Corporate reforms in 2026: Deepening rather than slowing, with companies taking the lead instead of activist investors

Japanese corporate reforms are entering a new stage in 2026. Reforms in 2023-25 focused on shareholder returns and reducing surplus capital through external discipline, such as corporate governance reform and activism. Now, companies are shifting to a phase where they themselves pursue longer-term improvement in corporate value through growth investments, M&A, business restructuring, and capital allocation. Some global investors have expressed concern that corporate reform may slow following the July revisions to the Corporate Governance Code and the Q&A on the Guidelines for Corporate Takeovers. However, we believe the essence of these government policies is not a shift in focus from shareholders to companies, but rather to promote the maximization of corporate value from a long-term perspective. Japanese companies' margins are expanding at a pace comparable to US companies, and ROIC improvement is also becoming more evident. In Japan, a virtuous cycle is beginning where corporate gro