Can the world’s largest pension fund, Japan’s GPIF, be a responsible steward? Stewardship responsibility as asset owner

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Akio Otsuka


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The number of institutional investors has seen a marked increase in the past few decades. For the purpose of the long-term economic success of portfolio companies, it is crucial to encourage investee companies to establish better corporate governance structure within them. The U.K. and Japan introduced the Stewardship Code, and the Government Pension Investment Fund (GPIF) of Japan defines itself to fulfill its roles and responsibilities as an asset owner in line with Japan’s Stewardship Code. However, passive funds that have occupied a large share of the market have no financial incentive to incur the costs for engagement with investee companies. The purpose of this article is to review the two Stewardship Codes, the stewardship structure, policies of the GPIF that has accepted Japan’s Stewardship Code, and to explore how the GPIF fulfills its stewardship responsibility, based on the Japan’s Code, requires its external asset managers to comply with its stewardship principles and continuously monitors the stewardship activities of asset managers. The findings are that continually improving stewardship and engagement by utilizing the PDCA cycle, the GPIF can be a responsible steward in the Japanese market.

Keywords: Stewardship Code, Corporate Governance, Passive Funds, Engagement, Asset Owner, Asset Manager

Authors’ individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.

Declaration of conflicting interests: The Author declares that there is no conflict of interest.

Acknowledgements: This paper is made by a Grant-in-Aid for Scientific Research from “Japan Society for the Promotion of Science”.

JEL Classification: K22, M14, M21

Received: 19.02.2020
Accepted: 07.04.2020
Published online: 15.04.2020

How to cite this paper: Otsuka, A. (2020). Can the world’s largest pension fund, Japan’s GPIF, be a responsible steward? Stewardship responsibility as asset owner. Journal of Governance & Regulation, 9(1), 44-52.