Activist fund asks four Japan firms to mandate board-shareholder dialogue
15/05/2024 04:20
By Makiko Yamazaki
TOKYO, May 15 (Reuters) - A Singapore-based activist
fund is asking four Japanese companies through shareholder
resolutions to make their board members regularly available for
one-on-one meetings with large investors.
The rare proposal by Global ESG Strategy, a fund managed by
Swiss-Asia Financial Services (SAFS), would give investors a
direct line to boards as the country's corporate governance
reform has caused firms to open up more communication with
shareholders.
The shareholder resolutions were sent to industrial
components supplier Nippo 9913.T , cram schools operator With
us 9696.T , conveyors maker NC Holdings 6236.T and Tokyo
Cosmos Electric 6772.T , SAFS' chief investment officer Yasuto
Monden, told Reuters.
Nippo and NC declined to comment. With us and Tokyo Cosmos
said no one was available to comment.
Monden said many Japanese companies now agree to make
available certain board members such as CEO and CFO for
individual meetings, but it's still rare to make all of their
board members available.
"I believe individual meetings with shareholders are
effective in creating a sense of urgency at the board," he said.
"It's hugely important for many board members to talk directly
with shareholders and hear their views."
The proposals call for rules requiring board members to meet
individually if requested by shareholders with 3% or more voting
rights, at least annually for external directors and quarterly
for other directors.
Global ESG Strategy owns 9.9% of Nippo, 17.5% of With us
5.5% of NC and 14.7% of Tokyo Cosmos Electric, in terms of
voting rights.
Japanese regulators see dialogue with shareholders as a key
driver for long-term growth of companies, calling them to engage
in constructive talks with shareholders even outside their
annual shareholder meetings.
"During such dialogue, senior management and directors,
including outside directors, should listen to the views of
shareholders and pay due attention to their interests and
concerns," Japan's corporate governance code says.
There is a lot of room for changes at Japanese companies
that could be triggered by shareholder activism, Monden said.
"And benefits of those would be shared with other shareholders,"
he added.
(Reporting by Makiko Yamazaki; Editing by Christian
Schmollinger)
((Makiko.Yamazaki@thomsonreuters.com; +81-3-4563-2805;))