日本取締役協会

ICGN is a membership body, led by investors from all over the world, with over $90 trillion of AUM. Our members are asset owners, like pension schemes and sovereign wealth funds, asset managers and also various service providers and corporates who are involved in the governance and stewardship ecosystem. Our purpose is to promote the highest standards of corporate governance and investor stewardship worldwide.

The ICGN's 30th Anniversary Conference - Asia, held in Tokyo on 4 and 5 March 2025, was a significant event that brought together international leaders in corporate governance and investor stewardship. The conference addressed the impact of corporate governance and investor stewardship reforms in the region, offering participants the opportunity to hear from experts from Japan and around the world, and consider how companies, global investors, and stakeholders can best work together in pursuit of sustainable long-term value creation.

Progress in governance reform in Japan

We chose Tokyo for this important event because it is a critically important market in the region for investors, both from across Asia and around the world. Over the past decade, Japan has made significant strides in corporate governance reform, driven by a series of initiatives aimed at enhancing transparency, accountability, and sustainable growth.

In addition to the Tokyo Stock Exchange's push for companies to implement management practices that are conscious of the cost of capital and stock price, the conference explored the appointment of independent directors and the establishment of nomination and compensation committees which have strengthened board oversight. We acknowledged that improvements have already resulted in a notable increase in Return on Equity and positively impacted stock prices, demonstrating clear impact on shareholder value creation.

Another big highlight was the momentum on plans to bring the disclosure of the Yuho forward, ahead of AGMs, to allow the information flow and stewardship process to work more effectively. This reform is seen as a crucial step in enhancing transparency and accountability in corporate governance.

This is great to see, and ICGN looks forward to continuing our work in Japan to support the ongoing efforts to promote sustainable growth and improve long-term value for companies as we all work together to continue to drive corporate governance reform.

The need for reliable reporting.

Another important theme was the adoption of the ISSB global baseline standards. The conference emphasized the importance of providing consistent and comparable financially material information to investors to aid their investment decisions. The adoption of these standards is expected to help investors make more informed decisions and contribute to the overall stability of the financial markets. It is also very positive to see the work of the Japan Sustainability Standards Board in this area.

"G is Key"

The ultimate goal of corporate governance, as underscored by the panellists across the event, is to enhance long-term corporate value. One very interesting panel discussion delved into the essential elements for creating strong and effective corporate boards. The discussion highlighted the importance of balancing skills, diversity, and experience to achieve board effectiveness. Panellists, including experts in board evaluations, directorship, and investor engagement, acknowledged the progress made in Japan regarding board independence but emphasized that meeting numerical targets alone does not guarantee effectiveness. They stressed the need for substantive contributions from directors, the pivotal role of the board chair in fostering open dialogue, and the value of board evaluations for continuous improvement. Investors were recognized for their crucial role in driving governance improvements through active engagement.

Enhancements to Stewardship Codes and Practices

From a stewardship perspective, there were also a number of key areas of focus. In Japan and in the UK, 2025 will bring new stewardship Codes and there is a lot of interest in how best practices will continue to develop. One area of increasing importance is the role of investors in engaging with policy makers, governments and standard setters. These system-wide levers of change can have a great impact on driving positive, market-wide improvements that benefit all market participants. That's why in 2024, the ICGN Stewardship Principles added a new focus on the importance of policy engagement and advocacy, recognizing it as a crucial lever of change. The conference emphasized the need for thoughtful and purposeful engagement with policymakers to protect and enhance value for investors and stakeholders.

Artificial Intelligence is a key consideration

Artificial Intelligence (AI) was a hot topic at the conference. AI is seen as a tool with the potential to enhance efficiency, strengthen processes, and promote industrial competitiveness and growth. However, AI governance is complex and needs to be tailored to the specific circumstances of the company, its AI use cases, and governance structures. Robust risk management frameworks and the involvement of experts from various fields are critical. The importance of human oversight in AI applications was emphasized to ensure ethical and responsible use of the technology. Investing in human capital to support AI initiatives is crucial for maximizing the benefits of AI and ensuring its successful integration into business operations. A multidisciplinary approach to AI governance is essential, involving various departments such as HR, legal, and IT. Participants agreed that Board members need to stay informed about AI developments and integrate AI into corporate strategies.

Shareholder rights are critical

One of ICGN's key focus areas is protecting shareholder rights. That is because we believe that protecting shareholder rights is crucial for maintaining trust in capital markets and promoting sound corporate governance. At the event, we heard from experts from corporate management, asset management, and law who discussed the importance of shareholder rights, the role of Annual General Meetings (AGMs), and evolving challenges in shareholder engagement. AGMs are vital for transparency and accountability, providing a platform for shareholders to voice concerns and vote on key matters. While digital tools enhance engagement, the panel cautioned against "virtual only AGMs" due to risks in limiting debate and transparency. Hybrid meetings are considered best practice. We also heard about the importance of legal mechanisms and shareholder litigation in protecting rights and ensuring corporate accountability.

Overall, the ICGN's 30th Anniversary Conference - Asia provided a platform for meaningful dialogue between investors, companies, and policymakers. The discussions at the conference underscored the importance of corporate governance reform, the adoption of global standards, and the need for policy engagement and advocacy to drive positive change in the region.

ICGN and our members were very grateful to the Tokyo Stock Exchange for hosting the events and to the Financial Services Agency Japan and the Ministry of Economy Trade and Industry (METI) for their endorsement of this event and to all of the sponsors who helped make it possible.

We will be back in Tokyo later this year, to bring members together to connect and share ideas and perspectives as well as to continue our work in engaging with policy makers and regulators. We are also already planning a 2026 forum, so we hope to see you all there!

Jen Sisson
Jen is the CEO of the International Corporate Governance Network (ICGN). Led by investors with AUM of $US 77 trillion, ICGN advances the highest standards of corporate governance and investor stewardship. Jen represents ICGN on the Japanese Financial Services Agency's Council of Experts and on the IFIAR stakeholder working group.
Previously EMEA Head of Stewardship for Goldman Sachs Asset Management and Deputy Director for Stakeholder Engagement and Corporate Affairs at the UK Financial Reporting Council, Jen holds a BA in Business, Accounting and Finance from the University of Newcastle and a Masters in Sustainability Leadership from the University of Cambridge.