IR policy disregarding communication with shareholders | 蝶理の株主価値向上に向けて
What we hope Chori to increase the shareholders' value as a shareholder are
1.Drastic increase in dividend / share buyback to prevent further lowering of ROE
2.Dissolution of cross-shareholdings
3.Transform to a board led by independent outside directors

IR policy disregarding communication with shareholders

We have proposed a meeting to CEO and independent outside directors of Chori for many times.
From the viewpoint of parent-subsidiary listings, independent outside directors of a subsidiary are strongly expected to increase interests of minority shareholders, that is, the value of the subsidiary. For a shareholder of a subsidiary like Chori, who cannot rely on the governance by parent company, the behaviour of independent outside directors is crucially important.

We received an answer from Chori rejecting our proposal for a meeting in March 2019 as followings.

The board confirmed that 1) the director in charge of IR deals with all the matters including communication with shareholders and 2) the board refuses to accept particular meeting with individual shareholders.

This shows that independent outside directors, who are expected to be “independent”, follow the decision of the board refusing to meet shareholders. We strongly doubt that such “independent” outside directors, who prioritise the policy of the company and the major opinion of the board more than their own opinions, could fulfil the appropriate role as expected.

Corporate Governance code principle 5 states “companies should engage in constructive dialogue with shareholders even outside the general shareholder meeting” and “the senior management and directors, including outside directors, should listen to the views of shareholders and pay due attention to their interests and concerns”.
Considering the situation, the board made a decision that CEO and independent directors do not meet shareholders, we have to say that the attitude of the board contradicts the idea of Corporate Governance code that is to increase shareholders’ value.

Corporate Governance code principle 4.7 also states “(one of the roles and responsibilities of independent directors is expected as) Appropriately representing the views of minority shareholders and other stakeholders in the boardroom from a standpoint independent of the management and controlling shareholders.”. It is hard to imagine how such independent outside directors, who don’t even listen to the views of shareholders, can reflect the opinions of minority shareholders to the board meeting appropriately.

Chori does not state anything about principle 4.7 in its Corporate Governance Report. This means that Chori complies the principle.
The problem is not just the fact that Chori refuses the meeting with shareholders. There is a serious concern that Chori’s independent outside directors are reluctant to fulfil the role stipulated in Corporate Governance code, or even worse, misunderstand that they have already fulfiled the role under the present circumstances.

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