Institutional Shareholder Engagement with Japanese Firms
48 Pages Posted: 18 Jun 2015 Last revised: 30 Jul 2015
Date Written: June 17, 2015
This paper explores how shareholder engagement on environmental, social and governance (ESG) issues is informally exercised by a large global institutional investor with locally embedded, geographically remote firms. By studying a UK asset manager’s shareholder engagement strategies on ESG issues toward Japanese firms, we document three findings. First, it is found that main target firms of engagement activities are large firms with global operations, and that corporate governance issues are the most important engagement topic in Japan. Second, in trying to effectively exercise voice across societies, engagement activities are conducted with geographically remote target firms on various ESG agendas through a self-enforcing, face-to-face, and sometimes collective manner. Finally, this study argues the gap between the asset manager’s motivation to engage and local target firms’ readiness to respond due to corporate organisational and language issues.
Keywords: Shareholder engagement, ESG, corporate governance
JEL Classification: G15, G23, G34
Suggested Citation: Suggested Citation