Key Takeaways: Glass Lewis 2026 Benchmark Policy Updates and Shareholder Activism in Japan

Recently, Naoko Ueno, Vice president, Research and Engagement at Glass Lewis Japan, shared valuable insights into the evolving expectations of proxy advisors and investors in the Japanese market. 

To better Understand the 2026 Policy Revisions Ms. Ueno outlined the rationale behind the latest updates to Glass Lewis’s benchmark policies, highlighting the underlying principles and drawing comparisons with global governance standards. The revisions reflect a continued push toward stronger governance practices and greater alignment with investor expectations. 

Gender Diversity 

• Prime Market companies are expected to have at least 20% gender diversity on their boards.  
• Standard Market companies are expected to have at least one director of a diverse gender.  

Independence and Tenure 

• A tenure of 12 years or more for outside directors and auditors may be viewed as compromising independence.  

Rising Shareholder Activism 

The session also highlighted a notable increase in shareholder activism in Japan. Glass Lewis supported approximately 45% of shareholder proposals submitted up to March, significantly higher than the typical annual average of 12–13%. While this figure is expected to normalize once June AGM data is included, it underscores a growing willingness among investors to challenge companies. 

With recent revisions to the Corporate Governance Code (Japan), the volume of shareholder proposals is expected to remain elevated. Importantly, the quality and narrative behind proposals are becoming increasingly influential, making it critical for companies to strengthen their communication and engagement strategies. 

Proactive Governance and Investor Engagement 

To mitigate the risk of shareholder proposals, companies are encouraged to: 

• Address key priorities set by the Tokyo Stock Exchange, including capital efficiency (e.g., PBR) and balance sheet optimisation  
• Enhance transparency around strategy and capital allocation  
• Engage in ongoing, meaningful dialogue with shareholders  

Looking Ahead: Changes to Glass Lewis Policies in 2027 

A significant shift is expected in 2027, when Glass Lewis plans to move away from a single benchmark policy. Instead, it will introduce multiple benchmark frameworks (3–4 variations), each reflecting different investor perspectives. Voting recommendations will be provided under each framework. 

This development will make it increasingly important for companies to: 

• Understand the composition of their shareholder base  
• Tailor engagement strategies to different investor types  
• Strengthen shareholder identification efforts