February 2025

Thank you very much for the opportunity to address the meeting today.

I am very pleased to be able to offer the perspectives of ICGN and our members on the very important and welcome updates that are being proposed to the Japan Stewardship Code.

Established in 1995 and led by investors responsible for assets under management of >US$90 trillion, ICGN advances high standards of corporate governance and investor stewardship globally.

The Japanese Stewardship Code has been a significant element of Japan’s efforts to enhance corporate governance and promote sustainable economic growth, the opportunity arising as a result of this review to enhance it further is welcomed as we look to the future and hope to see this progress continue.

The core aims of the amendments, to promote beneficial ownership transparency and to promote the ability of signatories to undertake collective or collaborative engagements, as a method for contributing to constructive dialogue between investors and companies are both very welcome.

I would like to offer the following suggestions and feedback on the proposed amendments.

In material 1, paragraph 4.2, we support the goals of this amendment. However, we believe that the language as written in English may be difficult to interpret.

The phrase “explain the status of the shares they own/hold” may not be clear. We suggest that the goal of the amendment be specifically clarified. Status may mean a number of different things, for example the number of shares in their holding, or the % of voting rights that they hold, or the number of shares that are held in client accounts which may be voted under a variety of different policies.

Similarly, we recommend that you seek to clarify that the term “disclose in advance their policies on how to respond to requests from investee companies” is related specifically to requests about confirming details of shareholdings, rather than all approaches from companies. This is important, as the stewardship process involves many requests for meetings and information between investors and their investee companies.

In material 1, paragraph 4.6 we believe that the suggested edits work well. Keeping the pragmatic flexibility to use different methods of engagement is important to make the code flexible enough to respond to various stewardship approaches, whilst also promoting high standards.

However, we would like to note that while this step is helpful, it will be important that the various branches of the Japanese government work together to create an environment where the safe harbour conditions exist for effective collaborative engagement.

It was very helpful that the definition of “joint holders” was clarified by the revision of Financial Instruments and Exchange Act last year. However, to fully address asset manager concerns, the definition of “an important management proposal” also needs to be clarified by another revision of the Cabinet Office Ordinance.

Thank you again for your time and for allowing ICGN to continue to contribute to the development of the Japan Stewardship Code.

ENDS