IR Monitor – 11 February 2026

In this week’s newsletter:

• Efforts to overhaul corporate governance in the Japanese market have suffered some setbacks: KDDI has found up to $1.5bn in fictitious revenues, Nidec faces a warning that it could be delisted & Chubu Electric has been found to have fabricated seismic data
• AI exaggeration carries big risks, warns Forbes, not least investor complaints
• Investors are wary as Trump places new limits on CEO pay and dividends
• Ed Warner on how the boardroom’s biggest fears are shifting
• Almost a fifth of FTSE 100 CEOs live outside the UK and at the same time companies are under investor scrutiny for handing CEOs relocation allowances to move to the UK
• And finally… is it really a good sign when executives buy their own stock?

This week’s news

Corporate governance in the Japanese market: some setbacks

KDDI, one of Japan’s three largest telecoms providers, revealed that up to ¥246bn ($1.5bn) of revenue was linked to fictitious advertising transactions at two subsidiaries, adding to concerns over corporate governance standards in Japan. The FT reported that the company postponed its third-quarter results after identifying irregularities at Biglobe and G-Plan, where employees booked advertising revenue despite the absence of genuine clients. KDDI said the misconduct spanned three financial years and could reduce operating income by around ¥50bn, while approximately ¥33bn was paid to external parties as agency fees linked to the scheme. The group first informed the market last month after concluding that revenues may have been overstated and has since established an independent investigation committee led by legal and accounting professionals, due to report by the end of March. Chief executive Hiromichi Matsuda (CEO at KDDI) acknowledged that the incident had significantly undermined the group’s credibility. The case emerges as the Tokyo Stock Exchange intensifies efforts to raise governance standards among listed companies, reinforcing how swiftly accounting failures can erode investor confidence.

AI exaggeration carries big risks

Amid growing hype around artificial intelligence, companies are at risk of exposing themselves to legal and reputational damage by overstating their AI capabilities. This is a practice increasingly being referred to as AI washing. In a recent interview with Forbes, Jason Bishara, Financial Practice Leader at NSI Insurance Group and executive risk specialist, warns that this can trigger investor complaints, litigation and even the loss of liability insurance cover. From a governance perspective, senior executives and board members face personal liability if misleading statements undermine shareholder value, particularly where there is a lack of adequate controls and oversight. Therefore, it is crucial that senior individuals ensure that public claims made by their organisations accurately reflect real capabilities. To help mitigate these risks, Bishara recommends using independent third-party advisers to verify AI-related claims before they are made public, effectively shifting part of the risk away from the company. He also recommends executives scrutinise insurance policies more closely, noting that insurers are beginning to introduce exclusions for AI-related misrepresentation. Hence, it is clear that as enthusiasm for AI inflates expectations, robust governance and careful disclosure are central to protecting corporate reputation as well as individual executives.

Investors are wary as Trump places new limits on CEO pay and dividends

President Trump’s January 7 executive order limiting CEO pay, dividends and share buybacks at defence contractors has raised shareholder concerns about government interference in corporate decisions. The order caps executive compensation at $5m annually and bars payouts until companies deliver products on time and on budget. According to Reuters, investors worry that these restrictions could reduce returns and make it harder for firms to attract top talent, even though many companies already have enough cash to fund operations and expansion. While the financial impact may differ across companies depending on their capital allocation strategies, the broader issue is the precedent it sets. This underscores the tension between government priorities and broader market norms, highlighting how changes in policy can directly affect shareholder value and the challenges IR teams face in explaining those impacts to investors.

Ed Warner on how the boardroom’s biggest fears are shifting

Boardroom priorities tend to move in waves  –  not because problems are solved, but because new risks crowd in, according to Ed Warner writing in The Times. A decade ago diversity dominated director discussions, followed by Brexit, then Covid-era debates over remote work and more recently ESG, which has since slipped down the agenda as political headwinds grew. Today, two concerns have grown: AI and cybersecurity. Directors increasingly see AI as existential, simultaneously a source of productivity gains, competitive threat, strategic opportunity and structural weakness, while admitting that real expertise often sits far below board level. Cybersecurity brings a more visceral anxiety, with many leaders now viewing serious data breaches and ransom demands as inevitable rather than hypothetical. According to Warner, these informal conversations reveal a deeper truth for investors: governance risk is increasingly shaped by how effectively boards understand and oversee fast-moving technologies that they themselves may not fully grasp, even as geopolitics and demographics loom as the next likely additions to the corporate worry list.

Almost a fifth of FTSE 100 CEOs live outside the UK – the Financial Times

Almost a fifth of FTSE 100 chief executives now live outside the UK, highlighting both the international nature of the UK’s blue-chip index and the growing pressures on London as a listing venue. An FT analysis shows 19 CEOs are based overseas, from the US and Italy to the UAE and Switzerland, reflecting where global businesses operate, where talent can be attracted and, increasingly, where families choose to live. Headhunters say this globalisation of leadership may make executives less emotionally tied to keeping headquarters or primary listings in the UK, as companies face fewer practical barriers to relocating. The trend comes amid high-profile moves by firms such as Ashtead, CRH and Flutter to New York, where executive pay has often risen sharply post-relocation. Taken together, these moves are compounding investor scrutiny of British companies and reinforcing concerns that the FTSE 100, which already generates more than 75% of revenues overseas, is becoming a weaker proxy for UK domestic business.

And finally … is it really a good sign when executives buy their own stock?

A splash of insider buying may look like a confident thumbs-up from the C-suite, but the Wall Street Journal’s number-crunching suggests investors shouldn’t read too much into it. Analysing around 1,400 executive share purchases across the S&P 500 over five years, the research finds that while stocks often enjoy a brief morale boost (a median pop of about 2%) most fail to fully claw back earlier losses and only a small minority go on to deliver sustained gains. High-profile cases such as Intel and Netflix show that executives often buy after a sell-off not because a turnaround is imminent, but because the shares simply look cheaper than before. In other words, insider buying can signal optimism, but it is just as likely to reflect opportunistic bargain-hunting as to prove a reliable guide to future performance.