Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

Independent Leading Corporate Governance Research

Metrical Inc

METRICAL INC. is an independent leading Corporate Governance research firm in Japan where Corporate Governance is increasingly recognized as an important element on corporate management in these days. Thus, CG research and solutions would become an essential component of global capital markets and play important to contribute to transparency of the markets and maximize shareholders’ value in Japan. 

METRICAL INC. provides Corporate Governance research and analysis including rating services, and  also offers investment research and IR services with solutions and customized profound research on CG and IR issues.

<ul>
<li>It can be said that companies that do not specify cash allocation and only execute shareholder return, thus encouraging shareholders to find and invest in reinvestment targets on their own.</li>
<li>Since the stock valuations of companies as a whole haven't increased, investment capital has gone to a few companies with high profitability, raising gap between profitability and valuations among companies. </li>
<li>If the information asymmetry between management and investors could be bridged, even changes in the capital structure could have an impact on stock prices.</li>
</ul>


It can be said that companies that do not specify cash allocation and only execute shareholder return, thus encouraging shareholders to find and invest in reinvestment targets on their own.
Since the stock valuations of companies as a whole haven't increased, investment capital has gone to a few companies with high profitability, raising gap between profitability and valuations among companies. 
If the information asymmetry between management and investors could be bridged, even changes in the capital structure could have an impact on stock prices.


Simply Returning Profits to Shareholders Will Increase Gap in Valuations Among Companies

<ul>
<li>I believe the change in TOPIX float calculation criteria had significant impact on the pace of reductions last year. It's necessary to pay attention to whether the pace will continue.</li>
<li>"Deemed shares held" are shares contributed to the retirement benefit trust, and the company retains the right to direct the voting rights. Remember that cross-held shares exist here as well.</li>
<li>I would like listed companies to settle the issue of policy shareholdings as soon as possible and focus on how to raise profit margins, which is the biggest issue.</li>
</ul>


I believe the change in TOPIX float calculation criteria had significant impact on the pace of reductions last year. It's necessary to pay attention to whether the pace will continue.
"Deemed shares held" are shares contributed to the retirement benefit trust, and the company retains the right to direct the voting rights. Remember that cross-held shares exist here as well.
I would like listed companies to settle the issue of policy shareholdings as soon as possible and focus on how to raise profit margins, which is the biggest issue.


Don't Forget to Check for Deemed Shares Even if a Company Have Reduced Its Policy Shareholdings

<ul>
<li>Only a while ago, there was debate in ESG Investing about "how effective ESG factors are in performance," and rather skeptical viewpoint prevailed among investors. Where have these debates gone?</li>
<li>Since there is serious shortage of human resources of ESG analysts, the FSA is expected to take a certain amount of time to monitor the systems of investment management companies.</li>
<li>FSA will strengthen its monitoring ESG wash to ensure that there are no misstatements in the reports as listed companies will be required to include sustainability in their securities reports.</li>
</ul>


Only a while ago, there was debate in ESG Investing about "how effective ESG factors are in performance," and rather skeptical viewpoint prevailed among investors. Where have these debates gone?
Since there is serious shortage of human resources of ESG analysts, the FSA is expected to take a certain amount of time to monitor the systems of investment management companies.
FSA will strengthen its monitoring ESG wash to ensure that there are no misstatements in the reports as listed companies will be required to include sustainability in their securities reports.


Tighter ESG-Wash Monitoring Will Follow the New Securities Report Disclosure Rule in in 2 Years?

<ul>
<li>I would like to discuss about the Nikkei article, "Shareholder Proposal 'Withdrawn,' Share Price Firm; Dialogue Leads to Compromise."</li>
<li>Regarding "share prices of companies whose shareholder proposals are withdrawn are firm during sharp sell-off," there seems little proof of causal relationship between withdrawal of shareholder proposals and stock performance.</li>
<li>Although Japanese corporate culture has tradition of doing everything without making a fuss, Japanese managers need to have serious discussion with shareholders on the balance between growth and shareholder returns.</li>
</ul>


I would like to discuss about the Nikkei article, "Shareholder Proposal 'Withdrawn,' Share Price Firm; Dialogue Leads to Compromise."
Regarding "share prices of companies whose shareholder proposals are withdrawn are firm during sharp sell-off," there seems little proof of causal relationship between withdrawal of shareholder proposals and stock performance.
Although Japanese corporate culture has tradition of doing everything without making a fuss, Japanese managers need to have serious discussion with shareholders on the balance between growth and shareholder returns.


No Causality Between Shareholder Proposal Withdrawal and Share Price, but Dialogue Is a Good Thing

<ul>
<li>I would like to discuss about the Nikkei article, "More companies disclose skill matrix at June shareholder meetings."</li>
<li>On the argument "it is unclear whether it will contribute to improve corporate governance," the key is whether the company is building corporate governance with quality in rapidly changing days.</li>
<li>While it's true that "the content of skill-matrix disclosure varies," I expect that the process of selecting directors will be improved in the future as issues are clarified through disclosure.</li>
</ul>


I would like to discuss about the Nikkei article, "More companies disclose skill matrix at June shareholder meetings."
On the argument "it is unclear whether it will contribute to improve corporate governance," the key is whether the company is building corporate governance with quality in rapidly changing days.
While it's true that "the content of skill-matrix disclosure varies," I expect that the process of selecting directors will be improved in the future as issues are clarified through disclosure.


Skills Matrix Disclosures Give Us the Opportunity to See Through The "Sham Board, Disclosures"

Japan

The TOPIX, also known as the Tokyo Stock Price Index, is a capitalization-weighted index of all companies listed on the First Section of the Tokyo Stock Exchange. The index is supplemented by the subindices of the 33 industry sectors. The index calculation excludes temporary issues and preferred stocks, and has a base value of 100 as of January 4, 1968.

TSE Tokyo Price Index TOPIX (TPX INDEX)

Simply Returning Profits to Shareholders Will Increase Gap in Valuations Among Companies

I will discuss the issue in which Nikkei's tone changed from somewhat one-sided affirmation of share buybacks to suggestion that companies should...

Metrical Inc

Don't Forget to Check for Deemed Shares Even if a Company Have Reduced Its Policy Shareholdings

I would like to discuss about the issues raised on the Nikkei article, "Disclosure of policy shareholdings prior to AGMs expands to 30%."

Metrical Inc

Tighter ESG-Wash Monitoring Will Follow the New Securities Report Disclosure Rule in in 2 Years?

I would like to discuss about the article, "Get tough on ESG for show." Thanks to growing interest in environmental issues and government...

Metrical Inc

Skills Matrix Disclosures Give Us the Opportunity to See Through The "Sham Board, Disclosures"

I would like to discuss about the Nikkei article, "More companies disclose skill matrix at June AGMs but the content of skill matrix disclosure...

Metrical Inc