Japan equity memo: Impetus behind family governance reforms, expectations for corporate governance reforms at owner-managed companies

Research evidence excerpt

Japan equity memo: Impetus behind family governance reforms, expectations for corporate governance reforms at owner-managed companies

Japan equity memo: Impetus behind family governance reforms, Global Markets Research

expectations for corporate governance reforms at owner-managed 23 June 2026companies

EQUITY: JAPAN STRATEGY

Owner-managed companies have underperformed in Research Analysts

recent years... Macro strategy Tomochika Kitaoka - NSC

tomochika.kitaoka@nomura.comLooking for governance that can leverage ability to take

decisions quickly +81 3 6703 1815

Naoya Fuji - NSC

Valuation criteria for owner-managed companies: Fast decision-making versus naoya.fuji@nomura.com

inadequate governance +81 3 6703 1245

While there is no clear definition of what constitutes an "owner-managed company", it Tomoharu Kurosu - NSC

often refers to a company in which the founder and the family have a majority stake and tomoharu.kurosu@nomura.com

effective management control. While the lack of separation between ownership and +81 3 6703 3875

management creates governance issues, such companies are able to act quickly in line

with their owners' visions or intuitions. There are several Japanese equity funds that focus

on owner-managed companies, and they performed well at times over 2017–21 (Figure1

). However, these funds have performed poorly versus the TOPIX over the past few years,

making it timely for the TSE and METI to have identified governance issues at owner-

managed companies and family businesses.

Fig. 1: Performance of Japanese equity funds focusing on owner-managed

companies

Note: Simple average returns calculated for the Tokio Marine Japan Owners Equity Open, Zipangu Owner

Corporate Equity Fund, Nippon Founder-Led Companies Fund, Investor-Management Unite as One ETF,