The Ministry of Economy, Trade and Industry and the Financial Services Agency, among others, have successively released important documents on corporate governance, fueling debate over the balance between shareholder returns and growth investment by Japanese companies.
In recent years, Japanese companies have increasingly pursued shareholder returns, including share buybacks, and Japan has seen greater growth in shareholder returns than the United States and Europe. Combined dividends and share buybacks have exceeded historical levels, improving capital efficiency, although some observers say they have been less likely to translate into growth investment or higher wages.
Against this backdrop, a series of governance documents were released, including the publication of the revised 2026 Corporate Governance Code and the issuance of growth investment guidance. In addition to the Ministry of Economy, Trade and Industry, the Financial Services Agency, the Tokyo Stock Exchange and the Liberal Democratic Party also released related documents.
The revision to the Corporate Governance Code released by the Financial Services Agency and the Tokyo Stock Exchange on 21 July, together with the growth investment guidance issued by the Ministry of Economy, Trade and Industry around the same time, was positioned as a policy aimed at achieving sustained increases in corporate value. On the 30th, key points and Q&A materials on the code of conduct were released, marking a milestone in corporate governance reform.
On the 29th, the LDP Policy Research Council announced the establishment of a policy team proposing growth-oriented corporate governance reforms, creating momentum for reforms designed to increase corporate value.