Daniel Leussink
TOKYO (Reuters) – Nearly all Japanese companies surveyed in a monthly Reuters corporate survey view the Tokyo Stock Exchange’s planned requirement that top firms disclose key financial reports in English as a burden.
Most companies are still considering whether to take steps such as improving shareholder returns in response to the TSE’s efforts to improve capital efficiency, a survey showed on Thursday, highlighting pressure on listed companies amid growing scrutiny.
The TSE, part of the Japan Exchange Group, is promoting improvements in corporate governance to help listed companies become more attractive to both domestic and foreign investors, including through the launch of its Prime Market in April 2022.
Other measures include a call in March 2023 for disclosure of long-term capital efficiency plans, especially if a firm’s shares are trading below book value.
In an April Reuters poll, 91% of respondents said disclosing information in English was a burden.
Just over half of respondents said they plan to have a disclosure system in both Japanese and English by April 2025, when bilingual disclosure will become a requirement for about 1,600 firms in the primary market.
More than a quarter of respondents said it would be difficult to meet such a requirement by then, and just under a fifth said they already had a system in place.
The survey found that 53% of respondents were still considering measures in response to the capital efficiency campaign, while 23% said they had fully responded and a further 22% were not included in the list. The share of those who did not take the answer into account was 3%.
In terms of such measures, the survey found that just over half of companies said they would step up investor relations activities or invest in growth over the next six months.
Another 48% hoped to improve shareholder returns, and about a quarter of respondents said they would restructure their business portfolio.
The latest survey also found that 87% of companies felt or expected to be impacted by the new annual overtime restrictions for truck drivers that went into effect April 1.
The government has capped truck drivers’ annual overtime at 960 hours in a bid to improve working conditions and make the job more attractive.
Nearly two-thirds of respondents are considering working with shipping companies to solve this problem, while 57% are willing to reconsider delivery routes and schedules, and another 47% plan to pass on costs through higher prices.
The poll was conducted by Reuters Research April 3-12. The companies responded on condition of anonymity to allow them to speak more freely.
A total of 400 firms were surveyed, with responses ranging from 164 to 228 depending on the question.