Professor Kunio Ito of Hitotsubashi University becomes Ambassador for Integrated Reporting

Professor Kunio Ito of Hitotsubashi University in Japan has become an Ambassador for Integrated Reporting <IR> – a move welcomed by the International Integrated Reporting Council (IIRC).

A well respected government advisor, Professor Ito has been instrumental in the adoption of <IR> in Japan, where the Japan Investor Relations Association estimates that around 130 Japanese businesses are currently practicing <IR>.

The ‘Ito Review’ – a report produced as a result of the discussions over the past year of the ‘Competitiveness and Incentives for Sustainable Growth: Building Favourable Relationships between Companies and Investors’ project was chaired by Professor Ito. It has led to the endorsement of <IR> by Japan’s Ministry of Economy, Trade and Industry (METI), as a means of communicating the long-term value creation proposition of companies. METI is now encouraging Japanese companies to become best practice leaders in <IR> and contribute creative solutions to assist its global adoption.

The review, which also provides case study evidence, emphasizes the need for a shift to capital efficiency-focused management, optimization of the investment chain, and promotion of two-way dialogue between companies and investors, citing Integrated Reporting as one effective means towards this purpose.

The Ito Review is complemented by the Japanese Stewardship Code published by the Financial Services Agency in February 2014.  The Code encourages a stronger dialogue between company boards and institutional investors and many businesses are adopting Integrated Reporting to help facilitate this enhanced engagement.

Professor Ito said, “An increasing number of Japanese companies have been adopting Integrated Reporting and taking its feasibility into consideration. The Stewardship Code and the Ito Review will accelerate the trend. The dialogues and engagements between management and institutional investors in Japan are expected to enhance the synergy in terms of quality and usefulness between dialogues and Integrated Reporting.”

Paul Druckman, CEO, IIRC, said, “The Ito Review has become an important tool for boards of Japanese companies and is leading to a transformation in the corporate reporting landscape in Japan. <IR> is becoming firmly established as the future of corporate reporting, complemented by support from both Government and the capital market. There is a growing recognition that the adoption of leading practice in reporting can improve the conditions for long-term investment, as well as improve the productivity and performance of business. Professor Ito’s leadership should not be underestimated and we are delighted that he is now an Ambassador of <IR>.”