Better Corporate Governance in Japan Pays Off for Investors (1)

Japan’s benchmark index hit a record earlier this year supported by a key pillar — better corporate governance.

The country’s government has been encouraging companies to improve their focus on shareholders for the better part of a decade. The trend got a major boost two years ago when the Tokyo Stock Exchange also started pressuring company executives to boost returns for shareholders.

Japanese companies are returning more cash to shareholders, have boosted the number of women on corporate boards, have grown more open to working with activist investors and they have whittled away at their penchant for cross-shareholding. Additionally, investors ...