Japan Regulator Wants Bigger Role for Independent Directors

Japan’s financial regulator is urging independent directors to be more active in challenging management on growth strategies and enhancing profitability, part of the country’s efforts to boost shareholder value.

Regulators want independent directors to “play the role expected of them,” Hitoshi Hirokawa, a senior Financial Services Agency official, said in an interview. He also said that asset managers should keep companies on their toes through greater engagement.

Emulating practices in the US and Europe, Japan has introduced a series of corporate governance measures in recent years. These include mandating outside directors to make management more responsive to investors ...