TOKYO, Japan — More than 600 Japanese corporations will hold their annual general meetings on Tuesday, amid a move to the internet as the government tries to avert a resurgence of coronavirus infections. Under the COVID-19 pandemic, Japanese corporations are hosting general meetings for the second year in a row. While the government lifted the state of emergency in major cities such as Tokyo and Osaka a week ago, businesses remain concerned and are rushing to put COVID prevention measures in place. Some businesses want to alter their articles of incorporation in order to hold online meetings, which will allow investors to join from the comfort of their own homes, away from the risk of infection. The Japanese government amended its Act on Strengthening Industrial Competitiveness earlier this month to allow corporations to hold shareholder meetings entirely online. At this year’s AGMs, companies like SoftBank Group, Takeda Pharmaceutical, and Sumitomo Mitsui Financial Group proposed changing their articles of incorporation, allowing them to host entirely online shareholder meetings beginning next year. Fully virtual meetings “make it easier for many shareholders, including [those] who reside in distant places to attend, which will lead to revitalization, efficiency, and smooth operation,” as well as “contribute to countermeasures for infectious diseases” like COVID-19, according to SoftBank Group’s AGM Notice. The suggestion was accepted. Investors will have more time to attend several meetings thanks to online AGMs. Japan is known for having a short AGM season. The general meetings of around 90% of corporations with fiscal years ending in March are held at the end of June. Today, June 29, is the busiest day of the year, with over 30% of AGMs taking place. Some investors fear that if Japan Inc. goes fully online, shareholders’ capacity to question management will be harmed. IR Japan Holdings, an investor relations firm, sought a partial change to its articles of incorporation so that future AGMs might be held without a physical site. According to proxy consulting firms like ISS, the idea could “hinder meaningful dialogues between shareholders and management.” In a statement, IR Japan defended its proposal, claiming that entirely virtual meetings allow more shareholders to attend and “reduce the venue’s cost.” The corporation also stated that it will “expand shareholders’ right to choose a day to attend.” A majority of shareholders voted in favor of the change at the company’s general meeting this month, with only 11% voting against it. Virtual meetings are growing more frequent in Asia-Pacific, with more corporations holding AGMs over the internet during COVID-19 in countries including Australia, India, and Malaysia. According to a report released last month by the Asian Corporate Governance Association, up to December 2020, all of India’s top 50 public businesses by market value held virtual meetings. Investor engagement in AGMs has been low, even before the pandemic, according to the research, with 62 percent of global respondents stating they will not attend any general meetings in 2019 or 2020. Meanwhile, 20% of respondents claimed they attended virtual AGMs last year. Continue reading
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