Virtual Insanity: Japanese Firms Embrace Online Only AGMs

June 5, 2025

By Jack Grogan-Fenn

Japanese companies have accelerated the uptake of virtual-only AGMs, with more than 500 adopting articles to allow such meetings according to the Tokyo Stock Exchange’s (TSE) Corporate Governance White Paper 2025.

The latest version of the report stated that 64 companies had held virtual-only general shareholders meetings by March 31 2024. It added that 439 companies had passed resolutions at their AGMs to amend their articles of incorporation to permit virtual-only general shareholders meetings.

The TSE Corporate Governance White Paper has been published biennially since 2007, with the previous edition released in March 2023 and its English version issued that September.

The report was published ahead of Japan’s 2025 AGM peak season, which will see 538 AGMs held by Japanese companies during the nine days between Tuesday 17 June and Friday 27 June according to Minerva Analytics data.

Virtual AGMs are acknowledged to provide benefits, including reducing costs, improving efficiency and including a broader range of participants. However, many also see significant drawbacks to virtual-only AGMs, with hybrid AGMs cited by many as a positive middle ground.

There are several concerns behind the concept of virtual-only AGMs. This includes restricted access to meetings, limited opportunities to pose questions to senior company figures, a reduced opportunity for discussion, as well as difficult registration processes.

Shareholders have increasingly pressed companies on topics including climate, ESG, and diversity, equity and inclusion during the 2025 proxy season. Some companies have responded by holding virtual-only or behind-closed-doors AGMs, while others have heightening hostility towards activist investors attending in person meetings.

The number of companies holding virtual-only AGMs has almost tripled since the 2023 Corporate Governance White Paper was published, while adopting articles to allow online-only meetings has also notable risen.

The 2023 report stated that 22 companies had held virtual-only shareholders, while 316 companies had passed proposals permitting such meetings by August 31 2022.

Many countries passed emergency rules allowing virtual only-AGMs in response to the COVID 19 pandemic. In 2021, Japan amended the Industrial Competitiveness Enhancement Act to allow for "general shareholder meetings without a specified location". This made it possible to hold virtual-only general shareholder meetings.

Jen Sisson, CEO of the International Corporate Governance Network (ICGN), this week provided comments to the Japan Financial Services Agency’s Council of Experts on Corporate Governance. This included Sisson warning that Japan should not follow other nations in a “proliferation of moves around the world to allow for virtual-only AGMs”.

“Fully virtual AGMs significantly limit the ability of shareholders, especially minority shareholders, to interact with boards and management, ask unmoderated questions, and make statements from the floor,” ICGN’s statement read. “Investors have a strong preference for hybrid meetings, or in person meetings.”

As noted by Sisson, virtual-only AGMs are emerging as a prominent trend in other regions as well as Japan.

At a January event hosted by the Investment Association, Andrew Death, Deputy Director of Corporate Reporting, Assurance and Governance at the UK Department for Business and Trade, said that the UK government will look to clarify the legality of virtual general meetings of companies, including AGMs, as part of the upcoming Audit and Corporate Governance Bill. Further details on this bill are expected later this year or early next year.

In October, Secretary of State for Business and Trade Jonathan Reynolds said the UK would look to modernise the UK’s non-financial reporting framework in October, including clarifying the law in relation to virtual AGMs.

Virtual-only AGMs has also been a hot button issue elsewhere in Europe. In February, German multinational tech company Siemens’ board narrowly lost a vote to allow the company to continue to hold virtual AGMs without the physical presence of investors.

Germany’s largest companies were also urged to stop holding virtual-only AGMs and to adopt hybrid meeting model by institutional investor network Shareholders for Change member the Ethos Foundation last year.

The TSE whitepaper additionally highlights that companies have sought to make shareholder meetings more accessible. This includes 81.4% of companies permitting electronic voting, up from 71% in the 2023 report, and 60.9% using electronic voting platforms for institutional investors, up from 54.5% two years ago.

In response to foreign corporations, including overseas institutional investors, having a shareholding ratio of 31.8% in Japanese companies, 61.3% now offer English versions of convening notices, summaries and related materials for AGMs. This is an increase from 55.5% in the 2023 report.

However, only 36.4% of Japanese companies publish an English version of their corporate governance reports.

The English version of the 2025 TSE white paper will be available later this year.

Minerva’s blog focuses on the latest developments in ESG investing and stewardship. Minerva is a global provider of sustainable stewardship solutions with over 25 years of expertise. Minerva empowers investors by providing essential tools, including ESG research and data, enabling them to navigate the intricate landscape of stewardship and proxy voting, whilst ensuring their decisions are well-informed and aligned with sustainable principles.

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