and improving the quality and quantity of applicants available of outside directors and (iv) utilization of company with audit and supervisory committee. Relevant domestic and overseas systems and best practices will be compiled and policies and specific matters for the purpose of enhancing functions of the board of directors will be deliberated.

3. Future Schedule

The first and second meetings will be held as follows.

  • 1st meeting: 8:00 to 10:00 on Friday, July 1, 2016 (open to the public)
  • 2nd meeting: 8:00 to 10:00 on Tuesday, July 19, 2016 (closed to the public)

The 3rd and subsequent meetings will be held approximately once a month and a report will be compiled by around February, 2017.

* If you would like to sit in on the 1st meeting, please register in advance from the following webpage.
https://wwws.meti.go.jp/interface/honsho/committee/index.cgi/committee (in Japanese)

Appendix

Release date

June 23, 2016

Division in Charge

Corporate System Division, Economic and Industrial Policy Bureau

Related Information

Ministry of Economy, Trade and Industry1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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