Publications
Publications
- June 2016 (Revised May 2017)
- HBS Case Collection
FANUC Corporation: Reassessing the Firm's Governance and Financial Policies
By: Benjamin C. Esty, Nobuo Sato and Akiko Kanno
Abstract
In February 2015, Daniel Loeb (a U.S.–based activist investor) announced his firm had a large investment in FANUC Corporation, a leading producer of industrial robots and software for machine tools. Loeb was demanding that the Japanese firm change its financial and governance policies (e.g., distribute more cash, fix its “illogical” capital structure, and provide more information to shareholders). FANUC’s CEO, Yoshiharu Inaba, and his board must decide if and how to respond. One the one hand, the firm had been very successful having built leading global market shares in each of its core divisions and profitability that exceeded what Goldman Sachs earned on a per-person basis. On the other hand, the Japanese government was calling for financial and governance reform as part of the prime minister’s recently announced economic growth strategy known as “Abenomics.” Although Inaba and his team had previously considered many of the proposed changes, the question was whether it was now time to actually make some of the changes.
Keywords
Hedge Funds; Economic Policy; Investments; Government Policy; Deregulation; Financial Management; Valuation; Investment Funds; Policy; Corporate Governance; Macroeconomics; Investment Activism; Change Management; Financial Strategy; Cross-Cultural and Cross-Border Issues; Japan; United States
Citation
Esty, Benjamin C., Nobuo Sato, and Akiko Kanno. "FANUC Corporation: Reassessing the Firm's Governance and Financial Policies." Harvard Business School Case 216-042, June 2016. (Revised May 2017.)