Japan's revised corporate governance code is expected to encourage listed companies to redirect accumulated cash and deposits toward growth investments. The board of directors should constantly check whether cash and deposits are effectively used for investment, according to a draft of the code. The Financial Services Agency and Tokyo Stock Exchange are working on the revision, with the draft set to be presented at an experts' meeting by the end of this month.
The Financial Services Agency (FSA) and the Tokyo Stock Exchange (TSE) are revising Japan's corporate governance code to encourage listed companies to redirect their accumulated cash and deposits toward growth investments, sources said on Saturday. The draft of the revised code states that the board of directors "should constantly check whether cash and deposits are effectively used for investment."
This revision aims to promote better use of corporate funds to support economic growth. The FSA and TSE are currently working on the updates, and the draft is scheduled to be presented at a meeting of experts by the end of this month. The code serves as a framework to enhance corporate governance practices among Japanese firms.
