Back to Global Corporate Governance Trends for 2026
More than a decade after the Corporate Governance Code’s launch, Japan is shifting from a regulator-led strengthening phase to one that tests each company’s initiative and substance. A revision to the Corporate Governance Code is under discussion by the Financial Services Agency and the Tokyo Stock Exchange, with 2026 in view, and aims to streamline the code and strengthen the effectiveness of “comply or explain.” Beyond box-ticking, companies will be expected to explain how governance and capital-efficiency initiatives tie to strategy, with the board assuming clear oversight responsibility and sustained engagement with investors and broader stakeholders. Experts predict this season will likely mark a turning point toward more autonomous governance.
Shareholder activism is increasing in Japan: Barclays data show the country recorded 56 activist campaigns in 2025—around half of all non-US activity—making it the most active market outside the US. This momentum is likely to persist in 2026, and activism can be viewed as a new normal. Boards will need to treat it as a core governance reality, increasingly needing to incorporate cost-of-capital considerations into their discussions and ensuring the company can articulate a credible equity story that demonstrates how strategy, capital allocation and portfolio actions will drive value. Board preparedness—and the quality of dialogue with investors and the capital markets—will be tested more than ever.
Amid shifting market dynamics, discussions on business and organizational transformation are becoming an increasingly important board agenda item, ranging from portfolio reshaping (e.g., carve-outs and strategic M&A) to structural measures such as takeover bids, unwinding parent-subsidiary listings and selective management buyouts. Boards are expected to provide appropriate oversight of management’s decision-making while also encouraging risk-taking that supports forward-looking initiatives and growth. Increasingly, the expectation is that these topics are discussed in advance through ongoing dialogue, enabling flexibility and speed as circumstances evolve. A board’s ability to navigate transformation with agility and discipline will become increasingly important.
Cybersecurity risk is having a greater—and often unpredictable—impact on business. Incidents in 2025 rippled beyond the companies involved to affect counterparties and industry-wide dynamics. Even in a steady state, more boards are expected to deepen audit discussions, particularly concerning risk governance. Boards are expected to allocate more time to discussions on IT investments, testing risk scenarios and revisiting business continuity plans while re-emphasizing directors’ role in overseeing the fundamentals of effective internal controls.
As boardroom discussions become more complex and diverse, expectations on independent directors are increasing among investors, executives, and directors themselves. Despite a decade of progress in increasing the number of independent seats and enlarging the candidate pool, companies are finding it harder to secure directors with executive skills, domain knowledge and behaviors needed to lift enterprise value. As a result, 2026 will see more focus and effort on building out highly competent boards via the naming of independent directors. Boards can expect a gradual increase in revisiting uniform term practices and strengthening peer evaluations in addition to developing and retaining highly effective independent directors. Forward-looking boards are starting to think more carefully about how they can optimize composition with strategic board succession planning.
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