To whom the disclosures are prepared : Philosophy “Maintain the transparent system 2” -Disclosure policies-

This time, Inamori* spoke about the above motto in his book : Practical Accounting -Business Administration and Accounting -. What Inamori said is quoted with “”.

“I believe that companies, especially listed companies, have considerable amounts of social impacts and therefore, must disclose as much corporate information as possible. For example, since Kyocera issued a type of stock called ADR in the United States in 1976, it has disclosed all information required under the system in the United States.” 

Mr. Inamori stressed the following three points in terms of fair disclosure.

Let me explain one by one.

1. To employees

“From the perspective of fair disclosure in the United States, Kyocera had no hesitation in implementing the same accounting system and disclosing contents as American companies. As a result, Kyocera remains one of the very few Japanese companies today that provides the same disclosures as American companies regarding the pension system.”

→Corporate pension plans have been an important topic that shows how the company considers staffs’ retirement. Although it is not very common in Japanese companies, I think it is important for companies to properly manage and increase their pension funds to prepare for contingencies, provide stability and to secure the lives of employees. I believe that it is the mission of a company to understand the difference between speculation and investment, and to increase the fund through prudent investment. Our company provides real estate investment advisory services, and through these services, we would like to enhance our contribution to the society

2. To shareholders

“Communicate with your investors that your company has a sound financial structure and a promising future where they can be comfortable with investing their funds, help them understand your company’s value accurately, and as a result, increase your company’s value. In other words, this eventually leads to a rise the corporate stock price. Those efforts will ultimately bring great benefits not only to the company but also to many shareholders. ”

→I think a company’s value is reflected in whether it conducts its corporate activities with trust, integrity, and sincerity. In other words, the corporate value depends on how the company conducts its business philosophy on the daily businesses. Therefore, I think it is important to communicate not only with staff but also with shareholders how accurately and diligent the company has been operating to achieve its business goals.

3. To be sincere

“Disclosure is basically telling the truth as it is. Even if something bad happens, disclosing the facts properly and comprehensively to relevant parties would increase the trust towards the company or the management. When you encounter difficulties, you need to face them and humbly and honestly tell investors that you are steadily implementing measures to overcome those obstacles. Under the prudent management system, fairness comes first, and the profit eventually follows.”

→The former president of Taiwan, Lee Teng-hui, received his education in Japan. He wanted to develop Taiwan’s democracy based on the philosophy which Japanese people had demonstrated to him. Lee reiterated many times the sincerity of Japanese people.  I believe that, whether it is a company or a country, this kind of honesty and sincerity ultimately secures prosperity for a long term. 

Further queries or doubts, please email to ytomizuka@abrilsjp.com

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