SfC is “big in Japan”, thanks to Etica Sgr

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Japan engagement

10 Japanese companies engaged between June and July by Shareholders for Change


Sony’s stock option plan has a vesting period of just one year, thus below the three years’ threshold required by Etica Sgr in its engagement policy.

Panasonic and Mitsubishi Estate didn’t submit to shareholders’ vote their remuneration policy, while women are not sufficiently represented within Denso Corp.’s board of directors.

These are just some of the reasons why SfC’s member Etica Sgr voted against board proposals at ten annual general meetings of Japanese companies, between June and July. This was done also on behalf of the whole Shareholders for Change network.


2020 Japanese AGM season seems to have been designed with the purpose of “making it hard for investors to ask difficult questions”


As reported by the Financial Times the 2020 Japanese AGM season seems to have been designed with the purpose of “making it hard for investors to ask difficult questions“: almost 33 per cent of companies listed on Tokyo’s stock exchange have held their annual general meetings on June 26, while “another 50 per cent have packed their AGMs into the rest of the same week — a significantly higher concentration than last year“.

For active shareholders this means having to choose which AGM to attend on days in which dozens of them are scheduled. That sounds alarming. But in the context of 2020, where a record number of Japanese companies have been facing proposals from shareholders at their AGMs, it is not necessarily a terrible sign. It may simply mean, as underlined by FT, that “if shareholders really want to get somewhere with management in Japan, the worthwhile conversation is best done quietly and out of sight“.


Etica Sgr style in AGM


«This is exactly the style we are adopting», explains Aldo Bonati, Corporate Engagement and Networks Manager of Etica Sgr. «We have expressed our positions, primarily on governance issues concerning Board independence and diversity management remuneration and cross-shareholding, with the vote and communicated our choices to the companies and the wider public. In general, we have voted in favour of proposals on ESG submitted by other shareholders».

In one case, the AGM of TDK Corp., Etica has voted in favour of all items on the agenda. «We have appreciated, in particular, the composition of the new board, with the first woman proposed as an independent director, and the consultative vote on remuneration with regard to the Restricted Stock and Performance Share Plan», adds Bonati.

Although SfC’s engagement activities are mostly focussed on European companies, the relative importance of non-European markets has increased over time: in 2019 just two companies were engaged on behalf of SfC in Japan. This has grown to more than ten in 2020.