“Study Group on Corporate Governance toward the Enhancement of Earning Power” to be Launched

1. Background

METI has been working on corporate governance reform for Japanese companies, including strengthening their monitoring functions through the appointment of outside directors and also enhancing executive functions, with the aim of achieving sustainable growth and improving the mid- to long-term corporate value of companies. As a result, many companies have demonstrated concrete achievements, including the appointment of outside directors and progress made in establishing a nomination committee and a compensation committee.

Going forward, METI considers it important to hold discussions on further efforts to be taken by Japanese companies that will lead to the enhancement of their earning power while taking into consideration how their efforts to date have contributed to the enhancement of their earning power. For example, in addition to complying with laws and regulations and the Corporate Governance Code, companies should also fully discuss their own ideal corporate governance from the viewpoint of strengthening their earning power, and then incorporate the discussion results into reviews of their systems and operations in terms of conducting the ideal corporate governance.

In addition to the efforts involving corporate governance mentioned above, METI also considers it necessary to hold deliberations on the revision of the Companies Act, as a foundation on which companies develop their activities, from the viewpoint of the sustainable growth of companies and the improvement of their mid- to long-term corporate value.

Based on awareness of this problem, METI decided to launch a Study Group on Corporate Governance toward the Enhancement of Earning Power. The study group aims to hold discussions on approaches that Japanese companies should take in advancing corporate governance reform to enhance their earning power and deliberations on the future direction of revising the Companies Act.

2. The study group’s efforts

The study group will focus on approaches that Japanese companies should take in advancing corporate governance reform and hold discussions on ideas and methods necessary for such companies to conduct corporate governance reform to enhance their earning power in addition to deliberations on measures for encouraging Japanese companies to push forward corporate governance reform. Moreover, it will focus on the revision of the Companies Act and hold deliberations on the points of discussion and the possible direction of revising the Act.

3. Future schedule

The study group will hold its first meeting as below:
First meeting: Wednesday, September 18, 2024; from 10:00 a.m. to 12:00 p.m. (The meeting will be held in private, but a summary of the minutes will be published on the website at a later date.)

4. List of members

• For details, check this list here. (in Japanese)(PDF:116KB)

Division in Charge

Corporate System Division, Economic and Industrial Policy Bureau