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No Contrarian Awards For Japan - Until Now ?

Posted on May 31, 2014 at 4:55 PM

Corporate governance may be termed 'for anoraks' by those who know no better and live in a bubble, but it is catching on in the real world.

Even Japan - which does not immediately spring to mind as a place where any sort of challenge or confrontation occurs among publicly listed companies, is changing.

And it is not because the world has suddenly become more concerned with 'governance' or a more ethical place. It is because institutional investors have started to flex their considerable muscle - if you read back through this blog or my contributions at Forbes (you can also just google my name and Forbes) you will find some coverage.

When I saw Michael Woodford - the ex Olympus CEO and whistleblower- early this month for an interview at his London apartment, he was still stunned from his experience of a culture where it was forbidden to speak up. But he was also looking forward to going back to Japan in October for the fifth time, in part now to advise Japanese companies on corporate governance.

In his flat, this - The Contrarian Prize 2013 -one of many awards he has won for his whistleblowing - caught my eye. 

Japan is lucky to have him return. Read this from The Economist. early this month. And I quote from it:

"For now, Japan’s corporate governance lags that of even some emerging economies. In 2013 nearly 600 of the 1,400 or so largest listed Japanese firms still had no outside directors, whereas South Korea, China and India all require them. Companies listed in New York must give over half their board seats to outsiders. In Japan, only a tiny handful have at least three external directors, generally the minimum required to wield real boardroom influence."

It quotes Nicholas Benes, director of the Board Director Training Institute of Japan, who has been fighting a lonely battle on coroporate governance to date, saying that both foreigners and locals are becoming more assertive. "Shareholder proposals and votes signalling disapproval of management or of external directors are becoming more common" The Economist quotes him as saying.

A change of sentiment echoes moves by Prime Minister Shinzo Abe’s Liberal Democratic Party (LDP) to set up a new stewardship code of corporate governance whereby shareholders will be strongly encouraged to monitor firms closely, and speak up when needed.

Yasuhisa Shiozaki is heading the group to steer through a set of reforms. He has an interesting educational background, and one that some might say engenders hope that something good for business - and investors - will evolve. 

Categories: Governance, Investors, Behaviour