Japanese stockholders claim their right to vote in record numbers
TOKYO (majiroxews)– Japanese shareholders have traditionally been a passive breed, content to let the directors of companies manage the enterprises in the way that they think best. This laid-back attitude has been responsible for a number of corporate scandals, including those at Olympus Corporation, where massive losses over several years were covered up, and were exposed in 2011 by British then-CEO Michael Woodford.
However, the times are changing. This year’s crop of shareholders’ annual general meetings – in Japan, many annual general meetings are typically held on the same day – are attracting crowds. Major players, including Toyota, Sony, Japan Tobacco and others are attracting record numbers of shareholders.
Private share ownership is up; according to the Nikkei, nearly 47 million Japanese individuals own stocks. Many of these are older people, retirees who find it easier to attend these meetings than their working counterparts. This figure of 47 million is a record, and coincides with a record low in holdings by banks and insurance companies (28%) – for the fourth straight year these have been in decline. Foreign investors, on the other hand, have been on a buying spree as the result of a perceived recovery in Japan’s fortunes.
But one foreign investor in Japan Tobacco, UK-based The Children’s Investment Fund, found things go the way it wanted when it put forward various “activist shareholder” proposals. The shareholders attending voted against this proposed 150 yen dividend, a buyback of 350 billion yen’s worth of shares, and a cancellation of JT’s holdings of its own shares (the company was proposing a Y68 dividend). The number of shareholders attending the meeting – 2,638 – up dramatically from the 763 of the previous year, partly due to a stock split, and the Japanese government’s selling of some shares.
Overall, Japanese shareholders are taking more interest in the companies whose shares they own. More is on the table than before. For example, Softbank’s dream of becoming a global telecommunications giant, and Sony’s future with regard to its entertainment business are on the table this year. These are major decisions which will affect the future of the companies involved, and which will cause many shareholders to consider their positions.
Though Japanese business culture has a long way to go before it approaches Western ideals of transparency and shareholder power, it does appear that the role of individual Japanese investors is changing, as more and more of them exercise their voting rights at shareholders’ meetings