【Short Review】Japanese Unique AGM Case of LIXIL GROUP CORPORATION:Analysis of Appointments of All Director Candidates Proposed by Shareholders and of Institutional Investor Decisions

At LIXIL GROUP CORPORATION’s (5938, LIXIL Group) annual general shareholders meeting (AGM) in June 2019, all six director candidates proposed by shareholders were appointed. The group, which included two common candidates who were originally proposed by shareholders but also were proposed by the company, became the majority on the Board of Directors. This was a rare occurrence, even from a global perspective.
In the United States, it is difficult for shareholders to make any proposals related to management matters. Moreover, shareholder proposals are non-binding resolutions in the U.S. and conducting a proxy contest can be quite expensive. In recent years, an increasing number of U.S.-based companies have amended in their Articles of Incorporation to allow for director candidates proposed by shareholders to be placed on proxy solicitation documents (i.e. “proxy access”). However, up until now, no director candidates have been nominated by shareholders at those companies.