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Corporate Governance System (CGS) Study Group (Phase 3) Meeting to be Held

November 15, 2021

The CGS Study Group was launched by the Ministry of Economy, Trade and Industry (METI) in 2016 and has been examining corporate governance in Japan. It will establish the CGS Study Group (Phase 3) to examine what governance is needed for companies to achieve medium- to long-term growth in the midst of global competition.

1. Background

Amid recent developments in corporate governance reform, outside directors' and shareholders' monitoring has strengthened and companies are becoming more profitable to some degree, and some are also reworking their business portfolios. On the other hand, investment to achieve medium- to long-term growth has not necessarily increased, and as a result, Japanese companies' positions in the global economy are declining as a whole.

The Corporate Governance Code was revised in June of this year. However, in order for companies to make more investments that will help them achieve medium- to long-term growth and succeed in global competition, they need a structure that will allow management to champion entrepreneurship and “animal spirits” of innovation, as they are sources of corporate growth. They also need stronger executive functions in order to develop effective management strategies and implement them swiftly.

Having identified these problems, the CGS Study Group (Phase 3) will hold meetings to examine issues in corporate governance systems, such as how to develop and implement management strategies that enhance corporate value and how companies aiming to grow in the midst of global competition should think about governance.

2. This study group's efforts

This study group will first examine the differences between forms and levels of governance based on companies' characteristics and measures taken to promote bold entrepreneurial spirit. Then, it will examine concepts such as strengthening corporate executive functions and governance for companies that aim to grow in the midst of global competition, improving the quality and quantity of human resource pools for outside directors, and efforts to carry out fair and just transactions with clients.

3. Future schedule

The study group's first meeting will be held at the date and time below.

First meeting: Nov. 16 (Tue.), 2021, 9:00 a.m. to 11:00 a.m.
(The meeting will be held in private, but a summary of the minutes will be published on the website at a later date.)

*Meetings will be held approximately once a month after the second one and the group will then examine the results, aiming to compile a report and revise the CGS Guidelines by the end of next June.

4. List of members

Division in Charge

Corporate System Division, Economic and Industrial Policy Bureau
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