会社概要
What we hope Tosho to improve the shareholders’ value as a shareholder are 1) improvement of its extremely low operating profit margin through reconsidering mid-term management plan and investment plan and 2) Special dividend funded by disposal of RECRUIT shares to optimize excess net assets.

Negative effect due to parent-subsidiary listings

On 22nd June 2018, Corporate Governance System Study Group, led by the Ministry of Economy, Trade and Industry, announced a document specifying as follows: –
– In the discussion of Legislative Council of the Ministry of Justice, the majority approved that directors of a parent company have an obligation to administrate its subsidiary companies’ shares as assets.
– There is a consensus that it is a duty of directors of a parent company to supervise its subsidiaries.
This surely applies to Toppan and Tosho. Directors of Toppan have an obligation to supervise Tosho.

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Clearly, it is a negative effect of parent-subsidiary listings that an opinion of subsidiary’s shareholders is neglected because a parent company like Toppan lacks awareness of responsibility for the supervision of its subsidiary’s governance.

This obligation of parent company’s directors overlaps with that of stewardship for institutional investors who invest in the subsidiaries. Therefore, the parent company’s directors can fulfill their obligations for the supervision of its subsidiary’s governance via positive dialogues with institutional investors above.

As stated above, our proposals got almost 40% favor votes at the AGM in June 2018 by excluding the parent company’s vote.

The supplementary principle 1.1.1 in the Corporate Governance code set as following: –
– When the board recognizes that a considerable number of votes have been cast against a proposal by the company and the proposal was approved, it should analyze the reasons behind opposing votes and why many shareholders opposed, and should consider the need for shareholder dialogue and other measures.

This principle’s “proposal by the company” can be replaced as “proposal by the shareholders” and “opposing votes and why many shareholders opposed” as “favor votes and why many shareholders agreed”. Therefore, the board of Tosho should consider the opinion of minority shareholders seriously.

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