- Announcement of Vice Chair Candidates
- Economic Situation
- Revision of the Companies Act
- Premium Friday
- Japan-US Relations
- North Korean Situation
Announcement of Vice Chair Candidates
Today I provisionally nominated vice chair candidates to be formally appointed at the General Assembly meeting on May 31. Current vice chairs Hiroaki Nakanishi, Yasushi Kimura, Hiroo Unoura, and Nobuyuki Koga will step down on that date. Four new candidates have been put forward: Shuzo Sumi, Chairman of the Board, Tokio Marine Holdings, Inc.; Tetsuro Tomita, President and CEO, East Japan Railway Company; Shinya Katanozaka, President and CEO, ANA Holdings, Inc.; and Tsutomu Sugimori, President, JXTG Nippon Oil and Energy Corporation. These vice chair candidates have participated in and contributed to Keidanren's activities. They have been selected based on overall assessment of their characters, knowledge, management skills, and industry achievements.
Despite significant volatility in financial markets, economic circumstances and corporate results remain favorable in Japan and throughout the world. The recent market turbulence is not the result of any change in economic fundamentals. At present there is no need to swing between optimism and despair. I take a level-headed view of this volatility as a correction following the relentless rise in markets since the beginning of the year.
Against this backdrop, spring labor-management wage dialogues are gaining pace, and wage increase negotiations will be based on actual and projected corporate performance. Most corporate executives share my level-headed view of recent financial market volatility, and I regard its impact on wage talks as extremely limited.
Revision of the Companies Act
A key focus of revisions to the Companies Act is placing an upper limit on the number of proposals that shareholders may submit. Under the current system, shareholders with more than 1% of voting rights, or more than 300 votes, may submit any number of shareholder proposals. Although general meetings of shareholders are forums for canvassing a wide range of shareholder views, there have been cases where shareholders with minimal voting rights have submitted a huge number of proposals, inevitably taking up a great deal of time at general meetings. Keidanren considers rationalization of shareholders' rights to submit proposals as desirable, and hopes to see this aim achieved.
However, Keidanren takes a different view on another focus of revisions, namely mandatory appointment of outside directors. Prompted by the Corporate Governance Code applicable since 2015, almost all companies listed on the first section of the Tokyo Stock Exchange now have outside directors in place. Given this situation, there is no need for a new legal obligation.
Awareness that the last Friday of each month has been designated as Premium Friday continues to grow, and the initiative is becoming more widespread. The goal was to alter lifestyles and ways of working, which would stimulate consumption. Although consumption is rising on Premium Friday in some large cities, the effect has not fully expanded at the national level. We must take the first anniversary of the initiative as an opportunity to boost activities. As well as asking the Ministry of Economy, Trade and Industry to promote Premium Friday, the business community will play a more active part. Some businesses have voiced strong opinions that month-end is a difficult time for employees to take time off, but service providers such as department stores and other retailers favor this timing on the grounds that holding Premium Friday after monthly wages are paid links directly to consumption. The first anniversary of the initiative should also offer a chance to discuss this point.
Japan's partnership with the United States is our most important bilateral relationship, and during my term as Keidanren chairman I have strengthened economic diplomacy between our two countries. Driven by an urgent sense that conduits between Japan and the US had narrowed at various levels, I have strived to open up channels of communication. Over the last three years Keidanren has dispatched seven business missions to the US, and we will send another in May this year. Valuing dialogue with state governments as well as federal government, we have visited 14 states so far. The mission in May is scheduled to visit two states.
On our visits, we will emphasize the following three points. Firstly, having overcome a period of friction in Japan-US economic relations, our two countries are now building a cooperative, win-win relationship. Japan used to export briskly to the United States, but now Japanese companies have established businesses within the US, and contribute to the local economy and community as good corporate citizens. Some 3,800 US affiliates of Japanese companies have invested a total of more than 40 trillion yen in the country, and directly and indirectly they have created 1.6 million jobs. I feel that the federal and state governments have developed an accurate understanding of the major contribution that Japanese companies make. We will continue to highlight and disseminate information on this point.
Secondly, we will stress the importance of free trade. At a time when the US has withdrawn from the Trans-Pacific Partnership (TPP) and is reviewing the North American Free Trade Agreement (NAFTA), we will advocate free trade. We need to underline the economic and strategic significance of TPP, and the necessity of the NAFTA framework to the US.
Thirdly, we will form new networks. Our missions in 2015 and 2017 shared the views and position of the Japanese business community with members of the US Chamber of Commerce and the Japan-U.S. Business Conference, and sought their understanding. Such efforts are an important way of increasing the number of people who understand and support Japan at various levels in the US, and of using these networks to build strong relations.
North Korean Situation
The most pressing issue is to steadily achieve denuclearization. To this end, the international community needs to cooperate in continuing to impose powerful economic sanctions. I am aware of diplomatic efforts to relieve tension, such as the formation of a joint North-South Korean team at the Pyeongchang Winter Olympics, but this must be regarded as a separate issue from denuclearization in North Korea. Everyone longs for the Korean people in the north and the south to be reconciled and reunified, but the most crucial issue is North Korean denuclearization. From this perspective, I support the current fundamental stance of the Japanese government.