The Japanese Stewardship Code: Compliance and Outcomes

2019 Fiscal Year Final Research Report

• Project/Area Number: 17K04041
• Research Category: Grant-in-Aid for Scientific Research (C)
• Allocation Type: Multi-year Fund
• Section: 一般
• Research Field: Accounting
• Research Institution: Hitotsubashi University
• Principal Investigator: Routledge James 一橋大学, 大学院経営管理研究科, 教授 (50771268)
• Project Period (FY): 2017-04-01 – 2020-03-31
• Keywords: Stewardship / Institutional investors / Governance

Outline of Final Research Achievements

The aims of this research have been achieved. First, the research has documented compliance by investor companies with the ‘Principles of Responsible Investing (the Code) issued in 2015 by the Financial Services Agency (FSA). Data from Code disclosures for 2015 to 2017 have been obtained. Detailed information from Code disclosures has been used to develop a disclosure score index. This part of the study provides valuable information on institutional investors’ response to the Code’s implementation and the nature and extent of their compliance.
Second, the study has assessed if the Code has influenced Institutional investor stewardship. Analysis conducted has examined the association between investor Code compliance and investee company outcomes, using measures of reported earnings quality and audit fees. The results show that Code compliance by institutional investors is positively related to investee company outcomes.

Free Research Field

社会科学

Academic Significance and Societal Importance of the Research Achievements

The study shows the Code’s beneficial effect on the governance role of institutional investors. Dissemination of findings through publications and presentations has supplied data about the Code’s regulatory approach. This is important because of limited prior analysis of stewardship regulation.