Shareholder Activism in Japan – For Better Corporate Governance

Our mission

We will provide legal support to shareholders who are actively taking actions to improve corporate governance of Japanese companies.

Changing the behavior of Japanese companies

It is most desirable that issues can be ameliorated through discussions with managements. The managements, however, may resist if they meet with a proposal that they don’t want to agree with. In that case, the shareholder activist would find it necessary to take some legal actions in order to go ahead.

In the past, taking legal measures in Japan was not a good idea. However, the success of legal action has been significantly increased by the improvement of rules governing mergers and acquisitions.

Contributing to Japan's economic growth

In Japan, economic growth has been low for a long time. Employees’ wages have not increased, and the lives of young people are modest. Japan may be left behind by global economic growth.

However, it is true that there are many companies with potential growth in Japan. The problem is the lacking of powerful mindset to exploit such potential. We believe that it is necessary for Japanese companies to change their thinking and behavior for improving the wicked situation in Japan.

Recent climate changes

Managements of Japanese companies enjoy peace for long time because the institutional shareholders, such as insurance companies and commercial banks, have been kept silence about their performances. Their companies have been mutually holding other companies’ shares (known as “Mochiai-Kabu”) based on the friendly relationships. In addition, Japanese courts seem to protect Japanese companies from foreign “barbarians” without considering the real economic value of their arguments. As a result, almost attempts of a hostile take over in Japan ended to fail.

Although making many foreign investors disappointed, Japan has slowly began to change. Abe government set a policy to recover the nation’s strong economy. Corresponding to this policy, the Japan stock exchange enacted, as its internal regulation, “Corporate Governance Code” for the listed companies and “Stewardship Code” for the institutional investors.

Victory in the Proxy Fight

In 2019, the CEO of LIXIL, a large housing maker, resigned without clear explanation. He was a professional management who were invited by the founder’s family. The opposition of the …

Funds Activists came to Japan

Considering Japanese companies as a good target because of their higher potentials, so-called “speaking shareholders”(activists), who aggressively take part in company’s management, have come to Japan. The reporting number of …

Japanese Corporation law and Securities Regulations

Shareholder's Rights

Questions in a shareholder meeting

The Corporation Law admits shareholders to ask questions in the shareholder meeting. If directors refused to answer, it would be cause the revocation of the shareholder meeting.

Proposal of agenda

Shareholders are able to propose some agenda for the next shareholder meeting. The shareholders’ proposal must be included in the convincing document at the expense of the company.

Request of the special meeting

Shareholders can request to hold a special shareholder meeting. Court may order to hold if director did not to do it within a reasonable time.

Proxy fight

Shareholders are also allowed to send other shareholders the proxy statements. They can make a different proposal from management and stand their own nominee to the board.