Progress Report 2015–2016 on the Corporate Reporting Lab Compiled
The Ministry of Economy, Trade and Industry (METI) launched the Corporate Reporting Lab in 2012 to provide enterprises and investors with opportunities to deepen their dialogues for enhancing corporate value as well as to research, discuss and propose more effective methods of disclosing corporate value. METI compiled a progress report on the details of the activities and major achievements of the Lab between November 2015 and December 2016.
1. Details of the Corporate Reporting Lab
In July 2012, METI launched the Lab to provide enterprises and investors with opportunities to deepen their dialogues to enhance corporate value as well as to research, discuss, and propose more effective methods of disclosing corporate value. Participating members made individual efforts to advance the Lab’s activities, including proposing and undertaking various projects.
- The Lab aims to achieve the following two major goals:
- Bring enterprises and investors together to exchange views, identify differences in perceptions, and seek common ground and establish terminology so as to facilitate dialogue in a more constructive manner; and
- Establish a communications hub and network with a variety of domestic and foreign stakeholders, including, inter alia, overseas investors interested in the Japanese market, and communicate Japan’s message overseas.
2. Outline of Progress Report 2015–2016 (the Lab’s activities and major achievements)
METI compiled the documented activities and achievements of the Lab from November 2015 to December 2016 into a report titled “Progress Report 2015–2016.” The following is the outline of the Report.
At the meetings of the Planning Committee, investors made presentations concerning a non-financial “invisible value” issue which is a focus for enterprises that are expected to bring about sustainable value creation. Moreover, enterprises made presentations concerning their own return-on-equity (ROE) management, changes in institutional investors following the introduction of the Japanese Stewardship Code and related challenges and ideal approaches to dialogues and disclosure that will lead to the promotion of investment in human resources and intangible assets, after which participants discussed these issues.
Concerning the issue of the changes and challenges following the introduction of the Japanese Stewardship Code, enterprises raised the following issues.
(For details, see the Appendix of the Progress Report 2015–2016.)
[Positive changes brought about by dialogue with institutional investors]
- The dialogues contributed to reviewing the composition of board members and the viewpoints on information disclosure in enterprises.
- They helped enterprises evaluate the assessment of activities.
- Institutional investors deliberated more carefully before exercised their voting rights.
- Such dialogues raised level of attention paid to and recognition of the value of non-financial information.
[Challenges faced by enterprises]
- Some enterprises noticed no change in investors despite introduction of the code.
- A significant percentage of investors have a short-term perspective.
- Dialogues being treated as a formality and rubber-stamp voting are still common.
- Enterprises also need to further enhance the quality of disclosed information.
- [Positive changes brought about by dialogue with institutional investors]
- At the meetings of the Working Group on Corporate Governance Dialogue, a company providing advice on shareholder rights made a presentation concerning its revised policy for its consultation efforts related to voting-right execution. Moreover, METI explained the improvement of Japan’s tax systems related to expenses accounts, benefits, and other compensation of board members as one of its recent efforts related to corporate governance, and participants exchanged views concerning the issue. In addition, participants discussed ideal approaches to boards of directors and boards of auditors.
- Full text of the Progress Report 2015–2016 (in Japanese. English version will be posted soon.)（PDF：798KB）
Reference: Past activities and achievements of the Lab (July 2012 to October 2015)
Progress Report 2012–2013:
Progress Report 2013–2014:
Progress Report 2014–2015:
March 1, 2017
Division in Charge
Corporate Accounting, Disclosure and CSR Policy Office, Economic and Industrial Policy Bureau