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>I discussed the points of the Nikkei article on the prime market created by the TSE's market reorganization.</li>
<li>Looking at the prime market as a whole, it is not significantly different from the TSE 1st Section. However, there were aspects where individual companies made progress in their efforts.</li>
<li>Since prime market has companies with small market capitalizations and depressed valuations, it is desirable to discuss increasing the quality companies that enhance profitability, growth potential and corporate governance.</li>
</ul>


I discussed the points of the Nikkei article on the prime market created by the TSE's market reorganization.
Looking at the prime market as a whole, it is not significantly different from the TSE 1st Section. However, there were aspects where individual companies made progress in their efforts.
Since prime market has companies with small market capitalizations and depressed valuations, it is desirable to discuss increasing the quality companies that enhance profitability, growth potential and corporate governance.


<ul>
<li>A data showed that "the percentage of employees who feel fulfilled at work is 56% in Japan, 10 ppt below the global average," indicating the lower motivation of Japanese employees.</li>
<li>Another survey showed that companies with more employees who feel happiness through their work increased sales more than companies with fewer employees who feel happiness</li>
<li>The disclosure of "human capital," which is now the focus of attention, should trigger a shift in management from focus on cost competition to focus on creating high value-added businesses.</li>
</ul>


A data showed that "the percentage of employees who feel fulfilled at work is 56% in Japan, 10 ppt below the global average," indicating the lower motivation of Japanese employees.
Another survey showed that companies with more employees who feel happiness through their work increased sales more than companies with fewer employees who feel happiness
The disclosure of "human capital," which is now the focus of attention, should trigger a shift in management from focus on cost competition to focus on creating high value-added businesses.


<ul>
<li>I would like to discuss the Nikkei article, "FSA surveyed 37 asset management companies offering ESG-related investment trusts and found that 40% of them have no ESG professionals."</li>
<li>If it's impossible to have a ESG professional, and if a fund called ESG fund is set up because of revenue needs, then perhaps the fees need to be reviewed.</li>
<li>As for ESG wash, since ESG is scheduled to be included in annual securities reports from FY2023, ESG wash of the issuing company is expected to become an issue.</li>
</ul>


I would like to discuss the Nikkei article, "FSA surveyed 37 asset management companies offering ESG-related investment trusts and found that 40% of them have no ESG professionals."
If it's impossible to have a ESG professional, and if a fund called ESG fund is set up because of revenue needs, then perhaps the fees need to be reviewed.
As for ESG wash, since ESG is scheduled to be included in annual securities reports from FY2023, ESG wash of the issuing company is expected to become an issue.


About an Article on Strengthening ESG Fund Monitoring

<ul>
<li>I would like to discuss the Nikkei article, "An increasing number of companies are disclosing their skill matrices, but few explain why those skills are needed by the company."</li>
<li>The reason for the rapid increase in the number of companies disclosing skill matrices over the last year is the addition of Supplemental Principle 4-11-IV in revised Corporate Governance Code.</li>
<li>METI and other in hiring of independent directors, there is a tendency for boards of directors to be composed of individuals who are aligned with the wishes of the president.</li>
</ul>


I would like to discuss the Nikkei article, "An increasing number of companies are disclosing their skill matrices, but few explain why those skills are needed by the company."
The reason for the rapid increase in the number of companies disclosing skill matrices over the last year is the addition of Supplemental Principle 4-11-IV in revised Corporate Governance Code.
METI and other in hiring of independent directors, there is a tendency for boards of directors to be composed of individuals who are aligned with the wishes of the president.


<ul>
<li>I have considered the Nikkei article on "FSA to create 'Code of Conduct' for Institutions evaluating corporate ESG Initiatives by the end of 2022."</li>
<li>FSA will align itself with the moves of regulators around the world who believe that ESG evaluation has become more influential in the market as ESG investing is expanding globally.</li>
<li>Since IOSCO has already set forth specific disclosure items related to ESG evaluation, the FSA will compile these items in a future Council meeting going forward.</li>
</ul>


I have considered the Nikkei article on "FSA to create 'Code of Conduct' for Institutions evaluating corporate ESG Initiatives by the end of 2022."
FSA will align itself with the moves of regulators around the world who believe that ESG evaluation has become more influential in the market as ESG investing is expanding globally.
Since IOSCO has already set forth specific disclosure items related to ESG evaluation, the FSA will compile these items in a future Council meeting going forward.


Japan's Governance: About an Article on the ESG Code of Conduct

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)

About an Article on TSE Reorganization

I would like to discuss the points of the Nikkei article on the prime market created by the TSE's market reorganization.

Metrical Inc

About an Article on Job Satisfaction

I would like to discuss the Nikkei article, "While the working environment in Japanese companies is improving, job satisfaction in their work, is...

Metrical Inc

About an Article on Strengthening ESG Fund Monitoring

I would like to discuss the Nikkei article, "FSA surveyed 37 asset management companies offering ESG-related investment trusts and found that 40%...

Metrical Inc

About an Article on the Skills Matrix

I would like to discuss the Nikkei article, "An increasing number of companies are disclosing their skill matrices, but few explain why those...

Metrical Inc

Japan's Governance: About an Article on the ESG Code of Conduct

I would like to discuss the issue on the Nikkei article on "FSA to create 'Code of Conduct' for Institutions evaluating corporate ESG Initiatives...

Metrical Inc