The Ministry of Economy,Trade and Industry (METI) in Japan, has published a report
to prompt better dialogue between businesses and investors. It recommends Integrated Reporting as a means for providing the necessary information disclosure to bring about better dialogue between companies and investors, in order to enhance corporate value creation.
The report recommends the establishment of an environment in which companies and investors can develop a mutual understanding through high-quality dialogue and create corporate value over the mid- to long- term. It describes measures for realizing a “dialogue-rich nation”, including comprehensive information disclosure by companies, enhancement of information that is useful for making investment decisions, setting a schedule aimed at achieving dialogue-oriented processes for shareholder meetings, and the promotion of ‘electronification’ – the use of new technology as a means to improve relations.The IIRC welcomes the release of this report, with Paul Druckman, CEO, IIRC saying, “The recommendations in this report will undoubtedly prompt a renewed focus on better dialogue between companies and investors in Japan. I am delighted that METI has come to the same conclusion as the IIRC – that Integrated Reporting can be a means for enhancing value creation, as a result of a better understanding by both the company and investors, of the information that is material to the company. Estimates suggest that around 180 businesses in Japan are taking steps towards <IR> and my hope is that through <IR> and the other recommendations put forward in this report, better dialogue between companies and investors will support sustainable growth in Japan.”
This report is released as Japan’s Corporate Governance Code comes into effect on 01 June 2015. The code encourages listed companies to disclose their own value creation story including strategy, risks and governance.