Carrots and sticks redux
We recently participated in a panel discussing corporate reform focusing on Japan and South Korea. As evidenced by the strong turn-out, interest in this topic is very high. In general, the panel was optimistic on the prospect of Korea corporate reform eventually replicating the success of Japan. While the Korean market naturally has its own long-standing and wellknown structural challenges – deriving mainly from the dominance of founding families – the significant rise in retail ownership in recent years should continue to incentivise politicians to push ahead with reforms even when faced with fierce resistance from entrenched interests. ... more
Engagement and activism may rebound
We looked at the Factset SharkWatch database, which tracks global activism campaigns for the last ten years. The dataset initially covered only US campaigns but in recent years has improved its non-US coverage to the extent that we believe it now provides meaningful statistics for Asia-Pacific.
The primary observation is that, while global activism has already started to rebound from the depths of the pandemic – rising 5.2% since 2020 – this growth has all been driven by campaigns outside Asia-Pacific. Figure 1 shows how Asia-Pacific activism (which accounts for around 17% of the total) is still down by 37% compared to 2020, even as the rest of the world has risen 13.7% (note that we considered only campaigns announced in January to May of each year, to make the results comparable across years). ... more
Engagement update
We have two situations which are public. The first is NBI Industrial Finance in India, a company which owns shares of a major listed cement company worth almost five times its market cap and which carries on almost no other business.
This month, we sent an open letter to the board which we also released to the press and uploaded to a dedicated website (link).
The letter was structured as a list of questions, in line with our policy of first seeking explanations for corporate behaviour before making our own suggestions.
In the first instance, we are asking: ... more