"Vote against even big managers" Unusual change in shareholders' meeting Why they say NO June 6 at 6:18
In June, the corporate shareholders' meeting season is in full swing. One of the themes of this year's General Meeting of Shareholders is diversity. Shareholders are scrutinizing gender balance. At Canon's General Meeting of Shareholders in March, Canon's top management was reappointed to the Board of Directors by a majority vote. It seems that there were quite a few shareholders who said "NO" to the fact that the number of female directors was zero. It Japan pointed out that the ratio of female executives is low compared to other countries around the world. How should companies deal with this problem? (Economic Affairs Department Reporter: Kei Nakazawa, Neil Kato, Mitsutoshi Saito)
The shock of the "Canon shock"
"I can't believe that the opposition vote against that big manager will spread so far..."
At Canon's General Meeting of Shareholders held in late March, only 3.27% of shareholders supported the reappointment of Chairman and CEO Fujio Mitarai, 87, who has served as top executive for more than 50 years.
Mr. Mitarai is a tycoon who also served as chairman of Keidanren, but he barely needs a majority to be reappointed. The result was like stepping on thin ice.
Why did this happen? When we examined the voting behavior of asset managers, which are institutional investors, we found a strict scrutiny of the gender balance of investors.
For example, major Japanese companies Nomura Asset Management, Daiwa Asset Management, and Sumitomo Mitsui DS Asset Management have announced that they have opposed Mitarai's reappointment due to the absence of female directors.
These companies were in favor of last year's shareholders' meeting, but over the past year they have revised their voting standards. In any case, if there is no female director, the standard has been changed to oppose the appointment of top management, etc., and the company has voted against it in accordance with this standard.
Furthermore, ISS, a major proxy advisory company in the United States, seems to have influenced the decisions of shareholders.
The company advises investors on the pros and cons of proposals at the General Meeting of Shareholders, but revised its advisory policy in February. For companies that do not have a single woman on their board of directors, they will be encouraged to oppose the appointment of top executives.
Such moves by asset management firms and advisory firms seem to have led to a decline in the approval rating.
Canon commented on this as follows, revealing that it will proceed with preparations to appoint female directors for next year's General Meeting of Shareholders.
Canon's Comment
While it is true that there are no women on the board at this time, there are two female executive officers and a foreign executive officer. Therefore, we believe that we are able to secure sufficient diversity in our daily management.
However, we also believe that it is necessary to accept the fact that the number of investors who voted against the proposal due to the absence of female directors has led to a decline in the approval rating, and we will continue to engage in careful dialogue with shareholders to ensure even greater diversity.
We have been considering this for several years and are preparing to appoint female directors for the 2 General Meeting of Shareholders.
The ratio of female executives is low Japan
To begin with, it has become clear that the ratio of female executives in Japan is lower 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.
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 45% in Italy, the United Kingdom, and other countries, including 2.40% in France. In the United States, it is 31.3%, and the average for OECD countries is 29.6%.
In comparison, the ratio of female executives in Japan remains at 15.5%.
Prime market: 2% of directors have zero female directors
There are many companies in Japan that have zero female directors, such as Canon.
According to a survey by consulting firm Proned, as of July 7 last year, 1 of the 1829,1 companies listed on the Prime Market, the top of the Tokyo Stock Exchange, had at least one female director, or 382% of the total.
Corporate shareholders' meetings will peak in June, but will there be any change in the appointment of female directors? NHK surveyed approximately 2 of the 6 companies with zero female directors and will hold a general meeting of shareholders in June to see if they were proposing new female director candidates.
As a result, of the 382 companies that had issued convocation notices by June 6, 200 companies had proposed the appointment of female director candidates.
At present, there are many cases where lawyers and university professors are appointed as outside directors from outside, but it can be seen that the idea of ensuring diversity is spreading among companies.
Companies with zero female directors What is this year's general meeting of shareholders?
Workman is listed on the standard market of the Tokyo Stock Exchange and develops workwear and casual wear.
The first female director candidate in more than 40 years since the company was founded was Risa Hamaya, 42, also known as Sally, who is active as a YouTuber. She says she decided to appoint her as a director in order to further strengthen her business for women.
Managing Director
Tsuchiya: "When searching for candidates, we focused on whether it would really lead to the growth of the company, rather than on being a decorative figure.
On the other hand, 57 companies did not elect female director candidates at this month's General Meeting of Shareholders, and continue to have zero female directors.
Mitsui E&S, which manufactures engines for ships, is one of them, and all seven directors are men. This company is listed on the Prime market of the Tokyo Stock Exchange and is one of the 1 companies that make up the Nikkei Stock Average.
A person in charge of the Mitsui E&S General Meeting of Shareholders said, "We are steadily promoting the appointment of women internally as part of our corporate efforts, and the first female executive officer was appointed in
April.
Companies that are forced to respond quickly
The draft of the "Women's Version of the Basic Policy 5" announced by the government on May 2023 aims to increase the ratio of female directors, including directors and executive officers, to at least 2030% by 30 of companies listed on the top prime market.
Some foreign institutional investors have indicated that they will oppose the appointment of top management unless there are "two or more women" on the board of directors from next year onwards.
Rather than simply appointing a single female outside director from outside, companies need to make serious efforts to develop human resources so that they can appoint female directors from within the company.
Kei
Nakazawa, Reporter,
Ministry of Economic AffairsJoined Fukushima Bureau in 2011After working at Fukuoka
Bureau, he is currently in
charge of the financial industry.
Neil Kato, Reporter of the Economic DepartmentJoined the Shizuoka Bureau and Osaka Bureau
in
2010,
and is currently in
charge of the financial industry.
Reporter
of the Ministry of Economic Affairs MitsutoAfter joining the Bureau in 2017,
he is currently in
charge of the financial industry.