#Sustainability #Japan #Tokyo #Corporate Governance #HR Governance Leaders

Exploring the Latest Trends in Corporate Governance

In a rapidly evolving economic landscape, the concept of corporate governance (CG) has taken center stage in Japan, especially concerning enhancing companies' earning power. As part of these developments, HR Governance Leaders Inc. (HRGL), under the leadership of CEO Shigeru Utagasaki, has announced the launch of its 2025 Corporate Governance Survey. This initiative aims to gather comprehensive insights into current practices among Japanese companies, leveraging expertise from established academics such as Emeritus Professor Hideki Kanda of the University of Tokyo, Professor Katsuaki Kubo of Waseda University, and President Tsuyoshi Mizukami of Takasaki Economics University.

Background of Corporate Governance Reform in Japan

Since the inception of CG reforms in Japan approximately a decade ago, the focus has shifted from formality to substantive engagement, aiming to bolster the "earning power" of enterprises. With continuous discourse from the Ministry of Economy, Trade, and Industry (METI) regarding effective strategies for enhancing organizational earning power, guidelines were published in April 2025 providing a roadmap for integrating CG into the value creation narrative of companies. This underscores a pressing requirement for Japanese businesses to adapt and deepen their governance practices. In response to this momentum, HRGL's upcoming survey will expand its coverage, evolving from past governance surveys into a comprehensive CG Survey capable of furnishing the latest information regarding Japanese corporate practices.

Key Features of the 2025 CG Survey

Expert Supervision

HRGL's CG Survey will receive oversight from distinguished leaders in corporate governance. The entire survey will be under the overall supervision of Professor Kanda, who previously chaired METI's CG research committee. Additionally, the specific content of the survey has been refined and expanded under the guidance of the aforementioned experts, ensuring relevance and precision.

Inclusion of Sustainability Governance

In alignment with METI's recommendations, sustainability is poised to play a pivotal role in determining long-term corporate value. The introduction of a dedicated sustainability governance section within the survey marks a significant enhancement aimed at supporting enterprises in embedding sustainable practices within their operational frameworks. This section will explore best practices related to the establishment of sustainability committees, materiality solutions, and initiatives for making impacts visible.

Comprehensive Coverage of Governance Areas

The survey will extensively cover the five essential governance domains crucial for enhancing earning power: board governance, human capital, nomination, compensation, and sustainability. This holistic approach enables companies to deepen their integrated governance efforts, essential for fostering their earning power.

Intended Use of the Survey Findings

The report will be structured to deliver insights by domain, allowing companies to opt into specific areas of interest. Participants can utilize survey outcomes for diverse applications, such as:

• - Designing corporate governance frameworks within boards.
• - Identifying performance gaps between the current CG status and desired goals.
• - Evaluating the effectiveness of committees tasked with achieving sustainability strategies.
• - Revisiting operational frameworks and governance structures based on recommendations.
• - Conducting peer comparisons to gauge compensation levels and ongoing governance reform activities.
• - Strengthening the validity of compensation-related studies undertaken previously.

Participation Details for the 2025 CG Survey

Participation in the survey will be at no cost. The timeline includes:

• - Application Deadline: July 25, 2025
• - Response Submission Deadline: July 31, 2025
• - Results Presentation: Scheduled for October 2025 (online seminar)
• - Distribution of Reports: October 2025, with peer analysis report requests accepted until March 31, 2026.

Participants are encouraged to reach out to HRGL for further information regarding participation.

For additional details about the survey, visit: HRGL Corporate Governance Survey

Conclusion

HR Governance Leaders Inc. remains committed to advocating for sustainable governance practices by addressing the unique needs of client companies and facilitating their growth narratives. Through initiatives like the upcoming CG Survey, companies can take proactive steps toward strengthening their governance structures and, ultimately, their earning power.

About HR Governance Leaders Inc.

Founded in April 2020, HRGL is based in Chiyoda-ku, Tokyo, and offers consulting services across various governance domains, including sustainability and human capital management. For more information, visit: HRGL Official Website