The Japan Financial Services Agency has published minutes of the third meeting of its expert panel on revising the Corporate Governance Code, showing an updated draft that would make the code more principle-based and focus it on growth investment, stronger board functions and disclosure of securities reports before annual general meetings. Members broadly supported the direction of travel, while continuing to debate how the new interpretive guidelines should be positioned within the code. Key revisions discussed include explicitly naming investment in equipment, research and development, human capital and intellectual property as examples of growth investment, and reframing the capital allocation discussion so that companies assess the use of financial assets such as cash and deposits, real assets and other management resources rather than cash alone. The draft would also restore the board's principle-level role in supervising timely and accurate disclosure, create a separate principle on risk management, broaden diversity wording to cover gender, internationality, career history, age and cultural background, and strengthen language on minority shareholders, controlling shareholders and director independence. On disclosure timing, the revised preface acknowledges that publishing securities reports more than three weeks before the shareholders meeting is not necessarily easy under current practice and says institutional work with the Ministry of Justice on aligning reports, audits and disclosure items will proceed in parallel. The chair asked the secretariat to revise the draft again in light of the discussion, circulate changes by email and leave final review to the chair before moving to consultation. The secretariat said the Tokyo Stock Exchange will be asked to run public comment for about one month, with an English version published at the same time, and accompanying material indicates it may be possible to require corporate governance reports reflecting the revised code by July 2027 at the latest.
Japan Financial Services Agency2026-05-22
Japan Financial Services Agency advances Corporate Governance Code revision toward public consultation after expert panel review
The Japan Financial Services Agency published minutes of the third expert panel meeting on revising the Corporate Governance Code, outlining a draft that would make the code more principle-based and emphasise growth investment, stronger board functions and earlier disclosure of securities reports. Key changes include expanded examples of growth investment, a broader capital allocation framework, restored board responsibility for disclosure, a new risk management principle, wider diversity criteria and stronger provisions on minority and controlling shareholders and director independence. The secretariat will further revise the draft and move to public consultation, with potential application to corporate governance reports by July 2027.