Corporate Governance and Value Creation in Japan

This is the first book to furnish a root cause of the low valuation of Japanese listed companies by using, as qualitative evidence, unique global investor surveys, which are rarely available for Japanese companies. Also contained in this book as quantitative evidence is empirical research with regression analysis implying a positive correlation between corporate governance and value creation in Japan.

The author explains the rationale underlying the suggestion of the Ito Review on return on equity (ROE) 8% guidance, an almost 50% discounted valuation of the cash held by Japanese companies, corporate value and ROE, equity spread as a key performance indicator for value creation, an optimal dividend policy based on optimal capital structure, risk-adjusted hurdle rates for value-creative investment criteria, and the synchronization of environmental, social, and governance with equity spread.

Illustrated with relevant statistics, evidence of shareholders' voices, case studies, and empirical research, the book is highly recommended for readers who seek qualitative and quantitative evidence of Japan's problems and potential prescriptions in connection with value creation.

This book empirically proves the relationship between non-financial capitals defined by IIRC and corporate value, and provides a convincing method to unlock corporate value in Japan via Abenomics corporate governance reforms. A must read!

Richard S. Howitt, Chief Executive Officer, International Integrated Reporting Council (IIRC)

This book addresses emerging issues such as the "Power of Intangibles" in addition to IMA-defined "Equity Spread" as a gauge for value creation from the viewpoint of management accounting. It is highly recommended for finance and accounting professionals.

Jeffrey C. Thomson, CMA, CAE. President and CEO, Institute of Management Accountants (IMA)

Introduces insider insight on Abenomics reforms, alluding to the Ito Review in connection with value creation in Japan, including the rationale of the Review's ROE 8% guideline Provides both empirical research as quantitative evidence and global investor surveys as qualitative evidence of Japan's corporate governance discount which has rarely been available so far] Proposes a concrete model of integration of ESG and ROE for the first time, with case studies and empirical research Shares breakthrough analysis of an original global investor survey conducted over a 10-year period

Autorentext
Ryohei Yanagi is Chief Financial Officer of Eisai Co., Ltd., one of the largest pharmaceutical companies in Japan. He is also Visiting Professor at Toyo University and Visiting Lecturer at Waseda University Graduate School of Accountancy, where he teaches corporate governance, corporate finance and investor relations. He earned his Ph.D. from Kyoto University. During the last 15 years, Dr. Yanagi has conducted approximately 3,000 meetings in the aggregate with global investors (about 200 meetings per annum) throughout his career with UBS as Executive Director and at Eisai as CFO. He was selected as the Best CFO in Japan's healthcare sector in 2016 and 2017 by the Institutional Investor magazine. He was also ranked in the Top 10 CFOs by Forbes Japan for the second consecutive year. In addition, Dr. Yanagi has served as advisor to the Tokyo Stock Exchange and the Ministry of Economy, Trade and Industry (METI), including the Ito Review. He is Secretary of the Institute of Management Accountants (IMA) Tokyo Chapter as a certified management accountant, and has written and published many books and theses on his research agenda.

Inhalt

1 Dawn of Corporate Governance: Japan must change.- 2 Cash Valuation Assessment of Japanese Corporations: When 100 yen is Valued at 50 yen.- 3 Abenomics Requires Enhancement of Corporate Value via ROE.- 4 Equity Spread and Value Creation.- 5 Value Creative Investment Criteria.- 6 Optimal Dividend Policy based on Optimal Capital Structure.- 7 Synchronization of Non-financial Capital and Value Creation: Japan should show ROE of ESG.- 8 Appendix: Latest investor Survey 2016 and 2017.- Index.