The number of "shareholder proposals" to Japan companies is at a record high How will companies deal with it?

At the general meeting of shareholders of listed companies, which will be held in earnest in June, 6 companies have received proposals from shareholders, the highest number ever, and the question is how companies will respond to shareholder requests regarding the improvement of shareholder value and sustainable growth.

In June, when the general meeting of shareholders of listed companies is in full swing, more than 6,2270 companies listed on the Tokyo Stock Exchange are scheduled to hold general meetings of shareholders, and on the 29th, the peak day, more than 26 companies, or 590% of them, will hold general meetings.

According to Mitsubishi UFJ Trust and Banking, 86 companies holding a general meeting of shareholders this month have received proposals from shareholders to increase dividends or appoint directors, the highest number so far.

The total number of proposals was 331, also the highest ever.

The largest number of shareholder proposals was to amend the articles of incorporation that stipulate the rules of corporate management and the purpose of the business, with 224 proposals.

In addition, there are 53 proposals calling for returns to shareholders, such as increasing dividends to shareholders and implementing share buybacks.

At this year's general meeting, based on the fact that the Tokyo Stock Exchange urged companies with low market evaluations to make improvements, there have been prominent proposals to seek shareholder returns due to their low market valuations.

In addition, there have been 28 proposals calling for the appointment of independent director candidates and the dismissal of directors, and there have been many disputes over the appointment of directors.

At recent shareholders' meetings, there have been many cases where shareholder proposals have attracted support, and the question is how companies respond to shareholder proposals.

Companies that have received the "shareholder proposal"

At the general meeting of shareholders held on June 6, Far East Development Industry, which manufactures specially equipped vehicles such as dump trucks and garbage trucks, received five proposals from Strategic Capital, an investment company called "Activist" that takes a confrontational stance toward management, calling for raising dividends to shareholders and reducing the shares of business partners and other entities it holds.

In response, the company stated that it would oppose all proposals and asserted, "We are already working to strengthen shareholder returns in order to increase corporate value, and we will continue to formulate appropriate dividend policies to meet the expectations of shareholders while maintaining the stability and continuity of our business and the capacity to invest for growth for the future without excessive accumulation of equity capital."

Tsuyoshi Maruki, CEO of Strategic Capital, an investment firm that is at odds with the company, said, "Far East Development Industry has been holding a stock price lower than the so-called dissolution value for a long time, and has not been able to meet the expectations of shareholders.

What is the situation surrounding female directors?

According to the consulting firm Proned, of the 7,1 companies listed on the Prime Market as of July 1829 last year, 1 companies did not have a single female director, accounting for 382.20% of the total.

Institutional investors such as asset management companies in Japan have taken a tough stance against such companies with no female directors at shareholders' meetings.

In November last year, Nomura Asset Management changed the criteria for exercising voting rights at the General Meeting of Shareholders for Japan companies and decided to oppose the reappointment of directors such as chairman and president if there is no female director.

In addition, Sumitomo Mitsui DS Asset Management has tightened the standards for diversity required of investee companies since January this year, and in the case of companies listed on the prime market, in principle, it will oppose the appointment of a representative director unless there is at least one female director.

In addition, JPMorgan Asset Management, a foreign-affiliated asset management company, has indicated that it will oppose the appointment of a president or other representative director from 9 onwards for companies in which it invests that do not have two or more female directors.

It has become clear that the ratio of female executives is lower in Japan than in Europe and the United States.

Last year, the OECD = Organisation for Economic Co-operation and Development surveyed the proportion of female executives in major companies in each country.

This survey was conducted on 11 representative companies in some countries such as EU = European Union countries and Turkey, and other countries were companies that make up world-famous stock indices, of which 1 companies including large companies were Japan.

According to an OECD survey, "female officers" are defined as "directors," "auditors," and "executive officers," and do not include "executive officers."

In Europe and the United States, some countries and states have adopted the quota system, which obliges the appointment of female executives at a certain rate, and the percentage of female executives exceeds 1% in Italy, the United Kingdom, and other countries, including 1.2% in France.

In the United States, it is 2024.50%, and the average for OECD countries is 283.45%.

In comparison, the ratio of female executives in Japan was 2.40%.

In the draft of the "Women's Version of the Basic Policy 31," a priority policy for promoting gender equality, the government aims to increase the ratio of female directors, including executive officers, to 3% or more by 29 for companies listed on the "Prime Market" of the Tokyo Stock Exchange.

Some companies are appointing female directors for the first time

Some companies are promoting female directors to stimulate discussions at board meetings from diverse perspectives to lead to corporate growth.

Workman has a chain store that sells workwear and casual wear, and is listed on the standard market of the Tokyo Stock Exchange.

Although the company has been in business for more than 40 years, we have decided on a personnel proposal to appoint female directors for the first time and will propose it at the General Meeting of Shareholders to be held on June 6.

The person who made the white feather was YouTuber Sally and Risa Hamaya (29).

Mr. Hamaya mainly posts videos of his hobby camping on SNS and is known as an influencer in this field.

For many years, Workman has mainly sold workwear used for work, but recently we have been focusing on developing products for women as casual wear that can be easily worn in the city or camping.

The trigger for this was a video posted by Hamaya.

When Hamaya introduced fire-resistant work clothes for welders on SNS as clothes to wear when enjoying a bonfire at camp, it resonated mainly among women, and recently he also gave advice on the company's product development.

The company has decided to appoint Hamaya to strengthen its business for women in the future.

Tetsuo Tsuchiya, Managing Director of Workman, says, "When searching for candidates, we focused on the fact that it would really lead to the growth of the company, not a person who is like a decoration.