The Financial Services Agency and the Tokyo Stock Exchange on Tuesday released an updated version of the country¡¯s corporate governance code, calling on executives to spend more on projects aimed at promoting growth.
The revised code urges boards of directors at publicly traded companies to constantly examine whether resources such as cash and deposits are allocated appropriately.
Instead of focusing on short-term shareholder returns such as share buybacks, boards of directors are asked to spend more on research and development and mergers and acquisitions.
Financial Services Minister Satsuki Katayama said at a news conference that the update is designed to ¡°help companies work on improving their value in the medium to long term.¡± The governance code was revised for the first time in five years.
The revised code also calls on boards of directors to consider ways to address risks of cyberattacks, supply chain disruptions and technology information leaks.
The code calls for securities reports containing financial information to be disclosed before shareholders¡¯ meetings.
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