Institutional Investors in Japan
Activism has grown in volume and impact in Japan where global activists, specialized
boutiques, and local investors forge campaigns against an increasing number
of Japanese corporates. For institutional investors, this activity should present
a welcome market force to a region that has been slow to keep up with global
governance standards and therefore slow to practically recognize the full rights of
minority shareholders.

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Shareholder Advisory Firm
SquareWell specializes in monitoring investor behavior and preferences to support listed companies across the world to "focus on what matters".

Our investor-focused advice, grounded in precedent and facts, facilitates a strategic and tactical approach to Governance issues faced by management and the board in support of their business goals. SquareWell also assists companies in increasing their Return on Engagement (ROE).
Why “ESG” Needs a Rethink - Client Memo
The term “ESG” has unintentionally led market players to treat "Environmental”, “Social” and “Governance” issues on an equal footing and the current organisation of the acronym often leads to the two megatrend “Environmental” and “Social” topics overshadowing “Governance”. As the market matures to evaluating companies based on how “Environmental” and “Social” factors are integrated into corporate strategy, we view a similar maturity developing in the separation of “Governance” from the “ESG” acronym.

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Activists GO BIG
SquareWell analyzed activist campaigns at the largest companies since 2019. The review focuses on those campaigns that escalated to challenge management proposals or the submission of shareholder proposals.

Campaigns typically have varied rationales that manifest themselves into one or many demands; however, we see activists focusing on two broad themes: (i) influencing future decision-making by altering the board dynamics, or (ii) opposing the strategic decisions made.

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Increased stewardship activity leads to greater accountability

Increased stewardship activity leads to greater accountability

Evolving regulatory requirements and the pressure to deliver sustained returns in an extremely competitive environment has led investors to increasingly monitor extra-financial factors alongside financial performance.

The integration of “Environmental” and “Social” issues, on top of “Governance” issues, in investment decisions has moved from a ‘nice to have’ to a basic requirement for many asset owners. Asset managers are now held accountable by their clients to evidence how they use extra-financial identify opportunities, manage risks and have an impact. Moreover, for investors, stewardship is no longer just about voting. It means monitoring and engaging with companies on issues ranging from capital allocation to climate change.

For companies, on the otherhand, the challenge is to understand how each investor exercises their rights and responsibilities which are not yet homogenous. Boards and management teams are now under constant pressure to demonstrate how their strategic decisions aim to create value for stakeholders while reducing their negative externalities. Failure to effectively communicate the long-term impact of those decisions makes a company more vulnerable to threats posed by investors, competitors, and other market participants.

Our Approach

Irrespective of a company’s ownership structure, we are involved when director and management accountability is in focus.

We support our clients’ decision-making processes throughout the year, by monitoring shareholder behavior and preferences, and by anticipating emerging trends in “Governance” as well as “Environmental” and “Social” practices and disclosures.

Our work begins with understanding our clients and their relationship with their investors. We conduct an in-depth review of each client’s strengths and any challenges it faces with respect to the responsibility it has to its shareholders. This diagnostic exercise alerts our clients to what matters to their investors.

SquareWell seeks to recreate the public squares of the past, enabling companies and shareholders to gain an unfiltered understanding of each other in neutral territory, which helps establish goodwill and trust. Our clients are supported with developing a narrative with impact, and enter fully prepared into a meaningful dialogue with their shareholders.

Analyze
Engage
Communicate
Decide
Advise

As a leading shareholder advisory firm, our ability to analyze and interpret market feedback, supported by our proprietary knowledge management tool, allows us to provide investor-focused advice, grounded on precedent. This, in turn, helps maximize investor support in high-stake votes and avoids contested situations.

The Progress Group

Driving progress by sharing knowledge and experience with the market.

We believe that all stakeholders in the financial market can drive progress and positive change. In particular, we think that when diverse stakeholders participate in thoughtful discussion and debate, great ideas are generated. That is why we consider it imperative that stakeholders have opportunities to come together, discuss issues, and share their knowledge and experience with the market.

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Catch up with SquareWell’s media coverage and find news about forthcoming events SquareWell is hosting or attending.
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