Keyence, maker of industrial automation systems, is one of the larger listed companies in Japan. The company has been a posterchild for the challenges faced by Japanese corporations.

An insulated board with minimal independent representation has led us historically to oppose several resolutions at each shareholder meeting. We have actively engaged with the company since 2013 on issues around board composition and have seen some progress. In 2020, the company appointed two outside directors to the board, increasing the proportion of independent representation from 0% to 22%. In 2022, the board appointed an additional outside independent director. This appointment now means the board comprises one-third outside directors, meeting the minimum level of outside oversight we expect from Japanese companies.

Early in 2022, Keyence also appointed a new female, independent, non-executive director, the first female appointment to the board. This improvement of the board’s gender diversity can help enhance the overall effectiveness of the board. We had encouraged this action through engagement and voting.