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2019 Japan Spencer Stuart Board Index

Japan Board IndexThe 2019 Spencer Stuart Japan Board Index analyzes the boards of companies listed on the Nikkei 225 and TOPIX 100 indexes and offers insights into the issues boards are facing and comparative data from other countries. To view the Japanese version, click here.

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  • The Revised Companies Act and Corporate Governance Code of May 2015 introduced the audit and supervisory committee as a third option to enhance the board’s supervisory function, in addition to the audit and supervisory board and the nominating committee. Almost five years since the law’s revision, the majority of both Nikkei 225 companies and TOPIX 100 companies still have a board of corporate auditors.
  • Nikkei 225 companies have 875 external directors and TOPIX 100 companies have 428, both numbers an increase over last year. The ratio of independent directors among external directors is 97.1% for Nikkei 225 companies and 99.1% for TOPIX 100 companies, and independent external directors with no conflict of interest continue to establish a stronger presence in both indexes.
  • Companies that have two or more independent outside directors are now at 100% for both Nikkei 225 companies and TOPIX 100 companies, as all companies have now achieved the specific figures required by the Corporate Governance Code for outside directors.
  • Foreign directors have been appointed at 20.9% of Nikkei 225 companies and at 29.7% of TOPIX 100 companies, close to last year’s levels excluding the effects of stock replacement. The ratio of foreign nationals on boards increased slightly to 3.5% for Nikkei 225 companies and 5.1% for TOPIX 100 companies. However, compared to France (36.6%), the UK (33.2%), Germany (31.5%) and the United States (8%), Japan remains at a low level.
  • The percentage of female directors continues to increase steadily, with 70.7% of Nikkei 225 companies and 77.2% of TOPIX 100 companies having at least one female directors. However, it remains well below France, the UK, the United States and Germany, which are close to 100%. The percentage of female directors on the Board of Directors is 8.8% for Nikkei 225 companies and 9.9% for TOPIX 100 companies, compared to more than 20% for the above four countries.
  • When looking at the background of outside directors, almost half of Nikkei 225 companies and TOPIX 100 companies are from business companies. Of those, 70% have experience as president, chairman or CEO.