F&C is leading a number of worldwide asset managers in the fight to address the "poor governance practices" of many Japanese companies.
A long term critic of the Japanese boardroom, F&C recently co-authored the Japan White Paper, aimed at tackling a corporate culture which is failing its shareholders.
Written with Hermes Fund Managers and published by the Asian Corporate Governance Association, F&C says sound corporate governance is vital to ensure the longer-term growth of the Japanese economy and its capital markets.
F&C pinpointed three main Japanese governance concerns:
- Lack of adequate corporate strategy supervision
- Insulation of management from the discipline of the market
- Failure to provide the returns necessary to protect Japan’s pension system
The Japan White Paper is endorsed by Aberdeen Asset Management, British Columbia Investment Management Corporation, RAILPEN Investments, PGGM and the California Public Employees’ Retirement System.
Key recommendations include:
- Recognition of shareholders as owners of listed companies
- More efficient use of capital
- Independent management supervision
- Pre-emption rights and third-party share placements
- Poison pill takeover defences
- Fairness and transparency in shareholder voting
“While a number of leading companies in Japan have made strides in corporate governance in recent years, we believe that the system of governance in most listed companies is failing its shareholders, its broader stakeholders and indeed the nation at large,” F&C says.
“F&C considers these issues particularly crucial because they impact the fundamental strength, stability and investment attractiveness of the companies in which it invests.
“We have written the Japan White Paper with a view to making a constructive and supportive contribution to corporate governance in Japan, and look forward to engaging in dialogue with Japanese companies on the issues the paper raises.”IFAonline
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