Support Services to Use Corporate Governance Code in Management

From June 2015, Japan’s Corporate Governance Code is apply to the companies listed in the First and Second Sections of the Tokyo Stock Exchange, as well as on its JASDAQ and Mothers. Deloitte Tohmatsu Group (Deloitte Japan) will help companies to work on consideration of whether to comply or explain in each item specified in the Corporate Governance Code, including formulation of medium-term management plans, seminars for directors and auditors, evaluation of the board of directors, and establishment of the evaluation criteria for independent accounting auditors.

What Is Corporate Governance Code?

In Japan’s Corporate Governance Code, “corporate governance” means a structure for transparent, fair, timely and decisive decision-making by companies, with due attention to the needs and perspectives of shareholders and also customers, employees and local communities.
It also says that “This Corporate Governance Code establishes fundamental principles for effective corporate governance at listed companies in Japan. It is expected that the Code’s appropriate implementation will contribute to the development and success of companies, investors and the Japanese economy as a whole through individual companies’ self-motivated actions so as to achieve sustainable growth and increase corporate value over the mid- to long-term.”
  The Japan Revitalization Strategy approved by the Cabinet in June 2013 specified as one of its measures the “preparation of principles (a Japanese version of the Stewardship Code) for institutional investors in order to fulfill their stewardship responsibilities, such as promoting the mid- to long-term growth of companies through dialogue.”
This led to the formation of the Council of Experts Concerning the Corporate Governance Code in August 2014, with the Financial Services Agency and the Tokyo Stock Exchange serving as joint secretariat. The Council of Experts met nine times since August 2014 to March 2015, and developed its basic thought on a corporate governance code as “Japan’s Corporate Governance Code [Final Proposal]” on March 5, 2015.
  In accordance with this Code, the Tokyo Stock Exchange is expected to revise its listing rules and related regulations.

The General Principles of the Final Proposal of the Code concretely show ideal corporate governance at Japanese listed companies.

General Principles
1. Securing the Rights and Equal Treatment of Shareholder
2. Appropriate Cooperation with Stakeholders Other Than Shareholders
3. Ensuring Appropriate Information Disclosure and Transparency
4. Responsibilities of the Board
5. Dialogue with Shareholders

“Japan’s Corporate Governance Code [Final Proposal]” organized by the Council of Experts Concerning the Corporate Governance Code is accessible from here (PDF file of the Financial Services Agency).

※Source: Website of the Financial Services Agency

List of Services Provided for Response to the Corporate Governance Code

Deloitte Japan provides services related to measures taken for the Corporate Governance Code in order to satisfy the criteria established by the Financial Services Agency and the Tokyo Stock Exchange.

Major Relevant Services

• Support for introduction of the Corporate Governance Code
• Support to Seminars for Directors and Auditors (Available in English) 
• Support for Analysis and Evaluation of Effectiveness of the Board of Directors (Self-Evaluation, External Evaluation)
• Support for Consideration of Perspectives to Evaluate Usefulness of External Audit Firm
• Service to Prepare Integrated Reporting and Visualize the Value Creation Process
• Support for Formulation of Medium Term Management Plan
• Service to Build up Risk Assessment and Risk Management Systems
• Support for Establishment and Operation of Internal Audit System
• Service to Build up Directors’ Remuneration System
• Advice Service for Transition to Company with Audit and Other Required Committees Established