Shareholders set to push for outside board directors, rewards at meetings

JIJI

Companies are expected to face calls to introduce outside board directors and take measures to reward shareholders, such as dividend hikes, when their general shareholders’ meetings begin in June.

Among companies listed on the Tokyo Stock Exchange, about 55 percent have outside directors. That ratio is expected to rise to about 70 percent after the June meetings, according to Mitsubishi UFJ Trust and Banking Corp., which offers securities transfer agency services for corporate clients.

Behind the expected surge is a plan to amend the company law before the Diet closes for the summer.

According to the revision, listed companies that do not bring in outside directors could be required to explain their reasons for refusing the reform.

If companies without outside directors fail to adopt external director systems at the meetings, they may be grilled by shareholders for not taking the efforts to improve corporate governance more seriously.

Most companies that close their books in March hold their general shareholders’ meetings in June.

Shareholders are increasingly calling for dividend hikes as corporate earnings surge thanks to the yen-weakening, deflation-fighting strategy of Prime Minister Shinzo Abe.