Japan Companies Expecting Tough Annual Meetings Season

Japanese companies including Sharp, Sony and Nissan may be in for a rough ride this week as investors emboldened by new governance rules seek to punish executives for low profitability and inadequate accountability from outside directors.

The annual meetings season will hit a peak on Friday with 41 per cent of Japanese groups with a March fiscal year-end holding their AGMs. The concentration — a notorious feature of Japan’s rubber-stamp meetings — is slightly higher than last year, but a major step forward from the 96 per cent recorded two decades ago.

To prepare for this year’s proxy season, small and big companies alike have compiled lengthy Q&A cheat sheets to address tougher-than-usual shareholders and are scrambling to meet the new comply-or-explain rule requiring the appointment of at least two independent directors.