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Follow-up on the Efforts for Achieving the Process for Dialogue-based Shareholder Meetings

Aiming at the promotion of constructive dialogues between enterprises and shareholders/investors, in November 2015, the Ministry of Economy, Trade and Industry (METI) established a Study Group on Promoting Electronification of Processes for Shareholder Meetings (hereinafter referred to as the “study group”). Since then, the study group has been holding discussions to establish a world-class environment for such company-investor dialogues in Japan.

According to the proposals compiled by the study group in April 2016, the study group conducted a follow-up on efforts by listed companies, investors, and dialogue-supporting industries. METI hereby announces the details of the follow-up.

1. Background

To achieve the sustainable growth of companies and mid- to long-term improvement of corporate value, it is indispensable for Japanese companies to enhance constructive dialogues with shareholders and investors.  Meanwhile, the current administrative schedule for annual shareholder meetings held within three months from the closing date of financial accounts is too short to secure the enough period for shareholders/investors to deliberate agenda. This also makes difficult for listed companies to ensure the efficient time for enhancing companies’ information disclosure and audit.

To address this situation, in November 2015, METI established a Study Group on Promoting Electronification of Processes for Shareholder Meetings (chair: Mr. Yasuhiro Osaki, professor, Faculty of Law, Waseda University), and in April 2016, the study group compiled the results of its discussions into a collection of proposals as measures to enhance companies’ information disclosure and secure sufficient time for shareholders to deliberate agenda, toward establishing a world-class environment for promoting dialogue between companies and shareholders/investors. Major details of the proposals are as follows:

  1. Electronic provision of notices of shareholder meeting and other materials
    1. Promoting efforts for the early publication of notices and related materials of shareholder meetings via internet prior to sending them by postal mail
    2. Introducing new rules for electronic provision of materials related to notice of shareholder meetings (including business reports and accounting statements under the Companies Act) in principle
  2. Enhancing an electronic voting process
  3. Setting appropriate schedules related to shareholder meetings (e.g., holding discussions on administrative measures in prescribing a record date of exercising voting rights  different from the closing date of financial accounts).
  4. Expectation  toward the role of  dialogue-supporting industries (e.g., holding discussions on the establishment of an information platform in which shareholders are able to receive shareholder meeting notices and exercise voting rights through a one-stop service).

2. Outline of the follow-up

The study group held meetings for the follow-up of stakeholder efforts according to the compiled proposals above.

Specifically, the study group confirmed the following progress made by stakeholders.

  • An increase in the number of companies that have conducted the early publication of notices of shareholder meetings in Japanese, via internet prior to sending them by postal mail, or the publication of notices in English
    Year-on-year change in the number of companies that have conducted:
    • Early publication of notices of shareholder meetings online: From 769 (32.7%) in June 2015 to 1,605 (68.6%) in June 2016
    • Publication of notices of shareholder meetings in English: From 399 (17.0%) in June 2015 to 634 (27.1%) in June 2016
  • An increase in the number of companies participating in the electronic voting platform
    From 555 at the end of June 2015 to 807 at the end of March 2017
  • Development of environment in which the record date of an exercise of a voting right can easily be prescribed differently from the closing date of financial accounts, which will contribute to relaxing the high degree of concentration of annual shareholder meeting dates as well as ensuring efficient period to deliberate agenda and/or enhance companies’ information disclosure.
    • Having introduced a system that enables companies to file a request for a final return form of corporate tax payment after finishing their annual shareholder meeting file (enforced in April 1, 2017)
    • Publication by “Zenkabukon” of a collection of approaches to change the record date of an exercise of a voting right, including a description example of shareholder meeting agenda for revising the articles of incorporation (October 2016); revision of a series of the Zenkabukon’s Collection of Models Concerning the Articles of Incorporation (February 2017)

METI will continue to expect stakeholders, including listed companies, investors and dialogue-supporting industries, to advance further efforts and discussions to establish a world-class environment for company-investor dialogues in Japan.

Appendix

Related information:

Release date

April 21, 2017

Division in Charge

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

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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