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>Even if attendance increases somewhat since 92.1% of AGMs in 2022 had less than 100 attendees, the reluctance to hold an online voting AGM due to technical issues isn't reasonable.</li>
<li>With 84.8% of companies having Q&amp;A sessions lasting less than 30 minutes, many companies want to end their Q&amp;A sessions in as short a time as possible.</li>
<li>Companies that want to keep Q&amp;A sessions short tend to hold hybrid on-site and online sessions that can prioritize questions from on-site attendees and limit questions from online participants.</li>
</ul>


Even if attendance increases somewhat since 92.1% of AGMs in 2022 had less than 100 attendees, the reluctance to hold an online voting AGM due to technical issues isn't reasonable.
With 84.8% of companies having Q&amp;A sessions lasting less than 30 minutes, many companies want to end their Q&amp;A sessions in as short a time as possible.
Companies that want to keep Q&amp;A sessions short tend to hold hybrid on-site and online sessions that can prioritize questions from on-site attendees and limit questions from online participants.


The Format of the AGM Also Reveals a Part of the Company's Attitude Toward Its Shareholders

<ul>
<li>The policy of extending retirement age to 65 is a measure to solve the immediate labor shortage, but it may lack the perspective of a mid-to-long-term human resource utilization strategy.</li>
<li>Since most employees in their 60s are male employees, this may slow down the fading of the traditionally male-centric corporate culture. A more diverse workforce is required.</li>
<li>Although seniors are still a promising market based on demographic composition, from the perspective of creating new value, it’s necessary to have more discussions about creating society that ensures diversity.</li>
</ul>


The policy of extending retirement age to 65 is a measure to solve the immediate labor shortage, but it may lack the perspective of a mid-to-long-term human resource utilization strategy.
Since most employees in their 60s are male employees, this may slow down the fading of the traditionally male-centric corporate culture. A more diverse workforce is required.
Although seniors are still a promising market based on demographic composition, from the perspective of creating new value, it’s necessary to have more discussions about creating society that ensures diversity.


Isn't Long-Term Human Resource Strategy More Necessary than Immediate Solution to Labor Shortage?

<ul>
<li>Nominating Committee's main activity is the selection of individual director candidates, and the Nominating Committee tends to be less involved in issues related to top management appointments, including succession planning.</li>
<li>Although most companies have a majority of independent directors as members of the nominating committee, the nominating committee may in fact be a body that approves top management's proposals.</li>
<li>Companies focus only on prime market listing criteria of "committee establishment and committee member composition" and overlook original intent. The problem is that it's all about achieving the formal criteria.</li>
</ul>


Nominating Committee's main activity is the selection of individual director candidates, and the Nominating Committee tends to be less involved in issues related to top management appointments, including succession planning.
Although most companies have a majority of independent directors as members of the nominating committee, the nominating committee may in fact be a body that approves top management's proposals.
Companies focus only on prime market listing criteria of "committee establishment and committee member composition" and overlook original intent. The problem is that it's all about achieving the formal criteria.


Nominating Committee Also Has Problems Achieving Only Formal Criteria of Corporate Governance Code

<ul>
<li>TSE, which receives listing fees from listed companies, has no choice but to take a negative attitude toward raising listing criteria that would reduce the number of listed companies.</li>
<li>Behind many companies with stagnant P/Bs is the fact that managers lack stock price consciousness and companies with stock price stagnation for years eliminated and continue to be listing.</li>
<li>In Japan, it is expected that industry restructuring, dissolution of parent-subsidiary listings, and going private will further increase through M&amp;As, leading to a shakeout in the Japanese market.</li>
</ul>


TSE, which receives listing fees from listed companies, has no choice but to take a negative attitude toward raising listing criteria that would reduce the number of listed companies.
Behind many companies with stagnant P/Bs is the fact that managers lack stock price consciousness and companies with stock price stagnation for years eliminated and continue to be listing.
In Japan, it is expected that industry restructuring, dissolution of parent-subsidiary listings, and going private will further increase through M&amp;As, leading to a shakeout in the Japanese market.


TSE Should Shift Its Business Model from Growing Number of Listed Companies to Expanding Market Cap

<ul>
<li>Since very few companies disclosed challenges, efforts to resolve them and progress, it’s unlikely that 'gender pay gap' will be disclosed in convincing manner, with this being the only exception.</li>
<li>Japan's Law for the Promotion of Women's Activities does not prohibit gender discrimination and is not legally binding on gender equality, so the wage gap is only an effort target.</li>
<li>While some proactive companies may accelerate their efforts as disclosures reveal gender pay gap, many are likely to move at modest pace to match the pace of those around them.</li>
</ul>


Since very few companies disclosed challenges, efforts to resolve them and progress, it’s unlikely that 'gender pay gap' will be disclosed in convincing manner, with this being the only exception.
Japan's Law for the Promotion of Women's Activities does not prohibit gender discrimination and is not legally binding on gender equality, so the wage gap is only an effort target.
While some proactive companies may accelerate their efforts as disclosures reveal gender pay gap, many are likely to move at modest pace to match the pace of those around them.


How Much Can 'effort Targets' Speed up the Narrowing of the Gender Pay Gap?

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)

The Format of the AGM Also Reveals a Part of the Company's Attitude Toward Its Shareholders

I would like to discuss the issues on the June 11 Nikkei article, "Shareholder meetings far from being fully online: 'Delivery only' exceeds 90%."

Metrical Inc

Isn't Long-Term Human Resource Strategy More Necessary than Immediate Solution to Labor Shortage?

I would like to discuss the issues on the Nikkei article on June 10, "Stock Prices to Change with Employment in the 60s."

Metrical Inc

Nominating Committee Also Has Problems Achieving Only Formal Criteria of Corporate Governance Code

I would like to discuss the June 6 Nikkei article, "Discussion of Succession Planning for Companies Remains 56%, Leaving Challenges for Stable...

Metrical Inc

TSE Should Shift Its Business Model from Growing Number of Listed Companies to Expanding Market Cap

I would like to discuss the issues on the June 5 Nikkei article titled ""Return the undervalued Japan, Embarking on change through P/B reform."

Metrical Inc

How Much Can 'effort Targets' Speed up the Narrowing of the Gender Pay Gap?

I would like to discuss the issues on the 4 June Nikkei article "Disclosure of gender pay gap goes into full swing, with high interest in...

Metrical Inc