Japan Shareholder Rules Tightened as Companies Push Back Against Activism

Japan shareholder rules are set to tighten as policymakers respond to growing pressure from activist investors.

Lawmakers from the ruling party plan to propose higher thresholds and limits on shareholder proposals involving business execution, with recommendations expected to be submitted next month.

Currently, investors can submit proposals after holding either 1% of voting rights or 300 voting units for six months, a requirement critics say has become easier to meet due to stock splits and smaller trading lots.

Activist proposals reached a record 52 companies last June, up from 46 a year earlier.

While some investors warn that stricter Japan shareholder rules could slow corporate reform, business groups argue the changes are necessary to curb excessive or disruptive proposals and allow management to focus on long-term growth strategies.