In post-World War II Japan, firms have been “unabashedly employee-centric rather than shareholder-centric”, says JC de Swaan in The Wall Street Journal.
Japanese firms tend to hoard cash and don’t make their shareholders’ money work hard enough. Return on equity (ROE), a gauge of profitability that measures net income as a percentage of shareholders’ equity, is around half global levels in Japan.
In the past, managers have shrugged off pressure from institutional investors to boost ROE by handing back surplus cash in the form of dividends and share buybacks. But things are starting to change.
Last year, a [...]
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