This is a collection of best practices published by the Financial Services Agency regarding "Case Studies on Board of Directors Effectiveness Enhancement Initiatives." Based on interviews with 18 listed companies, it systematically compiles specific initiatives for improving board effectiveness in pursuit of corporate governance reform implementation.
Key Points
1. Overview of Case Studies
- Publishing Organization: Financial Services Agency
- Publication Date: June 30, 2025
- Survey Period: September 2024 - January 2025
- Survey Targets: 18 listed companies
- Background: Corporate Governance Reform Implementation Action Program 2024
- Objective: Sharing and disseminating board effectiveness enhancement cases
2. Surveyed Companies (18 Companies)
- Manufacturing: Astellas Pharma, Shin-Etsu Chemical, Daiichi Sankyo, Tokyo Electron, Hitachi, HOYA, Murata Manufacturing, etc.
- Non-manufacturing: ANA Holdings, J. Front Retailing, Mitsubishi Shokuhin, Yamanashi Chuo Bank, etc.
- Characteristics: Ensuring diversity in industry, scale, and governance structure
3. Agenda Setting Improvements
Review of Matters for Deliberation
- Reorganization Triggered by Governance Structure Changes:
- Clear separation of supervision and execution
- Focus on important matters
- Expanded delegation to execution
- Strategic Agenda Setting:
- Regular discussion of medium to long-term strategies
- Advanced risk management
- Response to sustainability issues
Board Chair Leadership
- Planned annual schedule setting
- Prioritization of agenda items
- Appropriate allocation of discussion time
- Securing free discussion time
4. Organizational and Structural Innovation
Strengthening Secretariat Functions
- Promoting Centralization:
- Establishment of Corporate Governance Office
- Ensuring independence of Board secretariat
- Assignment of dedicated staff
- Introduction of UK-type Model:
- Company Secretary function
- Enhanced expertise in Board support
- Overall governance coordination
Utilization of Effectiveness Evaluations
- Establishing PDCA Cycle:
- Annual evaluation implementation
- Clarification of issues
- Development and execution of improvement plans
- Progress monitoring
- Use of Third-party Evaluations:
- Ensuring objectivity
- Benchmarking
- Introduction of new perspectives
5. Communication Enhancement
Information Provision to Outside Directors
- Enhanced Pre-meeting Briefings:
- Individual briefing sessions
- Early provision of materials
- Advance response to questions
- Closing Information Gaps:
- Observer participation in management meetings
- Sharing of important meeting minutes
- Regular information updates
Promoting Mutual Understanding
- Post-Board Meeting Reviews:
- Confirmation of discussion intent
- Opportunities for additional questions
- Informal opinion exchanges
- Creating Touchpoints with Operations:
- Site visits
- Dialogue with young employees
- Meetings with customers and business partners
6. Distinctive Initiative Examples
Corporate Culture Transformation
- Dissemination of Top Messages:
- Town hall meetings
- Use of internal SNS
- Two-way communication
- Ensuring Psychological Safety:
- Open discussion culture
- Culture treating failures as learning opportunities
- Respect for diverse opinions
Human Capital Management Practices
- Setting Original Indicators:
- Engagement scores
- ROI on talent development investment
- Diversity indicators
- Promoting Women's Advancement:
- Target setting for management ratios
- Career support programs
- Mentoring systems
7. Characteristics by Governance Structure
Companies with Audit & Supervisory Board
- Strengthening cooperation with Audit & Supervisory Board members
- Utilizing voluntary advisory committees
- Improving outside director ratios
Companies with Audit & Supervisory Committee
- Management participation of Audit & Supervisory Committee members
- Cooperation with internal audit departments
- Enhancement of risk management systems
Companies with Three Committees
- Functioning of three committees
- Thorough separation of execution and supervision
- CEO succession planning
8. Analysis of Success Factors
- Top Management Commitment: Strong will for reform
- Continuous Improvement Attitude: Transition from form to substance
- Utilization of External Perspectives: Active involvement of outside directors
- Enhanced Secretariat Functions: Ensuring expertise and independence
9. Future Challenges and Outlook
- Promoting Digitalization:
- Paperless operations
- Remote participation environment
- AI-powered minute-taking
- Global Governance:
- Overseas subsidiary management
- Cross-border M&A response
- Response to international ESG requirements
10. Recommendations for Utilization
This case study collection is positioned as a "collection of hints" for companies to enhance their board functions according to their own circumstances. What's important is not formal imitation but selecting and implementing effective initiatives based on recognition of each company's challenges.
The FSA positions this case collection as a "living document" and indicates its policy to continuously update and enhance the content. This is expected to contribute to substantial improvement in Japanese corporate governance and sustainable enhancement of corporate value.