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The impact of Japan’s stewardship code on shareholder voting

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  • Tsukioka, Yasutomo

Abstract

This study investigates the impact of Japan’s Stewardship Code on the shareholder voting behavior of institutional investors. The stewardship code is not mandatory with legally binding regulations, but it encourages institutional investors to exercise their voting rights and monitor their investee firms to improve their investee firm value. I find that Japan’s Stewardship Code leads trust banks and insurance companies that accept the code and do not lend money to their investee firms to become more likely to vote against the appointment of representative directors and CEOs in firms with lower profitability. Furthermore, after the code, pension funds and foreign shareholders become more likely to vote against the appointment of representative directors and CEO appointments in firms with lower profitability. These results suggest that Japan’s Stewardship Code promotes voting activities of institutional investors.

Suggested Citation

  • Tsukioka, Yasutomo, 2020. "The impact of Japan’s stewardship code on shareholder voting," International Review of Economics & Finance, Elsevier, vol. 67(C), pages 148-162.
    • Handle: RePEc:eee:reveco:v:67:y:2020:i:c:p:148-162
    DOI: 10.1016/j.iref.2019.12.014
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    More about this item

    Keywords

    Corporate governance; Stewardship code; Voting; Shareholder meeting; Institutional ownership; Cross-shareholding;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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