Japanese CEOs get new excuse to stop stock-picking

TBS Holdings

08/06/2018 03:24

(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own.)
    By Quentin Webb
    HONG KONG, June 8 (Reuters Breakingviews) - An updated
governance code tells boards to run cost-benefit analyses on
holding stakes in other listed companies. It’s too much to hope
this alone will catalyse disposals and buybacks. But it could
help shareholders, such as those at broadcaster TBS, make a case
for streamlining.
 
    Full view will be published shortly.
    On Twitter https://twitter.com/qtwebb
    
    CONTEXT NEWS
    - Japanese boards will have to review shareholdings in other
companies annually, under a new version of the country’s
corporate governance code released by the Tokyo Stock Exchange
on June 1. Directors need to assess if “the purpose is
appropriate and whether the benefits and risks from each holding
cover the company’s cost of capital”, and publish the results of
their analyses.
    - The original code was published in 2015, as part of an
official push to make Japanese companies better run and more
profitable. Among other changes, the revision also builds on an
earlier requirement for board diversity by saying this should
cover “gender and international experience.”
    - One high-profile dispute about cross-shareholdings could
soon come to a head. Investors in Tokyo Broadcasting System
Holdings will vote in June on a proposal from 1.7 percent
shareholder Asset Value Investors, which wants the company to
sell 40 percent of its holding in Tokyo Electron, a maker of
semiconductor-manufacturing equipment.
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    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
BREAKINGVIEWS - Activist broadcasts Japanese governance weak
spot     urn:newsml:reuters.com:*:nL4N1N007V
Tokyo Broadcasting sets June vote on activist proposal to cut
crossholdings     urn:newsml:reuters.com:*:nL3N1T22ER
JPX statement    http://www.jpx.co.jp/english/news/1020/20180601.html
Revised corporate governance code    http://www.jpx.co.jp/english/news/1020/b5b4pj000000jvxr-att/20180602_en.pdf
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Editing by Jeffrey Goldfarb and Katrina Hamlin)
 ((quentin.webb@thomsonreuters.com; Reuters
Messaging:quentin.webb.thomsonreuters.com@reuters.net))