Looking at the agenda for this year’s meetings, you may have noticed that there is a trend to　respond　favorably to shareholders and investors, as seen in the fact that of the many companies that had put　anti-takeover measures in place, nearly thirty have decided to abolish them, or move towards doing so.　But on the other hand, strikingly, there seem to be 5+ companies that are still trying to put new　anti-takeover measure in place. From the outside we can only guess at what the individual situations　are, and I’m sure management must have its own good reasons, but there is nevertheless an　anachronistic feeling.

Implementation of anti-takeover measure might in a way, give somewhat positive impression to　shareholders (I know I am stretching a bit too far on this)due to lowering of risk that may　arise from　discontinuity of current managementteam. Increased predictability of the corporate strategy is good as　long as the strategy seem to maximize shareholder value. However the counter argument is that with　the implementation of anti-takeover measures, it casts serious threat to market mechanism as　preventing the free trade of securities would increase the risk of management starting to pursue their　own interest rather than shareholder value, widely known as agency problems. As we all know, devils　whisper to us every day. Even in Japan, after a few years of tug-of-war it has become a consensus that　overall, anti-takeover measure has a negative impact on long term shareholder value, evidenced by　most of the publicly announced voting guidelinesby many pension funds and money managers clearly　stating to vote against the measure (and still five+ companies introduce the measure).

Now here is the difficult question. Judging whether the management is undoubtedly putting the　best　effort to increase the long term shareholder value or not should of course not be judged just by recent　quantitative figures of the company. But because intrinsic shareholder value cannot be measured by　simple procedures, management must interact with shareholders and investors and explain with　sincerity and investors need to listen to what they are saying in order to make prudent investment　decisions for their clients. If, for example, implementation of anti-takeover measures may limit the　chance of constructive interaction between management and investors, this could result in lesser　reliable information, and thus increased risk for shareholders and　investors. In the end, it is likely to　result in perpetual undervaluation of the company.　In my personal, perhaps somewhat extreme opinion, if managers are considering setting up takeover　defenses for their company, I feel they should also consider more radical solutions such as a　management buyout or other forms of going private assuming the aim to introduce such measure is　to　limit the noise that may arise from having many differentnoisy shareholders. By becoming a full　subsidiary of a parent company, or going under the umbrella of a certain company or patron, or just　buying it for yourself (yes this is the MBO),the management will free themselves up from being　obligated to explain details to many different parties and can focus on a selected shareholders to fulfill　their accountability obligation. This should clearly enable the management and employees to focus on　their real jobs and goals, resulting, hopefully, in better shareholder value and growth prospects.

In any case, it is extremely encouraging that the overall trend we see is anti-takeover measures being　torn down, many more companies setting up non-statutory committees, more outside directors being　nominated, and more managers coming directly to terms with the significance of being a public　company and striving to increase corporate value. It is wonderful that at the same time equity-based　compensation is becoming more common, and it is taken for granted that directors should be rewarded　based not just on their responsibilities but on the outcome of their efforts. It is my fervent hope that this　trend grows in strength and breadth, and I myself will exert my utmost efforts to promote it.