Most Japanese firms send meeting agenda notices to shareholders just two weeks--the legal minimum--before annual meeting dates. The short notice leaves investors only a few days at most before voting deadlines to translate, analyze, and execute votes for their holdings.

Equally problematic is the concentration of shareholder meetings on a few days each year. The perennially lopsided distribution was illustrated again last year. Of the 80 percent of Japanese firms tracked by ISS that held their annual meetings in June, 83 percent scheduled their meeting on June 24, June 28, or June 29.

These hurdles to voting have sparked complaints by international investors since many began voting their Japanese shares in the early 1990s, as well as by Japanese institutions that have started to systematically vote their domestic holdings in recent years.

Two rules that have helped sustain short notice and meeting concentration practices remain in the law, but as companies take advantage of the dividend approval deregulation, their justifications may start to ring hollow.

Because shareholder approval of profit allocation has long been a requirement before dividends could be paid, there has been a rationale for requiring that each year's annual shareholder meeting be held within three months of the fiscal year close, so that the year-end dividends could be paid in a timely manner. This requirement in turn presents a scheduling challenge, since audited profit figures are necessary for any profit allocation resolution, and they must be circulated to shareholders in meeting notices some time before the meetings.

In most international markets, annual meeting agenda notices reach shareholders three weeks or more before the meeting date, but Japanese companies have argued that they must rush to complete audits in time to meet even a two-week notice requirement. Even after the amendments, Japan's company law would still allow companies to wait until just two weeks before the meeting date before mailing the agenda.

However, if the bulk of Japanese firms ultimately opt to waive this dividend approval requirement, this justification used to defend the old practices will vanish.

Some institutions this year are expected to vote for proposals to delegate dividend and profit allocation authority to Japanese boards, in the hope that this may one day lead to further legal and regulatory reform that will enable a more manageable proxy voting calendar in Japan. Other investors who have developed policies concerning dividends may oppose granting boards discretion over income allocation, concluding that there's no guarantee that companies will then decide to actually hold their meetings substantially earlier.