The Tokyo Stock Exchange will create an online system that will allow domestic and overseas investors to exercise their voting rights in Japanese companies, exchange officials said Monday.
The TSE has started talks with other bourses, including the Japan Securities Dealers Association that operates the Jasdaq over-the-counter market, in a bid to launch the system in time for the general shareholders’ meetings most firms will convene in June, they said.
The move comes as an increasing number of institutional investors are making their voices heard by opposing resolutions proposed by firms showing a poor business performance or not paying good dividends.
Because such a system would inform banks, life insurance companies and other institutional investors of voting issues more promptly and accurately than before, “it will help companies improve their corporate governance,” a senior TSE official said.
In a majority of cases, shares held by institutional investors are in the name of the trust banks contracted to manage them, meaning announcements regarding the convening of a shareholders’ meeting are mailed to the investors via the trust banks, giving them less time to closely examine the resolutions to be considered.
More than 2,000 companies listed on the TSE have been asked to participate in the system, according to officials at the bourse.
The TSE plans to establish a company this fall to operate the system in cooperation with a U.S. provider of Internet-based voting services, trust banks that keep institutional investors’ stock certificates and other concerns.