Kadota spoke in two sessions. In one session Kadota explained positive outcome from the Governance Code using the material “ Characteristics and Emphases of Japanese Corporate Governance Code which is attached to this blog. Dramatic development happened in acquiring Independent Directors to Japanese companies’ board. As shown on page 6 of the attached material , among 2000 TSE 1st section listed firms 88.0% have more than two Independent Directors at their board where the ratio increased from 21.5% in 2014. We shall also be aware of improvement of Japanese companies’ financials such as ROE and ROA as well as dividend payout ratio explained on page 7 of the presentation material.

In the other session Kadota discussed the suspending subjects of the Governance Code. The presentation material “Ongoing Sophistication of Japanese Corporate Governance Reform” is attached as well to this blog. Referring to recent significant corporate scandals of Toshiba , Takata and Japan Post, Kadota concluded that each case has different characteristics of problem but the common lesson we should learn is that Independent Directors should function effectively at their board to monitor the executive officers’ decision making process and to make an effort to change corporate culture to be much open from the traditional closed condition reflecting life time employment system. Kadota explained that the current urgency for the Reform is how to activate the board and annual general shareholders meeting where we are seeing already some good signs of changes. Kadota also emphasized the importance of director training as well as that of nomination committee for selection and evaluation of CEO .