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This month, one of Japan’s most secretive listed companies announced it would set up an investor relations department – and its shares jumped 15 percent. Okay, I might be overplaying this a bit.
FANUC, the world’s biggest maker of industrial robots, also said it would explore ways to return more capital to investors. In any case, we are likely to see more new IR teams spring up in a country where firms are re-examining their attitude toward shareholders.
The Japanese market is undergoing a wave of change thanks to the policies of Prime Minister Shinzō Abe. Among his various reforms, a key development for the IR industry is the creation of a new corporate governance code.
Currently in its final draft form, the code calls for companies to boost IR through actions such as stock surveillance, improved dialogue between internal departments and the creation of channels for investor feedback. FANUC’s president says his new focus on shareholders was sparked by the code.
The buy side is exerting pressure on companies, too. Last year saw the introduction of a new stewardship code, which more than 100 institutional investors in Japan have adapted.
In addition, shareholder activism is rearing its head: Daniel Loeb’s Third Point mounted a campaign against FANUC in February, calling for it to return some of its $8.5 bn cash pile, although the company denies its recent announcement was influenced by the hedge fund.
With Abe’s reforms making Japanese industry more competitive, the country’s listed companies will find it easier to attract new shareholders, regardless of whether they become more investor-friendly. The FANUC case, however, indicates the premium available to those that make the effort to show shareholders they care about them.
