Japan’s retail investors are paying closer attention to corporate governance, citing it as a key consideration when investing in stocks, a survey by U.S. ranking and research firm J.D. Power shows.

Shareholder rights, timely disclosure, board oversight and cooperation with a wide range of stakeholders made up about 40% of the issues that stockholders care about, found the survey of 6,088 investors conducted in March.

"That weight was higher than we had expected,” said Kiichi Umezawa, J.D. Power Japan’s managing director.

"It indicates strong interest in ESG, particularly among the younger generation,” he said, referring to "environment, social and governance."

The government, and the Tokyo Stock Exchange in particular, have been pushing for better governance among the country’s 3.7 million companies, betting that more accountability will lead to more investment activity. The poll by J.D. Power suggests that retail investors are also increasingly aware of the need to hold corporate boards and executives to high standards.

That may come as a surprise considering that individual investors in Japan have a reputation for making big contrarian bets in markets like equities and currencies.

The researcher polled individual shareholders who owned stock for at least a year in major automakers, banks, securities brokerages and insurers.

Carmakers saw the biggest gaps in terms of investor satisfaction, with Toyota Motor topping the list among five automakers that had enough of an investor sample size. Honda Motor ranked second, while Nissan Motor and Mitsubishi Motors were almost tied for worst. Investors cited low profitability and shareholder return as the main reason behind the low ranking, according to Umezawa.

In three other surveyed sectors, the gap between companies was smaller. Their satisfaction was generally tied to stock performance over the past year except for brokerages.

Among banks, Sumitomo Mitsui Financial Group won the top spot, while Japan Post Bank was ranked worst among five institutions. As for brokerages, SBI Holdings was No. 1 ranked, while Nomura Holdings was the lowest among six firms, despite its stock making hefty gains over the past year.

Among insurers, investors were the most satisfied with Tokio Marine Holdings and the least with Japan Post Insurance. The survey didn’t include Sompo Holdings, which was recently embroiled in a scandal involving fraudulent insurance claims, because the sample size was too small.

J.D. Power plans to conduct a retail shareholder satisfaction survey annually.

"There has been little data-based discussion on corporate governance, making it difficult to make comparisons and limiting incentive for each company to compete,” Umezawa said. "We hope this survey will help promote better governance.”