On March 5, 2022, Vietnam Japan University held RILAP special seminar series 2022 No.01 with corporate compliance. This seminar is divided into two parts. In the first part, Prof. Nunoi Chihiro (布井千博先生) – Hitotsubashi University presented the content “Building a Compliance System in Firms.” He shared knowledge about compliance, such as definitions, regulations on compliance systems, internal reporting, and protection of whistleblowers. Part two is the presentation of Ms. Naito Kayoko (内藤加代子先生) , Attorney at Law Oh-Ebashi LPC & Partners, with the topic: “Corporate Management based on ESG and SDGs.” She introduced about: What are ESG, SDGs, goals, and benefits that companies apply, and the initial results of using ESG proposals in enterprises in Japan.
From the 1st lecture on corporate compliance, VJU’s students were given excellent opportunities to take hold of the definition and how essential it is in business management (especially with the globally economic). Corporate compliance is to make sure the company and employees follow all laws, regulations, standards, social norms, and ethical parts that apply to the organization and industry. Good corporate governance can save the organization unmeasurable costs in the long run. Corporate compliance violations can result in fines, penalties, loss of reputation…, and more to be counted. Moreover, corporate compliance covers both internal policies and procedures and lawsuits, which play a big part in helping the organization prevent and detect rules violations, protecting it from fines and penalties. The return on investment for corporate governance could be enormous because corporate governance help the organization avoid waste, fraud, abuse, and other practices that disrupt the operation and put the company at risk. With good corporate governance, we can enhance the company’s value, ensure sustainability, and prevent the risk from within.
The campaign GM led to the widespread practices of shareholders exercising their rights, which became the prototype for the current activities of investors. According to the Laws of Japan (which are based on US federal law), the shareholders have the right to make a proposal to be resolved at a general meeting of shareholders, an important means of reflecting shareholders’ opinions in corporate management. In conclusion, corporate compliance is essential for making the business bloom at its best. Without a good corporate compliance program, the organization might be at significant risk of making a global business offer.
Compliance is a critical issue today. In the second session delivered by Naito sensei, she introduced soft laws such as ESG and SDGs and applied them to corporate governance. ESG stands for Environment Social Governance. For example, climate change is also a risk to the environment, affecting the company. However, proper and good environmental protection measures such as wastewater treatment contribute to not only environmental protection and sustainable development but also higher profits. Typical issues of climate change in Vietnam are carbon emissions, drought in the central region from 2019 to 2020, and the rise of water levels in the Mekong River.
The important thing for good corporate governance here is to bring ESG to the shareholder’s meeting and dialogue with shareholders. The issues talked about in this session are disclosure of information regarding ESG aspects, analysis of ESG aspects in M&A, internal control, and risk control from ESG aspects. Listed companies should take appropriate measures to address sustainability issues such as social and environmental issues. Institutional investors should be able to make informed judgments on dialogue and stewardship activities with investee firms based on a thorough understanding of the investee companies and their business environment to contribute to their long-term success. The Mizuho Financial Group shareholder meeting is an early example. An NPO has submitted a proposal on the suggestions based on Task force on Climate-related Financial Disclosure (TCFD). Although it has not been authorized, 35% of the stockholders agreed.
She also introduced the board measures to apply ESG in her business. Students have already learned the steps and implementation details to use ESG in business. Currently, ESG is reported by large companies and corporations and is regulated in the company’s code of conduct. Reporting standards apply to ESG reporting, such as TCFD and Global Reporting Initiative (GRI).
This presentation will give us an overview of Japanese companies’ current sustainable development in corporate governance. And the recent achievements on ESG proposals at large corporations in Japan.