Japan’s Financial Services Agency (FSA) has published draft revisions to the country’s stewardship code aimed at supporting better dialogue between institutional investors and their investee companies. The identities of shareholders who exercise their voting rights via custodians – as many do – are currently masked, making it harder for firms to enter into a constructive dialogue with them. To identify the individuals directing the votes, companies must commission costly surveys, which can take at least two months to complete. To fix this, the draft revisions said that “institutional investors should, in response to requests from investee companies, explain how many shares they own or hold in the company and should disclose in advance a policy on how they will respond to such requests from investee companies”. Another revision to the code aims to encourage collaborative engagements between institutional investors, saying that these are an “important option” and should be considered as a way to contribute to the “sustainable growth of investee companies”. Japan’s stewardship code was initially introduced in 2014. It was subsequently revised in 2017 and 2020. The latest draft revisions are open for consultation until 20 April.
