Genuine Self-regulation in Japanese Capital Markets: The Stewardship Code: In Comparison to the Corporate Governance Code

I. Introduction | II. Japan’s Stewardship Code | 1. Outline of the Stewardship Code | 2. Background of the SSC | 3. Statistics on the SSC | III. Japan’s Corporate Governance Code | 1. Outline | 2. Statistics | IV. The Stewardship Code in Comparison to the Corporate Governance Code | 1. Who Initiated and Created it? | 2. Degree of Binding Effect and Enforcement Mechanism | 3. Legitimacy | V. Criticisms of the Stewardship Code | 1. Does Shareholder Engagement Really Contribute to the Enhancement of Corporate Governance and the Maximization of Shareholder Value? | 2. Not in Accordance with the Passive Investment Policy of Most Institutional Investors | 3. Weak Binding Effect and Enforcement | 4. Focus on the Mid- to Long-term Investment Return | 5. Conflict with the Traditional Concept of Shareholder Value Maximization | 6. Box-ticking for Stewardship Activities and Boilerplate Explanations | VI. Improvement of the Stewardship Code | 1. The Council of Experts Concerning the Follow-up of Japan’s Stewardship Code and Japan’s Corporate Governance Code | 2. Proposal for Revised Stewardship Code | VII. Concluding Remarks