The Effect of Global Shareholder Activism on the Japanese Financial System and the Japanese Corporation

Yumiko Miwa

Chapter 9 in Corporate Governance in Japan, 2006, pp 93-108 from Springer

Abstract: 6. Conclusion In this chapter, I focused on the changes of the Japanese financial system and the institutional investor’s activism, which are heavily influenced by the institutional investor in the United States. Japanese financial system reform, which is based on the three principles of “free,” “fair,” and “global,” was identified in the globalization of the U.S. investor’s actions. The U.S. institutional investors’ influence gradually increased, and it became significant to study the reasons for the growth of these institutional investors, their role, investment activities and strategies, and their characteristics. Today, the structure of Japanese stock ownership is changed dramatically. It used to be said that a characteristic of the Japanese stock market was mutual stock holding. However, the expansive drop in stock prices and stagnation eliminated unrealized gains in the stock held by banks and companies. Because of this, banks and companies are forced to sell their stocks. Now, foreign investors are taking banks and companies’ places. They have a significant impact on Japanese corporate governance. One of the biggest institutional investors, the Pension Fund Association, have learned CalPERS investment behavior and they have begun to use their voice to change the corporations in which they invest.This shows institutional investors continue to have a hand in corporate governance by exercising shareholder voting rights and thus, Japanese companies tend to lend their ear to institutional investors.

Keywords: Corporate Governance; Mutual Fund; Institutional Investor; Pension Fund; Public Pension (search for similar items in EconPapers)
Date: 2006
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DOI: 10.1007/978-4-431-30920-8_9

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