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    ISS-Corporate Forecasts Shareholder Proposals, Capital Efficiency as Themes of 2024 Japan Meeting Season

    TOKYO, Japan (May 28, 2024) – ISS-Corporate, a leading provider of compensation, governance, cyber risk monitoring, and sustainability offerings to help companies improve shareholder value and reduce risk, today released an analysis of anticipated trends and developments for the 2024 Japanese proxy season. The report examines trends in the evolving corporate governance landscape, influenced by shareholder activism and initiatives by regulators and the Tokyo Stock Exchange to attract global investment.

    Key findings and predictions include:

    • Reflecting a maturing corporate governance environment, the volume of shareholder proposals is expected to increase over previous years. In 2023, a record 109 companies received shareholder proposals. Influenced by the success of high-profile activist campaigns in recent years, the report expects an increasing number of investors to challenge companies that have weak governance profiles or poor financial performance, particularly regarding capital allocation. Shareholder proposals targeting dividend policies and share repurchases to enhance capital efficiency increased exponentially over the past ten years, from just six in 2013 to 87 in 2023. Shareholders are also increasingly demanding greater transparency and accountability over pay, the report finds, with proposals focused on compensation-related topics growing to 60 in 2023 from just 17 in 2013.
    • Environmental proposals are becoming more sophisticated, targeting companies and financial institutions with significant carbon footprints within their value chains. Such proposals are increasingly addressing the alignment of business strategies with the Paris Agreement’s objectives, calling for action ranging from enhanced transparency in lobbying activities, the development of clear transition plans, reports on the resilience of assets in the face of climate change, and the integration of environmental targets into executive compensation structures.
    • Domestic asset managers are moving towards quantitative voting policies that prioritize capital efficiency, the report finds. The Tokyo Stock Exchange is also advocating improved disclosure of capital cost management, having published in January 2024 a list of companies that disclosed their management of capital costs.
    • Companies falling short in strategic alignment and transparency, particularly in corporate finance and decarbonization initiatives, may encounter increased investor scrutiny. Investors are increasingly demanding comprehensive disclosure and commitment to long-term value creation.

    “The corporate governance landscape in Japan has matured considerably over the years, and the call for greater capital efficiency is becoming ever louder,“ said Jun Frank, Managing Director at ISS-Corporate. “Those who fall behind could face not only greater investor scrutiny over their capital allocation and sustainability strategies but also motions to challenge the board over these issues this proxy season.”

    Read ISS-Corporate’s full analysis here.

    ISS-Corporate is a leading provider of robust SaaS and expert advisory services to companies, globally. ISS-Corporate’s datadriven, research-backed Compass platform empowers businesses to understand and shape the signals they send to institutional investors, regulators, lenders, and other key stakeholders. By delivering essential data, tools, and advisory services, ISS-Corporate can help businesses around the world to be more resilient, align with market demands, and proactively manage governance, compensation, sustainability, and cyber risk initiatives. ISS Corporate Solutions, Inc. (“ISSCorporate”) is a wholly owned subsidiary of Institutional Shareholder Services Inc. (“ISS”) and part of the ISS STOXX GmbH group of companies. ISS-Corporate provides advisory services, analytical tools and publications to companies to enable them to improve shareholder value and reduce risk through the adoption of improved corporate governance practices. The ISS STOXX Governance and ESG research teams, which are separate from ISS-Corporate, will not give preferential treatment to, and are under no obligation to support, any proxy proposal of a corporate issuer nor provide a favorable rating, assessment, and/or any other favorable results to a corporate issuer (whether or not that corporate issuer has purchased products or services from ISS Corporate). No statement from an employee of ISS-Corporate should be construed as a guarantee that ISS FOR IMMEDIATE RELEASE STOXX will recommend that its clients vote in favor of any particular proxy proposal or provide a favorable rating, assessment or other favorable result. For more information, please visit https://www.iss-corporate.com

    ISS STOXX GmbH, through its group companies, is a leading provider of comprehensive and data-centric research and technology solutions that help capital market participants identify investment opportunities, detect qualitative and quantitative portfolio company risks, and meet evolving regulatory requirements. With roots dating back to 1985, we today deliver world-class benchmark and custom indices across asset classes and geographies and serve as a premier source of independent corporate governance, sustainability, cyber risk, and fund intelligence research, data, and related offerings. Our products and services give clients the scale and leverage they need to grow their business more effectively and efficiently. ISS STOXX, which is majority owned by Deutsche Börse Group, is comprised of more than 3,800 professionals operating across 30 global locations in 20 countries. Its approximately 5,500 clients include many of the world’s leading institutional investors who turn to ISS STOXX for its objective and varied offerings, as well as companies focused on ESG, cyber, and governance risk mitigation as a shareholder value enhancing measure. Clients rely on ISS STOXX’s expertise to help them make informed decisions to benefit their stakeholders.