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2020 Japan Spencer Stuart Board Index

February 2021

Japan Board IndexThe Japan Spencer Stuart Board Index surveys and analyzes trends among Japanese companies and the issues faced by their corporate boards. The 2020 edition is the ninth in a series of reports first launched in 2013 in response to growing interest in the corporate governance of Japanese companies.

The index is an overview of the Japanese companies listed on the TOPIX 100 and Nikkei 225 indexes, and the year-by-year data enables comparisons and observations over time that reflect the true state of the Japanese companies.

Some trends from this year’s index include:

  • COVID-19 had a huge impact on economies and business activities around the world in 2020. In Japan, annual general meetings were postponed, and more than 40 companies whose financial year ends in March postponed their annual general meetings beyond July. Despite the unprecedented situation, Japanese trends suggest that increased interest in sustainable development goals and environmental, social and corporate governance (ESG) is supporting even stronger corporate governance.
  • The uncertainty of COVID-19 brought drastic changes to the business environment, amid growing uncertainty about the future. Conditions forced companies to make more rapid business decisions, which in turn drove digital transformation. Companies emphasized flexible, solid corporate governance to support their businesses, and an overall increase in the number of external director appointments was likely a factor behind these efforts. External directors now number 968 in Nikkei 225 companies, and 477 in TOPIX 100 companies. We expect that companies will take more strict measure to strengthen their corporate governance, with increasing focus not only on its governance framework but also its use in business practice.
  • Corporate boards in Japan are becoming more diverse. In particular, women and foreign nationals make up a steadily increasing proportion of board directors. 83.6% of companies on the Nikkei 225 index have appointed women to their boards, as have 89.0% of TOPIX 100 companies. This year, for the first time, more than 50% of TOPIX 100 companies have more than one woman on their boards. 23.6% of Nikkei 225 companies have foreign national directors, as do 38.0% of TOPIX 100 companies, a year-over-year increase for both index.