Category: Governance
Plans to update the Japanese Corporate Governance Code focus on sustainability, but Japanese firms already have a high rate of sustainability reportin… Plans to update the Japanese Corporate Governance Code focus on sustainability, but Japanese firms already have a h… Plans to update the Japanese Corporate Governance Code focus on sustainability, but Japanese firms already have a high rate of sustainability reporting. The opposite is true for biodiversity though, argues Planet Tracker’s François Mosnier
Apr 16th, 2021
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The Japanese Corporate Governance Code, published jointly by the Japanese Financial Services Agency (FSA) and the Tokyo Stock Exchange (TSE), entered into force in July 2015. It offers fundamental principles for effective governance of listed companies in Japan. Rather than being mandatory, the provisions in the rules relating to the Code apply on a ‘comply or explain’ basis. This month, a revision to the Code has been proposed by a council of experts, focusing on three main points:
- Enhancing board independence (including by a proposed increase in the number of independent directors from at least two to at least one-third of the board)
- Promoting diversity
- Attention to sustainability and ESG.
Within sustainability, the main addition is the introduction of the two following principles:
“The board should develop a basic[1] p…