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.

Meaningful If "P/B Below 1x" Is a Change of Mindset that Makes Managers Decide to Take an MBO

Fewer TOPIX Remaining Companies Show the Difficulty of Producing Convincing Disclosures

Valuations Will Rise when the Management Changes To "Maximizing Shareholder Interest"

Few Companies Include ROE and ROIC as KPIs in Their Mid-Term Management Plans

Overseas Investor Engagement Plays a Significant Role in Substantive Governance Enhancements

The Problem Is that Many Managers Know that ROE Is Below Cost of Capital but Are Not Taking Action

Managers Should Consider That "TSE's Request" Has Changed the Rules of the Game

Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

<ul>
<li>Considering that about half of the listed companies had P/Bs below 1x, the fact that 13% of the companies that published medium-term management plans mentioned P/Bs is too small.</li>
<li>More companies should mention ROE in mid-term business plans, but the reason they don't is because they recognize that the company isn't generating return that exceeds its cost of capital.</li>
<li>While P/B is rising due to rising stock prices, foreign ownership is increasing. In exchange, managers must realize that they need to develop measures for sustainable expansion of corporate value.</li>
</ul>


Considering that about half of the listed companies had P/Bs below 1x, the fact that 13% of the companies that published medium-term management plans mentioned P/Bs is too small.
More companies should mention ROE in mid-term business plans, but the reason they don't is because they recognize that the company isn't generating return that exceeds its cost of capital.
While P/B is rising due to rising stock prices, foreign ownership is increasing. In exchange, managers must realize that they need to develop measures for sustainable expansion of corporate value.


Why Do Only 13% of Companies Mention P/B in Mid-Term Management Plans While Half Had P/Bs Below 1x?

TSE Tokyo Price Index TOPIX

Why Do Only 13% of Companies Mention P/B in Mid-Term Management Plans While Half Had P/Bs Below 1x?