Corporate Governance in Transition: India and Japan Experience | MIJSC
On October 3, 2024, the Mizuho India Japan Study Centre (MIJSC) and the Centre for Corporate Governance & Sustainability at IIM Bangalore hosted a seminar titled "Corporate Governance in Transition: India and Japan Experiences." The event featured experts discussing the evolving corporate governance frameworks in both countries, with a focus on shareholder activism and regulatory reforms.
Professor Fumiko Takeda from Keio Business School presented an analysis of Japan's Stakeholder Governance System, highlighting two waves of shareholder activism and the impact of the Stewardship Code (2014) and Corporate Governance Code (2015). Based on her research, Takeda shared that while shareholder proposals led to positive market reactions and improved financial performance (ROE, ROA), concerns like short-termism and decline in operating performance remained. Challenges such as conservative cash management and low female representation on boards were also discussed.
Professor Padmini Srinivasan from IIM Bangalore outlined the evolution of India's corporate governance, from the 1956 Companies Act to the 2013 Companies Act. She emphasized that, despite strong regulatory frameworks, shareholder activism in India is still weak, with institutional investors often aligning with company management. However, gender diversity mandates and board committees mark progress towards a more robust corporate governance.
Ms. Krupa Hegde from Stakeholders Empowerment Services shared insights on the cautious approach of family-dominated Indian firms towards shareholder proposals. She highlighted increased shareholder vigilance, citing examples such as Siemens and Vedanta.
The seminar, attended by around 40 online and 15 in-person participants, concluded with an interactive session, where questions about Japan's shift to Western governance models and India's shareholder activism were discussed. The event offered valuable insights into how both countries are navigating corporate governance reforms.