Shareholder activism – mechanisms and implications

Key researcher

Project background and aims

This research brief summarises the results of a study by the Monash Centre for Financial Studies into shareholder activism in Japan and its implications for shareholder returns.

Shareholder activism is on the rise in Japan, with a potential impact on the behaviour and performance of listed Japanese companies. The upsurge in the activity has been encouraged by significant reforms to Japan’s corporate legal and regulatory framework implemented since 2014 to improve companies’ governance and financial performance.

The nation’s biggest institutional investor, the Government Pension Investment Fund of Japan (GPIF), has also contributed to the change in corporate governance and stewardship by requiring its asset managers to disclose and explain their voting records at AGMs of investee companies.

Shareholder activism in Japan has not yet developed to the same degree or in the ways it has in the United States and in Europe, where investors are increasingly focusing on so-called ESG issues – environmental, social and governance. In Japan, by contrast, shareholder activism has been mainly concerned with governance and financial performance.