Japan Moves to Cap Directors’ Damages Liability to Ease M&A and Capex Concerns

Japan’s government is moving to revise the Companies Act to place a cap on damages liability for corporate executives. The measure is intended to ease the burden on directors and other managers who may face the risk of large compensation claims through shareholder derivative lawsuits. According to the source, such liability concerns can make executives more cautious about major decisions such as mergers and acquisitions (M&A) or capital investment. If advanced, the revision could lower legal pressure around corporate decision-making. The original report did not specify the level of the cap or the exact scope of application. Source: mk.co.kr