Academic Track:09 Academic Research and InsightApplication of XBRL toproxy voting-- what are the chances?! --Nomura Research Institute, Ltd.Data Analyst Chie Mitsui
Contents for Today’s Session• Shareholder voting by Institutional Investors• Current issues of Proxy Voting in Japanese companies• Screening approach• Feasibility of screening with XBRL for Proxy Voting• Feasibility of two monitoring using XBRL• What We Can Expect?• What’s the Next Step?About Nomura Research Institute；A research institute which is a member of a group companies in financial sectors.Nomura security broker was a parent company before we went to public TokyoStock Exchange. Our department is providing information and systemsolution for mainly asset management, trust, advisory, etc.
Shareholder voting by Institutional Investors(1) Regulatory Changes;New disclosure rule fortheir voting decisions(2) Responsibility asinstitutional investors inmonitoring CorporateGovernance(3) Action to requirecompanies to enhancetheir own value for long-term investment..Will introduce the Japanese Case….
Definition and categorized of “Institutional Investors”ACTIVEPASSIVEShort Term Long TermActivistHedge FundIndividualBankGroup companiesPensionPassiveEngagementlong-term concentratedinvestmentsToday’sthemeHolding a large number of shares forlong-term investment purpose.Doesn’t have much information of eachcompany.Requires them to enhance performanceand keep good governance
Current issues of Proxy Voting in Japanese companies1. Japanese company’sagenda of AGMusually has manyshareholderresolutions2. limited time;because manyJapanese companieshave their AGM oncertain dates.Infrastructure is required to allow such Institutional Investorsto reduce “Cost”InstitutionalInvestorListedCompaniesHow It Affects? Takes time to readthrough all agenda Need a lot of humanresources to exercisevoting rights Long-term passiveinvestors are preferred. Company wants themto understand agendawell and act to voteonly for theirperformance
Screening approachIdeas in Quants AnalystsScreening shares for “buy”Quant Analysts×Can we use XBRL toScreening as financialdata?Idea for efficient votingScreening for Say “Yes”As “Share-holders”PastinformationNewagenda ?Can we eliminate the companywhich we vote “YES”? So thatwe can spend time to thinkcarefully others. Can We use XBRL for screening pastinformation and new aggenda?XBRL CompanyPerformance datano XBRL non-financial dataInputting data needs Costand Man power
How we can describe agenda and voting policy of assetmanagement companies, as XBRL?Area latest XBRL achievementTokyo StockExchangeCorporate governance reportName of directors, Contents Anti-takeover measure etc…Japanese FSA Tagging for all part of security reports(Planning for next generation EDINET in 2013)IFRS Discussion about tagging for “Management Commentary”IIRC Integrated reportsCan we use new applied or planned architecture foragenda?Feasibility of screening with XBRL for Proxy Voting
• Revenue•Capital Investment•R&D•Deposit•Dividends•Directors•Outside Director•CorporategovernancePast Financial Reports Agenda of AGM•Closing Account•Planned investment•Revenue• Proposed appropriationof retained earnings•Election of Directors.•Measures to preventacquisitionEvaluateEach factConsistencyUsingSame tagsFeasibility of screening with XBRL for Proxy Voting
• Evaluating each fact in resolutions of agenda.Feasibility of screening with XBRL for Proxy VotingSameTaxonomyTimeEnd 6W 3MAGM Submit Securityreport to FSAEarningdigestAGMagendaSending toShareholdersFiling toTokyo StockExchangeSecurityreport
Home PageSponsorsMonitoradequacy thevoting resultsAsset ManagementProxy votingwith its own voting policyGovernment disclosuresystem -- EDINET --Trial check thevoting resultbefore AGM2012 FY1Q,2Q,3Q,4Q2011 FY….XBRL XBRLXBRLAgenda ofAGMListedcompanyFeasibility of two monitoring using XBRLXBRL
What We Can Expect?Institutional InvestorsGlobal Institutional InvestorsCan Access to the Qualitative InfoInstitutional Investors•Agenda of AGS•2012 FY 1Q, 2Q, 3Q, 4Q•2011FY…..Unified XBRL Information• Companies in Japan, US, EU, Asia….Investors can refer pastinformation and agenda together Global Institutional Investorswould be able to Exercise votingrights Institutional Investors can judgethe agenda using multiple yearqualitative information.XBRL XBRL XBRL XBRLXBRL XBRL XBRL XBRL
What’s the Next Step?Issues to be resolved We should discuss about "facts" which set oninstance of XBRL. Making rule of cords for name of executive, types ofdividends, type of measures to prevent acquisition,to be known global investors. Since these information is word, for non-Englishspeaking countries, flags are better to understanding. We should collect more opinions from bothcompanies and investors, globally.