The code was drawn up by an expert council under the Financial Services Agency and adopted by the Tokyo Stock Exchange through its listing rules. It is not law. Listed companies must either comply with each principle or explain why not in a corporate governance report filed with the exchange. Investors, proxy advisers and the media read those reports closely.
The 2021 revision was timed for the exchange's new market segments in April 2022. It asked Prime Market companies to have independent directors making up at least one-third of the board, and a majority where appropriate, to set up nomination and remuneration committees and to publish the skills of their board members. It also asked companies to set out their approach to diversity among core staff, including women, non-Japanese and mid-career hires, with measurable targets, and to disclose how they invest in human capital.
The Financial Services Agency and the exchange published a further revision on 21 July 2026, under the banner "from form to substance". It slims the code, replaces supplementary principles with interpretive guidance, and puts more weight on the board's oversight of growth strategy and capital allocation. Listed companies must file governance reports reflecting the revised code by the end of July 2027.
What it means for a foreign employer
- Demand for independent directors is high. Listed Japanese companies need experienced outside directors, especially women and people with international backgrounds. Executives at foreign companies are part of that pool.
- Mid-career hiring is now a disclosed metric. Many listed companies publish targets for mid-career hires in core roles, which means more competition for the senior people you want.
- Use governance reports as intelligence. They set out board composition, diversity targets and succession practice for any listed competitor or partner.
- Your Japan entity is probably outside it. A subsidiary of a foreign group is not covered, but listed Japanese partners and joint ventures are, and will expect you to understand it.
Sources
- Tokyo Stock Exchange, Japan's Corporate Governance Code (June 2015; revised June 2018, June 2021 and July 2026).
- Financial Services Agency and Tokyo Stock Exchange, announcements of the 2021 and 2026 revisions.
- PwC Japan and Business Lawyers summaries of the 2026 revision.