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  • June 2016
  • Supplement
  • HBS Case Collection

FANUC Corporation: Reassessing the Firm's Governance and Financial Policies Spreadsheet Supplement

By: Benjamin C. Esty and Akiko Kanno
  • Format:Electronic
  • | Language:English
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Abstract

In February 2015, Daniel Loeb (a US-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

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., and Akiko Kanno. "FANUC Corporation: Reassessing the Firm's Governance and Financial Policies Spreadsheet Supplement." Harvard Business School Spreadsheet Supplement 216-714, June 2016.
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About The Author

Benjamin C. Esty

Finance
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  • Bed Bath & Beyond: The New Strategy to Drive Shareholder Value By: Benjamin C. Esty and Edward A. Meyer
  • A Decade of Corporate Governance Reform in Japan (2013-2023) By: Charles C.Y. Wang and Akiko Kanno
  • #FutureFresenius: 'Committed to Life' in 2024 and Beyond (B) By: David J. Collis, Benjamin C. Esty and Haisley Wert
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