engagement
but failed to engage adequately in initiatives and is not expected to make improvements, and if this is deemed to be hindering, or highly
likely to hinder in the medium/long run, the enhancement of corporate value and sustainable growth, the matter will be escalated to the
exercise of voting rights, and we will in principle vote against the re-election of a director who has been in the position of chairperson
and president, etc.
In
these Proxy Voting Standards, “chairperson and president, etc.” refers to the chairperson, president, bank president, chief
executive officer (CEO), and any person who assumes a position equivalent thereto.
(3)
In particular, we expect those companies whose stocks are constituents of TOPIX 100 to become role models for other Japanese companies
by actively working to realize “appropriate management practices.” At any shareholders' meetings held in and after November
2024, we will in principle vote against the re-election of a director who has been in the position of chairperson and president, etc.,
if we determine that the following efforts in particular are clearly insufficient:
①
Information disclosure that integrates ESG issues: To disclose information in appropriate media, including integrated report, in
accordance with internationally accepted standards and to obtain third party assurances for numerical data as much as possible;
②
Climate change: To set medium- to long-term net-zero targets for GHG emissions and obtain SBT certification and to clarify risks
and business opportunities associated with climate change through information disclosure based on the TCFD Final Report; and
③
Outside directors with effective skills: To disclose a skills matrix of directors in materials for shareholders' meeting to indicate
that outside directors have relevant skills and experience, including those in the areas of management, finance, and ESG.
(4) If
the return on equity (ROE) of the company in question has been below 5% and below the 33rd percentile of the industry for the most recent
3 consecutive fiscal years, except in cases where the board of directors is a monitoring board and efforts for management improvement
have been demonstrated, we will in principle vote against the re-election of a director who has been in the position of chairperson and
president, etc., for the most recent 3 or more consecutive fiscal years. However, this provision does not apply to a company which has
not been listed for 5 years as of the last day of the most recent fiscal year.
In
these Proxy Voting Standards, financial data principally refers to data published on a consolidated basis. If no financial data on a consolidated
basis has been published, the data on a non-consolidated basis shall be used (the same applies hereinafter). “33rd percentile of
the industry” is obtained from listed companies that are constituents of TOPIX (Tokyo Stock Price Index), and is based on the 33
industrial classifications of the Tokyo Stock Exchange. If the calculated value is below 0%, it is 0%. The phrase “cases where...
efforts for management improvement have been demonstrated” refers to any cases falling under either ① or ② below. However,
both ① and ② exclude cases where the total of net profits reported during the most recent 3 consecutive fiscal years is a
negative figure.
|
①
|
Recurring profit (if no recurring profit
is reported, pretax profit; hereinafter the same applies) for the last fiscal year or the net profit has increased compared with the previous
fiscal year. |
|
②
|
Recurring profit for the last fiscal
year or the net profit has increased compared with 3 fiscal years ago. |
(5)
In any of the following cases, we will in principle vote against the re-election of a director who has been in the position of chairperson
and president, etc.:
① Strategically
held stocks held by a financial institution account for more than 50% of its net assets or if strategically held stocks held by a company
other than a financial institution account for more than 20% of its invested capital, or
② With
regard to the appropriation of surpluses or the introduction or renewal of anti-takeover measures resolved by the board of directors,
without being proposed at a shareholders’ meeting, it would have been reasonable for us to vote against said appropriation of surpluses
measures or introduction or renewal of anti-takeover measures pursuant to these Proxy Voting Standards if such appropriation or introduction/renewal
had been presented at the shareholders' meeting.
(6) If
any inappropriate information disclosure is made, if shareholder value decreases due to management, financial or capital strategies, or
if any other conduct that clearly damages shareholder value is committed, we will in principle vote against the election of a director
who is found to be responsible for the conduct. If the disclosure of financial information is delayed and it becomes difficult to make
a judgment on the exercise of proxy voting rights, it will be deemed that the information disclosure was inappropriate. It is desirable
that necessary financial information is disclosed at least 1 month prior to the day of the shareholders’ meeting.
If
a company that has a parent company falls under all of ①, ②, and ③ of “6.
Allocation
of Dividends and Profits (1)” for the last two fiscal years in a row and has extended a loan, etc. to the parent company or its
group company as per the annual securities report for the previous fiscal year, the company’s shareholder value is determined to
have decreased due to financial or capital strategies.
(7)
If the number, the composition, or the term of office of directors falls under any of the following cases, we will in principle vote against
the re-election of a director who has been in the position of chairperson and president, etc.:
①The
number of directors is less than five or 20 or more;
②If
the number of outside directors is fewer than the minimum level, we will in principle vote against the re-election of a director who has
been in the position of chairperson and president, etc. The “minimum
level” is
in principle a majority. In the case of a company without a controlling shareholder that has established effective governance on nomination,
the “minimum level” is one third of the number of directors. However, in the case of a company without a controlling shareholder,
the “minimum level” is one third of the number of directors for any shareholders’ meetings held in or before October
2024;
③There
is no female director; or
④The
director’s term of office is two years in a company with a board of auditors.
