On June 1, 2018, the Tokyo Stock Exchange ("TSE") announced revisions ("Revisions") to the Corporate Governance Code ("CG Code"). The CG Code provides principles of corporate governance for companies listed on the TSE and came into force in June 2015 (for details of the original CG Code, please see Jones Day Commentary, "Japanese Corporate Governance Is Changing with the Adoption of a New Code in 2015"). The Revisions, which are based on proposals made by a council of experts for which the Financial Services Agency of Japan ("FSA") and the TSE acted as joint secretariats, were intended to deepen and make more substantive Japanese corporate governance reform through engagement between investors and companies.

Under the revised CG Code, a listed company is required, among other things: (i) to disclose, if the listed company holds shares of other listed companies for reasons other than pure investment purposes, its policies regarding the reduction of such cross-shareholdings; and (ii) to appoint or dismiss its CEO using objective, timely, and transparent procedures. Listed companies need to update their corporate governance reports in accordance with the Revisions and file the reports immediately after their preparation, but no later than December 31, 2018.

The Revisions will inevitably affect corporate governance of listed companies and will, therefore, impact not only listed companies but also their investors.

In addition, on June 1, 2018, the FSA published "Guidelines for Investor and Company Engagement" ("Guidelines") providing agenda items for engagement on which institutional investors and companies are expected to focus. The Guidelines are intended to supplement the CG Code and the Stewardship Code and to encourage the effective implementation of both.