All Japan Program Multimedia

Changing Corporate Governance in Japan


Video and transcript from the event "Changing Corporate Governance in Japan" with Takeo Hoshi (Stanford University), Masaaki (Masa) Tanaka (Mitsubishi UFJ Financial Group, Inc. (MUFG)), and Kazuhiko Toyama (Industrial Growth Platform, Inc.).

Enhancing corporate governance has been an emphasis in Abenomics economic reform. The Stewardship Code established in 2014 has defined principles that institutional investors should follow to enhance the long-term investment return for their beneficiaries. The institutional investors are now expected to engage "constructively" with the investee companies to increase the corporate value, including discussion on corporate governance changes. Another related development in 2014 was the introduction of JPX Nikkei Index 400, which is a new stock price index calculated from the stock prices of 400 companies with "high appeal to investors." Following this, many Japanese companies started to improve their corporate governance and accounting practices to increase their chances to be among the 400 companies. Now the Corporate Governance Code, which defines principles for effective corporate governance, is being developed, adding another impetus for Japanese companies to change. The Japan Program invites two business leaders in Japan who have been leading the change. Kazuhiko Toyama was a member of the committee that drafted the Corporate Governance Code. Masaaki Tanaka has been pushing the corporate governance reform at MUFG, the largest financial institution in Japan.