A1. This surge is driven by the transition from traditional main-bank-led governance to an era of "equity governance," where capital efficiency is heavily scrutinized through the stock market. With the Tokyo Stock Exchange (TSE) and the Financial Services Agency (FSA) strongly urging companies to enhance corporate value, well-funded activists are aggressively making proposals targeting short-term shareholder returns or corporate control.

A2. Targeted companies are primarily those with depressed stock prices (such as trading below a PBR of 1x), management issues or scandals, and a "conglomerate discount" due to a mixture of diverse business segments of high and low profitability. Examples may include Kobayashi Pharmaceutical, following its public health issues, and Nidec, publishing its accounting scandals. Additionally, Seven & i Holdings was pressured to spin off its traditional and less profitable superstore business, so as to avoid the dilution of high performance of its convenience store business.

A3. The pitfall lies in the fact that while a proposal may appear to demand the divestment of underperforming segment, it may pressure the company to sell off highly profitable non-core assets (such as real estate businesses) to extract short-term gains (as seen in the Fuji Media Holdings case). Since activist proposals do not always align with the long-term interests of the company, a careful and critical evaluation is highly recommended.

A4. The companies shall stand on the position of "Stakeholder capitalism," which prioritizes delivering value to customers, employees, suppliers, and local communities. Grounded in the distinct and honorable corporate philosophies cultivated by Japanese corporations, companies should communicate to society that internal reserves are essential resources for future stability and social contribution, establishing this as the strongest counter-narrative against short-term shareholder supremacy.

A5. Companies should establish an internal "activism counter-measure team" during peacetime—comprising the CEO, key executives, and external experts—and regularly self-check for governance and business vulnerabilities. Additionally, in line with the Stewardship Code, it is inevitable to strongly build out concrete networks and relationships of trust with institutional investors and analysts on a long-term basis.

A6. Winning does not necessarily mean rejecting the activist's proposals 100%. While responding sincerely to meeting requests, it is crucial to maintain a calm, principled, and sincere response under clear "Tone at the Top" (management posture). Management must shrewdly negotiate and determine the optimal compromise or "winning line" that maximizes long-term corporate value.