Amid debate over a proposed amendment to the Companies Act, calls have emerged for stricter rules on activist shareholder proposals. Koji Nagai, chairman of Nomura Holdings, explained the background, while the government considers reviewing the framework.
Amid debate over corporate governance in Japan, a proposed amendment to the Companies Act that would tighten the rules on shareholder proposals is under consideration. Based on experts’ observations, the proposal is intended to address the current situation in which activists are more likely to gather in Japan’s market than in other countries.
Koji Nagai, chairman of Nomura Holdings, explained the background by discussing the enactment of the Corporate Governance Code and the process of subsequent improvements. The view was presented that corporate governance has been strengthened since the Code was introduced, affecting how overseas investors assess Japanese companies.
The requirements for shareholder proposals are a focus of the discussion, including whether the requirements should be relaxed and whether rules governing their operation should be developed. This could also affect movements in capital policy and the development of board structures, including the treatment of special-resolution requirements at general meetings of shareholders.
The situation now awaits further developments as the government moves toward a formal policy decision and the details of the bill become clearer. Market participants are closely watching the bill’s progress and how companies respond.