Gouvernance

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La transparence au Japon aussi !

Au Japon, le Financial Services Agency a annoncé que le Financial System Counsel a publié le rapport intitulé « Working Group on Corporate Disclosure – report on Promoting Constructive Dialogue » (19 juillet 2016).

Petit extrait de ce document :


III. Enhancing disclosure of non-financial information

Non-financial information includes a wide array of information such as governance, social and environmental matters as well as business policies/strategies and MD&A. In recent years, there has been further growing interest in such non-financial information in response to the initiatives to bolster corporate governance and the increasing demand regarding social and environmental issues.

Companies are required to disclose in their Annual Securities Reports information that is necessary and appropriate for the public interest or protection of investors. Accordingly, for example, in cases where social or environmental issues have a material impact on the business or performance of the issuing companies, they are required to disclose such issues in the « MD&A » and « Risk Factors » of the Annual Securities Reports. Also, in recent years, in addition to the improvement of disclosure requirements of governance information in Corporate Governance Reports, a substantial number of companies have taken to disclosing diverse and technical non-financial information in the form of CSR reports and Environment Reports in order to satisfy the wide-ranging information needs of investors and other stakeholders.

To ensure that companies provide non-financial information which meets stakeholders’ needs through creativity and ingenuity, it could be one option to encourage companies to provide non-financial information through voluntary disclosure.

Also note that it might be necessary in the future to make some non-Financial information subject to mandatory disclosure requirements; therefore, it is important to make clear the approach to take for information whose disclosure should be obligatory. In view of the criminal punishments and other heavy sanctions applied to false statements in the Annual Securities Reports, and of the necessity to concisely disclose the information that is truly material for investment decisions, we believe that it would be appropriate to take into account the following elements holistically when considering whether certain non-financial information should expressly be made obligatory:

  • Whether the information is truly necessary for investors in making investment decisions;
  • Whether the information has become prevalent in the securities market, and has been provided to investors to keep them from being misled;
  • Whether the cost borne across the market would be considerable, including, for example, the cost borne by disclosing companies as a
  • consequence of making the information disclosure mandatory, and the cost borne by investors to acquire and evaluate the information;
  • Whether the request to disclose non-financial information will adversely discourage companies from disclosing useful information, and as a result the overall quality and quantity of information disclosure will decline;
  • Whether the disclosure of non-financial information is required by other laws.

Also, as mentioned under « Basic approach, » in order to improve accessibility to corporate information, there are the needs of those investors, especially overseas institutional investors, that companies compile the information that is released across multiple disclosure documents into a single document in an easy-to-understand fashion. In order to address investor needs of this kind, we believe that it is important for companies to consider the way of voluntary disclosure through creativity and ingenuity; some examples may be to unify the information contained in multiple disclosure documents into a single document, or to systematically include hyperlinks to multiple disclosure documents on a single web page.

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3. Investment decisions made from a mid- to long-term perspective

In order to ensure that the corporate disclosure of information leads to sustainable growth and increased corporate value over the mid- to long term, it will be necessary to take further steps encouraging investors to use the information disclosed by companies to make investment decisions grounded in a mid- to long-term perspective.

Such steps may include the following:

  • Discuss dialogue between institutional investors and the investee companies of investment, as well as the way in which voting rights are exercised at the Council of Experts Concerning the Follow-up of Japan’s Stewardship Code and Japan’s Corporate Governance Code, so as to make stewardship responsibility more effective in boosting corporate value over the mid- to long term and ensuring sustainable corporate growth.
  • Individual investors are generally expected to have the mid- to long term in mind, with shareholders holding shares for over three years on average accounting for about 70%. In view also of the expansion of the defined-contribution pension system and NISA (Nippon Individual Savings Account: a system for the tax exemption of small investments), further intensify education toward mid- to long-term-oriented investing in the context of the initiatives undertaken by the Japan Securities Dealers Association and other organizations to improve the literacy of individual investors.

À la prochaine…

Ivan Tchotourian