Follow-up of Market Restructuring
On March 31, 2023, Tokyo Stock Exchange (TSE) requested that all listed companies on the Prime and Standard Markets take "action to implement management that is conscious of cost of capital and stock price."
| Action to Implement Management that is Conscious of Cost of Capital and Stock Price (published on March 31, 2023) |
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List of Companies That Have Disclosed Information
In consideration of the high interest shown by domestic and foreign shareholders and investors in companies' response to the reques, in January 2024, TSE has begun publishing a list of companies that have disclosed information in accordance with the request to inform investors of who is taking action, thereby encouraging companies to make a proactive effort. In January 2025, TSE has revised and begun publishing a new list in order to better support listed companies that are proactively working to implement said management.
<Contents of the Revision>
- Add a "Date of disclosure update" column for companies that have disclosed updates to the status of their initiatives
- Add columns for companies that wish to be contacted by institutional investors
- Set a time limit (6 months) for "Under Consideration" status and require companies "Under Consideration" to explain their status
This list is updated monthly based on the status as of the end of the month.
| [New Format] List of Companies That Have Disclosed Information Regarding "Action to Implement Management That Is Conscious of Cost of Capital and Stock Price" (as of the end of May 2025) |
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| [Appendix] Status of Companies' Responses as of the end of May 2025 |
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(Note)
- ･The past lists are available on the sheets "Ref. List (MM DD, YYYY)" in the Excel file above.
(Note)
- ･For more information on the revision of the list, please refer to the following document
| Revision of the List of Companies That Have Disclosed Information Regarding "Management That Is Conscious of Cost of Capital and Stock Price" (published on September 27, 2024) |
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Scope of Companies on the List
The disclosure status of Prime-listed and Standard-listed companies on the list is determined as follows based on the selection made by each company in the sub-section "Content of Disclosure" of the section "Action to Implement Management That Is Conscious of Cost of Capital and Stock Price" in the company's most recently submitted Corporate Governance Report as of the time when the data was collected.
- If "Disclosure of Initiatives (Initial)" or "Disclosure of Initiatives (Update)" was selected, the company's disclosure status is listed as "Disclosed."
- If "Disclosure of Consideration Status" was selected, the company's disclosure status is listed as "Under Consideration."
- - If "Disclosure of Initiatives (Update)" was selected in the sub-section "Content of Disclosure," the date of the disclosure's update is indicated in the "Date of disclosure update" column on the list.
- If "Available" was selected in the sub-section "Availability of English Disclosure," the "English disclosure" column on the list will be set to "Available."
- In order to encourage companies to be proactive about consideration, TSE set the period of time that companies "Under Consideration" are included in the list to up to 6 months. Companies "Under Consideration" as of December 31, 2024 will be included in the list up to the end of June 2025, and new companies "Under Consideration" in January 2025 or later will be included in the list for up to 6 months after becoming "Under Consideration", and thereafter they will not be included in the list.
| Reminder Regarding the Criteria for Inclusion in the List of Companies That Have Disclosed Information Regarding "Action to Implement Management That Is Conscious of Cost of Capital and Stock Price" (published on March 29, 2024) |
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Key Points and Examples Considering The Investor’s Point of View
In light of the expectations from many shareholders and investors in Japan and overseas for further progress in companies' initiatives, on February 1, 2024, TSE compiled and published the following report for listed companies in order to provide listed companies with reference material. This report is based on interviews with many investors in Japan and overseas, including a summary of the key points of initiatives that investors expect from companies, and also examples of initiatives that investors deemed as fulfilling these expectations.
On November 21, 2024, TSE has compiled and published a new set of "Cases Where Companies Are Not Aligned With Investors' Perspectives" for companies to use as a reference when reviewing and improving their own initiatives. In addition, TSE has expanded the key points and examples in "Key Points and Examples Considering the Investor’s point of view," which was released in February, 2024, based on recent feedback from investors.
- Latest Edition (published on November 21, 2024)
| Document 1 How to use Points and Case Studies |
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| Document 2 Cases Where Companies Are Not Aligned With Investors’ Perspectives |
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| Document 3 Key Points Considering The Investor’s Point of View |
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| Document 4 Case Studies (Prime Market) |
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| Document 5 Case Studies (Standard Market) |
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| Document 6 Reference material (Stock Prices After the Request) |
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- First Edition (published on February 1, 2024)
| Key Points and Examples Considering The Investor’s Point of View in Regard to Management Conscious of Cost of Capital and Stock Price |
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| [Appendix] Case Studies |
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- From the viewpoint of implementing management that is conscious of cost of capital and stock price, TSE requests that listed companies conduct a series of actions on an ongoing basis. This starts with gaining a proper understanding of their cost of capital and profitability based on the balance sheet, and continues with analyzing and assessing the current situation around these and the market valuation at board meetings, preparing and disclosing plans for improvement, and then using dialogue with investors to update them on the progress of these efforts.
Note: This request targets all listed companies on the Prime and Standard Markets.
- Through conducting these actions, it is expected that, based on the basic management policy established by the Board of Directors, the management team will take the lead in appropriately allocating resources with sufficient consideration of cost of capital and profitability. This could be by pushing forward initiatives such as investment in R&D and human capital that leads to the creation of intellectual property and intangible assets that contribute to sustainable growth, investment in equipment and facilities, and business portfolio restructuring.
- While share buybacks and dividend increases are considered effective means of improving profitability, if shown as such by the company's analysis of whether the balance sheet effectively contributes to value creation, TSE is not necessarily expecting companies to use only these or solve issues with a one-off response. Efforts are expected on a fundamental level to attain profitability in excess of cost of capital on a sustained basis and achieve sustainable growth.
(Note)
- ･Since analysis and discussion of the current situation must be carried out sufficiently before planning and disclosure can begin, TSE is not specifying a timeframe for the start date of disclosure, but requests as prompt a response as possible.
- Publication of a List of Companies That Have Disclosed and Notes on the Request notified to listed companies on October 26, 2023
| TSE to Publish a List of Companies That Have Disclosed Information Regarding "Action to Implement Management That Is Conscious of Cost of Capital and Stock Price" (notified to listed companies on October 26, 2023) |
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- Future Initiatives as of August 2024
| Future Initiatives Regarding "Action to Implement Management that is Conscious of Cost of Capital and Stock Price" (published on August 30, 2024) |
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| [Appendix 1] Listed Company Action Status |
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| [Appendix 2]Interviews with Investors, etc. |
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| [Appendix 3] Initiatives by Listed Company Support Group |
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