6 - Shareholder Engagement and Voting in Japan

Summary

As one of the solutions to revive its economy that have suffered from stagnation of over two decades from 1991 onwards, the Japanese government has sought to change its stakeholder-oriented corporate governance system into more shareholder-oriented one and has implemented several reforms, including the adoption of the 2014 Japanese Stewardship Code and the 2015 Japanese Corporate Governance Code. As a consequence, shareholder engagement and voting have attracted considerable attention in the corporate governance scene in Japan in recent years. In particular, hedge fund activism and proxy fights are becoming more popular as the activists and the challenging shareholders expect that they would receive more support from domestic institutional investors than they had in the past.After describing the transition of the Japanese corporate governance system and the legal measures granted to shareholders, this chapter analyses the current state of the shareholder meeting and shareholder voting and engagement in Japan.