Only those willing to change will survive following Japan's governance code revision

More emphasis on ROE and sustainability

Japan’s recently revised corporate governance code has the potential to accelerate reforms at some of the nation’s top businesses and could lead to an overall increase in the value of Japanese companies, benefitting investors.

However, it also poses challenges for companies that are not prepared. The latest version of the code came into force in June 2021. It is an updated version of the code first brought in by Prime Minister Shinzo Abe in 2015, as part of his ‘Abenomics' strategy. This latest revision revolves around three key issues: improving board independence, protecting minority shareholders and sustainability. To improve board independence companies will be required to increase the number of independent external directors. To protect minority shareholders, listed companies with controlling ...