In recent years, there have been increasing expectations for a new role of buy side analysts to actively engage with the executives of portfolio companies.
In this report, we address a new type of analysts who promote engagement based on mutual trust with executives. Rather than viewing executives as “agent type managers” as in conventional agency theory, these analysts view executives as “steward type managers.”
We then discuss the characteristics and skill sets required for this type of analyst. We believe that this new type of analyst that aims for establishing mutual stewardship relationships with executives is the future of securities analysts.
Yasuaki Kinoshita, Senior general manager, Equity Investment Department, Nissay Asset Management
Mitsuru Morita, Professor, Graduate School of International Management, Aoyama Gakuin University