- Policy Proposals
- Summary First Proposal for Creating an Affluent Society through Capital Efficiency Optimization "Implementation of Business Restructuring for Stronger Profitability"
First Proposal for Creating an Affluent Society through Capital Efficiency Optimization
"Implementation of Business Restructuring for Stronger Profitability"
June 24, 2016
Chairman, Capital Efficiency Optimization Committee
(Vice Chairman, Nissan Motor Co., Ltd.)
I: Awareness of Issues
- The root cause of low ROE in Japanese companies is the retention of low-profit businesses
- "Bedrock in management’s inner thoughts" blocking business restructuring
- Business restructuring when the business situation is favorable
II: Main Points of This Proposal
- Management that emphasizes capital efficiency to create a "cycle of enrichment" within society
- (1)Need for ROE in excess of the cost of equity
- (2)Enhancing Japan’s industrial competitiveness to create a "cycle of enrichment"
- Advantages that the removal of low-profit businesses provides to employees
- Introduction of a mechanism to promote business restructuring
- (1)Analyzing capital efficiency by business
- (2)Restructuring the business portfolio with objective criteria
- (3)Using outside directors and communication with investors for rational decision-making
- (i)Using the original functions of outside directors
- (ii)Communication with investors about long-term management visions and strategies
- Future discussions