Journal of Japanese Management Vo.4, No.2, May 2020

ISSN 2189-9592

A Study on Using Integrated Reports at Mega Banks:
Characteristics as Information Sharing Support Tools Within the
Organization
Mitsuru Akiyama
Graduate School of Commerce, Waseda University, Japan
Japan Cost Accounting Association (JCAA)
E-mail: m_akiyama3@asagi.waseda.jp
Abstract
An integrated report gives stakeholders a bird’s-eye view of a company’s outlook and makes it
possible for information to be shared within the company. As such it can play a role in disseminating
the perspectives of top management to employees throughout the organization. In this paper, I focus
on the roles that an integrated report plays as an information-sharing tool in large organizations thathave been established through multiple mergers. I examine issues of in-house reconciliation throughanalysis of Japanese Mega banking organizations (“Mega Banks”). The information-sharing role ofintegrated reports is examined from four perspectives. These include having an explicit statement ofan easy to comprehend corporate philosophy, posting of the corporations history, posting of top
management’s vision/mission statement and statements introducing each division. These provide an
integrated internal narrative that provided guidance to all employees and a comprehensive andcohesive narrative to outside stakeholders of the Mega Banks. The integrated reports of the Mega
Banks are compared with their previous issuance of conventional disclosure magazines. It was foundthat only the integrated reports provide the cohesive narrative to both internal and external
stakeholders. Consequently I found out that the integrated reports of Mega Banks play the role ofinformation sharing support tool. Since integrated reports play the role of information sharing
support tool, it can be hypothesized that these reports can be utilized in large organizations where
in-house convergences have not progressed after the merging of large organizations into even larger
ones.
Key words:
Integrated report, Mega Bank, Information sharing support tool, Corporate philosophy, Disclosure
magazine(1) Introduction

shared narrative for members located anywhere

The first purpose of this paper is toin the organization. The second purpose of thisunderstand how the integrated report of an

paper is to determine how the shared narrative

organization, that is primarily used forof the integrate report can accelerate and unify

disclosure, can also be used to support thethe understanding of organizational members

information sharing function by generatingeven after the upheaval emanating from the1

Journal of Japanese Management Vo.4, No.2, May 2020

ISSN 2189-9592

merger of two or more large establishedincludes both financial and non-financialorganizations1.

information. "By presenting the information

As a company grows, the number of items

which was disclosed through different channels,

handled and the number of departments willin a bird’s eye view, stakeholders can read theincrease. For companies with remarkable

integrated report first, and then understand thegrowth, there are cases where the company's

overall picture of the company "(Saka, 2015, p.

business content is not sufficiently known to98). This means that stakeholders who seeksboth inside and outside of the company. This

information could omit the trouble of examining

condition is particularly noticeable at the large

a wide variety of disclosure sources whenenterprises reorganized by merging. The

learning about the company's outline.

merchandise, service contents and departments

Meanwhile, for the corporate as the sender ofof the merging partner company are often added

information, the issuance of the integrated

all at once, and it takes time to grasp the whole

report seems to aim for further "value creation"

picture after the merger. This holds true not(IIRC, 2013a; Ito (K), 2014, 2016; Koga, 2015;

only for the external but also for the internal

Kozuma, 2012; KPMG Japan Integrated

stakeholders. However, in our rapid changing

Reporting Advisory Group, 2017a). In addition,

modern society, we can’t afford to wait until

there is a discussion pointing out the effect ofmerging effects are demonstrated. The merging"market logic can be introduced to internal

company is required to steer a new structure

management managers by integrated report"

integrated with the organization at an early(Ito (K), 2014, p. 161). In other previous

stage. For this reason, large enterprises, which

researches, the integrated report also plays ahave been rapidly established through merging,role as not only disclosure for external but also aneed to share information, crucial for operating

strategy tool to share information of top

the

as

management’s ideas within the company to thetransmitting information to understand thelower-level employees (IIRC, 2013a, b; Ito (K),entire2014; KPMG Japan Integrated Reportingorganization

integrallyorganization,

both

as

well

internallyandexternally.

Advisory Group, 2017b; Ochi, 2016; Okamoto,

For public understanding of the entire

2015; Uchiyama, 2015).

organization, in addition to the securities report,

First of all, in this paper, I analyze thelisted companies issue annual reports, CSR

significance necessary for integrated reports notreports, environmental reports, and recently

only in the manufacturing industry but also in

integrated reports. The number of enterprises

banks. In recent years, there is an increasing

introducing the integrated report is graduallyneed to disclose information on how companies

increasing, and the awareness of the general

who are subject to receive investment and loanssociety is also increasing. The integrated reportwill affect global warming 2 . There are also

1 Basically, with reference to Akiyama (2018),

Society, and Governance), the Integrated
Report often covers the viewpoints necessary
for sustainable growth.

which written in Japanese, I analyzed thefunction of the integrated report as follows.
2 As ESG issues (acronym for Environment,2

Journal of Japanese Management Vo.4, No.2, May 2020

ISSN 2189-9592

indications that the structure which is unique to

may not want to share information with thefinancialfinancial

employees from other predecessor. Therefore,

bubbles is similar to drifting pollution, and theinternal harmonization does not proceed, and I

significance of issuing integrated reports at

explore the future role that the integrated reportbanks is gradually drawing attention in terms ofshould fulfill.

institutions

that

form

social responsibility.
Next, I will examine what significance is(2) Utilization of Integrated Reports at Banks

given to the roles of the integrated report asin Japan

information sharing support tool for major

In this section, I analyze the necessity ofbanks formed by merging. As examples of large-

integrated reports at banks in Japan. The

scale merging in Japan, there are three MegaInternational Integrated Reporting Frameworkbanking organizations (“Mega Banks”) born one(<IR> framework) indicated by IIRC (2013a)

after another between 2000 and 2005. The

described the objective of the integrated reportturmoil that occurred immediately after theas "to explain to providers of financial capitalmerging seems to have settled down to some

how an organization creates value over time"extent. However, it is still believed that it will

(IIRC, 2013a, p. 4 and p. 7). The <IR>take time before employees who enter as newframework defined the organizational overview

graduates after the merging become core staffs,

andtherefore it still seems to be necessary for Megabusiness

Banks to devise information sharing. According

strategy and resource allocation, performance,

to the Banking Law, Banks (and bank holding

outlook,companies)

presentation, as the eight elements of thehaveprovided

explanatory

documents that introduce their business andexternal

environment,

model,
and

risks

basis

of

and

governance,
opportunities,

preparation

andintegrated report.

financial conditions at sales offices as disclosure

According to KPMG Japan Integrated

annual reports, before Mega Banks issued

Reporting

AdvisoryGroup(2017a),279

integrated reports. Comparing the conventional

companies adopted the integrated report indisclosure magazines with the integrated

2016, and the content of the report is not only

reports, I analyzed the comparison of the two in

financial information but also a wide range. It is

the three major Mega Banks over several years.

meaningful to provide information collectively to

I focus on the content unique to the integrated

stakeholders. However, the <IR> framework

report, through the comparison, and analyze thedoes not provide guidance on the concrete

meaning of the integrated report with reference

content of the integrated report. Therefore, it isto the examples of the three Mega Banks.

also pointed out that "some adjustments are

Finally, outside of the Mega Banks, I analyze

necessary because it is impossible to compare

there is an increasing possibility of utilizing thewith other companies in different formats andintegrated report in large enterprises throughcontents of each company while recognizing

large merging. The newly formed organizations

autonomy to some extent" (Ito (Y), 2016, p. 335).

tend to have divided internal systems. For

The manufacturing industry has been

example, employees from the old predecessor

issuing CSR reports and other kinds of reports
3

Journal of Japanese Management Vo.4, No.2, May 2020

ISSN 2189-9592

for a long time. It is said that there isthat Mega Banks can use platform of integrated

significance in issuing it because such industry

report not only for external disclosure, but forstresses the environment with CO2 emission.

internal information sharing, and for integrated

Meanwhile, the necessity of disclosure
through

integrated

reportsfororganization operation through description offinancialrisk-related information on the RAF in theinstitutions such as banks is gradually

integrated report.

increasing. Ochi (2016) focused on the financial

Based on the above points, I will pay

bubble which formed “the structure similar toattention to the role of internal information

external issues such as the global environment

sharing support tool of the integrated report inincluding pollution” (Ochi, 2016, p. 40), because

the next section.

financial institutions grow unacceptable risks insociety in the process of generating bubbles(3) Role of Integrated Report as Information

similarSharing Support Tooltocausing

pollution.

Financial

institutions such as banks will become theIn this section, I first focus on the role of thesubject of social responsibility as well as theintegrated report as information sharing

manufacturing industry. Ochi (2016) referred tosupport tool.

the Risk Appetite Framework (RAF) 3 andAccording to KPMG Japan Integrated

introduced a movement that Mega Banks andReporting Advisory Group (2017b), as answers

other global large financial institutions, G-SIBs4,

to the question "On what point do you thinkenriched risk-related information in terms of the"Integrated Report" contributes to in improving

RAF on integrated reports from FY 2015 (Ochi,

corporate value?", “For sharing strategies and2016, p. 42). Ochi (2016) also pointed out that hepolicies within the company or the group"5 was

could expect that "disclosure of the RAF throughconsistently listed as second during the past 5

integrated report not only has an external effect,

years. I argue that this questionnaire result

but also infiltrates risk culture from the board ofindicates that the integrated report is used not

directors to the lower-level bank employees by

only as a means for disclosing information

sharing information through integrated reportoutside of the company but also as a tool for(Ochi, 2016, p. 42). Such statements indicatedsupporting information sharing with employees

3 According to the Financial Services Agency

Financial Services Agency (FSA) website(http://www.fsa.go.jp/news/27/20151204-4.html,
viewed on July 7, 2018).
5 These are the questionnaire results for theparticipants, from December 2012 to March
2017, at the seminars on integrated reportsponsored by the KPMG Japan Integrated
Reporting Advisory Group. The seminars were
held at the pace once a year with the same
theme (the venues were held at 1 to 4 places),and the number of respondents was 1,184(response rate 83%) against 1,422 participantsin the whole group. As detailed in KPMG
Japan (2017b), please see that.

(2015), risk appetite is "the type and total
amount of risk that should willingly be
accepted in order to achieve the business plan
based on the individuality of the company's
business model" (Financial Services Agency,
2015, p. 16), and the RAF refers to "theframework of business management to be used
as a common language within the company
concerning whole risk-taking policies including
capital allocation and profit maximization"(Financial Services Agency, 2015, p. 16).
4 G-SIBs refer to banks that are important on a
global system. For details, please see the4Journal of Japanese Management Vo.4, No.2, May 2020

within the company.

I

ISSN 2189-9592

amfurther

contemplating

on

the

There are examples of utilization. Nikkei BP

involvement of employees in companies. Mizuno(2015) introduced experiences of Mr. Hajime(2015) denied the idea that employees should be

Nakajima, Managing Director of Kirin Holdings,

treated merely as a functional group, andthat "I feel that I can use integrated report forreferred to executives at Idemitsu Kosan,

internal communication (Nikkei BP, 2015, p. 49).

Panasonic, and Kyocera as an example of

In addition, Fujita (2016) introduced the quotebusiness community which is a humanitarian

from Mr. Susumu Sakamoto, General Manager

company which values their employees andof Public Affairs Division in General Affairs

training

Department, Marui Group, in which employees

themselves from so-called profit maximization,

voiced their opinion, (regarding the companies

capitalism.

first ever integrated report), "I felt the

management accounting, as Human-oriented

enthusiasm of the company", "Understand andManagement

practice the content of the report, I want todefined the situation which "Values humanembody on site" (Fujita, 2016, p. 102).

respect

them.

and

In

And

they

contrasttoAccounting,familyism

distinguishedcapitalist

Mizunoas(2015)

management

Here I reconfirm the position of employees inphilosophy, ... where management managers set

the company. Without integrated report,

up a reasonable management plan, applying

companies cannot put employees as assets6 inappropriate technologies and concepts "(Mizuno,

the financial statements, and had difficulty in2015, p. 152). According to Mizuno (2015), in thedisclosing their information on employees (skills,

Human-oriented Management Accounting, theexperience, knowledge, business processing

relationshipabilities).

There were limited means toemployees, is more important than in thecommunicate. Regarding their employees which

capitalist management accounting, therefore

is as non-financial information, after various

the public relation function has greater value,transitions, companies attempt to integrate

and to create annual report with integrated

with financial information as their integrated

reporting is important. In addition, Oshika

report. IIRC (2013a) referred to human capital(2016) stated that corporate employees "should

as one of the six capitals presented in the

not be source of costs, but should be consideredframework for integrated reporting (IIRC,

as source of corporate value. It is possible for2013a, pp.

11-13) 7 .

In other words, in thewithstakeholders,

includingcompanies to coexist with employees and that is

integrated report, it can be said that employees

crucial" (Oshika, 2016, p. 208).

belonging to companies are valued as reporting

What can be interpreted from theseelements.

arguments is that the relationship with

6 Lev and Schwartz (1971) pointed out that in

7 The Ministry of Economy, Trade and Industry

economics human capital, for their employees,
is regarded as important element, however
their employees are not recognized as theirassets in financial statements. As for Lev andSchwartz (1971), since it is introduced in detailin Oshika (2016), please see that.

(2014) also raised examples showing that it isimportant to explain human resources, etc.,
which are invisible assets, by means of an
integrated report (The Ministry of Economy,
Trade and Industry, 2014, p. 82).
5

Journal of Japanese Management Vo.4, No.2, May 2020

ISSN 2189-9592

employees is very important in the process of

doing a job of making one page of company

corporate growth, thus it seems that it ishistory. The longer the company history, theindispensable

more the commitment to the roots of their

to

share

information

withemployees.

organization, the more inviolable value they feel,

When comprehensively summarizing theand the sense of belonging will increase. The last

above, it is evident that a role as an information

viewpoint is to have the introduction of eachsharing support tool which considers thedivision. In large organizations, each member

employees within the organization is expected

plays different roles. Because the businessfor the integrated report. Is there a possibility ofsection that is nearest to them is posted, it is anutilizing integrated reports inside of an

opportunity to look at the integrated report andorganization, such as a bank, for sharing

at the same time they will know other businessinformation

divisions in the company.

reaching

tothelower-level

employees, as mentioned in the previous

In the following sections and onwards, I willsections?

compare how the integrated report issued by

In this paper, I am going to analyze whether

Mega Banks in Japan differs from their

the integrated report holds the role ofdisclosure magazine published previously. In

information sharing support tool with theaddition, I will pay attention to the role of Mega

following viewpoints. The first viewpoint is to

Banks as information sharing support tool inhave an explicit statement of an easy-to-

the integrated report.

understandcorporatephilosophy.

In

organizations where there are a large number of(4) Transition of Issued Magazines in Mega

employees, it is an important opportunity for

Banksthem to recognize what each member should do

1. The Birth of Mega Banks and Information

for the organization by explicitly indicating the

Sharing within the Organization

philosophy that everyone can recognize. The

In Japan, the birth of Mizuho Holdings

second viewpoint is to have posting of messages(reorganized into Mizuho Financial Groupby the top of the organization. Based on the(Mizuho FG) later) was in September 2000, thephilosophy of the first viewpoint, it becomes easybirth of Sumitomo Mitsui Banking Corporation

for their employees to act by expressing and(later reorganized into SMFG) was in April 2001,

posting elements to the organization members

and the birth of Mitsubishi UFJ Financial

in specific languages. The third viewpoint is toGroup (MUFG) was in October 2005, whichhave posting of corporate history. By showing

started the current situation of three major

the history of the organization which theMega Banks existing 8 . After the merging

employees belong, they can realize that they are

between

8 In this paper, for the notation of Mega Bank,are ultimately subjective thought, except for
actual facts and data. These subjective
considerations are the comprehensive results ofmy own experiences such as working at banks
and information obtained through myrelations.

I mostly use the abbreviations, "Mizuho FG","SMFG", or "MUFG", for citations of references,
titles, clauses, etc. In addition, disclose
magazines, integrated reports, related
explanation etc., published by each Mega Bank,

6

large

banks

there

were

many

Journal of Japanese Management Vo.4, No.2, May 2020

ISSN 2189-9592

differences in corporate culture, in-house

Meanwhile, although from the past, Mega

reconciliation did not proceed, and sometimes it

Banks have issued a large amount of disclosure

is said that "struggle for the next president

magazines, is it worthwhile to issue an

between old banks becomes intense" 9 . It was

integrated report?

inevitable that the competition for successful

For this reason, I will briefly refer to thecareer advancement became severe. It was not

requirements of the disclosure magazine in theeasy for the employees to accept the institution /following sections and compare the elements ofcustoms

without

the disclosure magazines in Mega Bank and theresistance, and it is pointed out that suchelements unique to the integrated report, andphenomena further delayed the reconciliation10.

then I will clarify the significance of the

From this chaos, order seems to have emerged

publication of the integrated report in the Mega

to some extent, but it is still thought that it takes

Banks.

oftheopponent's

line

time for the new graduate employees after themerging to become the core member, and

2. About Disclosure Magazine

ingenuity of information sharing might still be

According to Article 21 and Article 52-29 ofnecessary.

the Banking Law, the bank / the bank holding

To the best of the author’s knowledge, each
Mega

Bank

uses

variouscompany must provide statutory documentsinternalthat explain their business and financial

communication means (for example, conference

conditions at their sales offices as a disclosurematerials, notices, e-mails, company notices,magazine.

video messages, etc.), and devises measures

The website of the Japanese Bankers

such as training together, to share information

Association has summarized the contents of thefrom the top management to the bottom

enforcement regulations of the Banking Law as

employees, in order to execute the strategy at

disclosed in Table 1 for disclosure items thatthe organization. Among them, the integrated

must be posted in the disclosure magazine.

report is assumed to have organizational
information

comprehensible

forIn terms of issuance of the settlement of theexternal

fiscal year ended in March 2017, the three major

communication because it is disseminated in an

Mega Banks issued both ‘Main Report’, whicheasy-to-understand manner, and contents are

summarized in colorful and visual design andfulfilling, therefore the integrated report can be

was about 100 pages long, and ‘Data Reference’,

utilized for sharing information internally,

which covered numerical data and was aboutenabling their employees aware of their

300 to 400 pages long, as ‘Disclosure Magazine’.

important matters anywhere11.

They position ‘Main Report’ as the integrated

9 Main article of Mainichi Newspaper (Tokyo

progress easily, thus please see that in details.
11 As a method of utilizing further integrated
reports in Mega Banks, it can be thought thatmethods such as thorough distribution to all
employees, inclusion in training, and seniorpromotion test contents can be considered in
the future.

morning paper, p. 9) on April 20, 2005,"Between former Sumitomo Bank and former
Sakura Bank, Distributed Power, Harmony
First".
10 Okumura (2009) also introduced
circumstances where integration does not7

Journal of Japanese Management Vo.4, No.2, May 2020

report(MizuhoFinancial

Group,ISSN 2189-9592

2017a;

posting of corporate history, and introducing

Sumitomo Mitsui Financial Group, 2017;

each division. Then I compare the three types ofMitsubishi UFJ Financial Group, 2017).

report, the final disclosure magazines of each
Mega Bank, the integrated reports of theTable 1: Examples of Items (business year) for which
Disclosure is Required by the Banking Law

settlement of their first fiscal year, and theintegrated reports of the settlement of the mostManagement organization
Name and address of business office
Main contents of bank's businessBusiness overview in the most recent business year
The following matters in the most recent five fiscal years(ordinary profit / loss, current profit / loss, capital, deposit
balance and loan balance, capital adequacy ratio, etc.)
The following matters in the most recent two fiscal years(balance sheet, profit and loss, gross operating profit, grossmargin ratio, fund operating balance, interest margin,balance of so-called bad debt, balance of allowance for
doubtful accounts, capital base, etc.)
Risk management system
Regulatory compliance system
Source: Japanese Bankers Association Website

recent fiscal year ended in March 2017. Amongthe Mega Banks, Mizuho FG and MUFG eachissued the integrated report from the settlementof the fiscal year ended in March 2015, on theother hand only SMFG issued the report fromthe settlement of the fiscal year ended in March2016. As the result of the comparison, I find thatthe contents which are most common to Mega
Banks are as shown in Table 2.
Table 2: Comparison of Disclosure Magazine and Integrated
Report for Multiple Years(https://www.zenginkyo.or.jp/article/tag-h/4007/, viewed on July 7, 2018)

However, there must be a difference between

Viewpoints

the content of the integrated report, which isissued by a Mega Bank as non-statutory at its

The Final

The First

The Most Recent

Disclosure (D)Integrated

Integrated

Magazines

Reports

Reports

Corporate
Philosophy

None

Described
Colorfully /Visually

Described
Colorfully /Visuallywhich is mandated to be issued according to law,Top
Message

Few

More Pages than
D Magazines(**)

More Pages than
D Magazines(**)

because the roles of two are different from each

Corporate
HistoryNone(*)

Described
Colorfully /Visually

Described
Colorfully /Visually

Introductionof Each Div.

Few

More Pages than
D Magazines(**)

More Pages than
D Magazines(**)

own discretion, and the content of the disclosure
magazine (‘Main Report’ plus ‘Data Reference’),other.
For this reason, I will compare the disclosure

Source: Mitsubishi UFJ Financial Group (2014, 2015, 2017); Mizuho
Financial Group (2014, 2015, 2017a); Sumitomo Mitsui
Financial Group (2015, 2016, 2017).
Note: (*) Only Mizuho Financial Group (2014) introduced the historyof Mizuho Group.
(**) There are 10 to 20 pages of top messages in the integrated
reports, whereas a few pages in the disclosure magazines.
There are 20 or more pages of each division introduction plus
facial pictures of division managers in the integrated reports,
whereas only 5 pages in the disclosure magazines.

magazines and the integrated reports in thenext section, and clarify new contents of theintegrated reports of Mega Banks.
3. Comparison of Disclosure Magazines andIntegrated Reports over Multiple Fiscal Years
In this section, I will analyze whether the

As the result of the comparison, the elements

integrated report of Mega Bank incorporatesof the integrated reports of Mega Banks that areelements of information sharing support tool

not in the disclosure magazine are the following

which is not included in the disclosure magazine.

four.
Corporate philosophy expressed visually

I will focus on the four viewing angles ofanalysis clarified in the previous section; having

and clearlyan explicit statement of an easy-to-understandTop Messages by CEO, CFO, etc. withcorporate philosophy, posting of top message,

more than 10 pages
8

Journal of Japanese Management Vo.4, No.2, May 2020

ISSN 2189-9592

Visual and easy-to-understand corporate

integrated organization operation. I think that

history, etc.

utilization of integrated report as information

Facial pictures of the division managers

sharing support tool with employees in Mega

are also posted and contents enhance each

Bank is not limited to this.

division’s introduction

As mentioned above, there are many cases

I infer that a role as an information sharing

where reconciliation within banks does notsupport tool can be expected in the integrated

proceed following the merging between large

report of Mega Banks having these elements,

banks. Meanwhile, the competition with otherbut from the next section onwards, I will analyzebanks is getting more intense, and some sort of

the role from concrete contents.

ingenuity is necessary. For this reason, it isnecessary to promptly disseminate the decisions(5) Role of Integrated Report in Mega Bank

made by the management division within the

In this section, I focus on the roles of thebank, and as information sharing support tool

integrated report of Mega Bank as information

for that, recording actions which have alreadysharing support tool, and refer to the part which

been released externally in the integrated report,

shares information inside the organization fromand shift to execution at an early stage isthe latest integrated report.

possible. In large organizations such as Mega
Banks, although it is possible to deliver

1. Necessity of Mega Bank Information Sharing

messages of top executives to all employees in

Support Tool

relay video system, it is only one-way

As I mentioned in the previous section,

instructions from the top to the bottom. It is notunless there are legal restrictions in othereasy for employees to grasp what kind of

applications (for example, the role of the bank's

initiatives their organizations have announced

disclosure magazine required by the Banking

externally.

Law), the integrated report is not a statutory

Therefore, it cannot be said clearly, but if thedisclosure material, the issuance is optional.

integrated report could act as part of a strategy

However, once the company starts to issue thetool through its information sharing capability

integrated report, they must continue issuing it

to penetrate to the lower-level employees, it

since they publicly disclose such issuance,

seems to be greatly expected that the integrated

unless an event such as delisting occurs.

reportTherefore, it is necessary for companies to beorganizations, such as the ones establishedready for sustained issuance of integrated

through large-scale merging, but still disjointed.

reports, giving it a great significance.

can

be

utilized

in

other

large

Below, I would like to refer to the information

As mentioned above, Mega Banks are tosharing within the organization through thedisseminate their risk culture from the top

latest three Mega Banks' integrated reports.

management to the bottom employees by
writing the risk-related information on the RAF

2. Mizuho Financial Groupin the integrated report, aiming to share
information

withintheorganization

Mizuho Financial Group (2017a) states theforfollowing information.
9

Journal of Japanese Management Vo.4, No.2, May 2020

<Enhance the sense of unity within theorganization>
History

introduction

since

ISSN 2189-9592

Sumitomo Mitsui Financial Group (2016) firstposted the history since the establishment in thethe

Edo-Meiji era in the pre-integrated phase, andestablishment of three predecessors in the

Mitsubishi UFJ Financial Group

Meiji era

described later, also did. It cannot be concluded

Corporate philosophy and "Mizuho Value"

yet, but such adhering to their roots, seems topostedregardIntroduction of the first or No.1 items inorganization as the inviolable values thatJapan

cannot be imitated, and to enhance the sense of

Introduction of research and consulting

unity within the organization. Also supposed toability that can differentiate from otherlead to uplifting feeling of unity may be theMega Banks

posting of corporate philosophy, introducing the<Always recognizable disclosure of internal
information>

thetraditional

history(2017),

ofthefirst or No.1 items in Japan, and introducing
research and consulting abilities that could

Introduction of management accounting fordifferentiate Mizuho from other Mega Banks.

internal numerical management

In terms of always recognizable disclosure of

Introduction of current situation analysis,

internal information, I can exemplify thatweak points and sense of direction of risk

management accounting figures for internal use

appetite, etc., detailed by each company inare introduced as shown in Table 3. Such

Mizuhoinformation is not statutory, unlike the above-

I will first analyze the content that will

mentioned items that are required to beenhance the sense of unity within thedisclosed in the Banking Law as disclosureorganization. In terms of history introduction,

magazine.

Table 3: Mizuho FG's Net Business Profit by FY 2016 in Each Company (JPY billions)
FY 2016 (result)

Retail & Business Banking Company
Corporate & Institutional Company
Global Corporate Company
Global Markets Company
Asset Management Company
In-house Company Total
Consolidated Net Business Profits

13.0
240.0
115.0
315.0
20.0
703.0
663.4

(*)

FY 2017 (planned)

47.0
218.0
123.0
219.0
24.0
631.0
640.0

Source: Mizuho Financial Group (2017b, p. 8)
Note: (*) Global Markets Company net business profits including Net Gains related to ETF is JPY345 billion (preliminary).
Recalculated the FY 2016 results based on the FY 2017 management account rules. JPY40 billion difference between In-house Company
Total and Consolidated Net Business Profits is due to adjustment of management account which is not attributable to the In-house
Companies.

Mizuho FG divides itself into several
companies,

which

are

businessanyinternal

management

includingdomainperformance evaluation by the company. It canaccording to customer attributes, like otherbe said that to publish the information ofMega Banks. Although it cannot be determinedmanagement account number, originally forbecause it is not clearly stated, it seems that theinternal use, on public information, such as

management accounting figures are used for

integrated report, aims to share information
10

Journal of Japanese Management Vo.4, No.2, May 2020

ISSN 2189-9592

with Mega Bank employees who can always

needs to be devised so that it does not leave away

carry it, and to make them understand thefrom employees' awareness. For the reason

current situation through it. In Mega Banks

above, although it cannot be stated, if items withfrom the viewpoint of information management,high priority are listed in published information

it is prohibited to take internal information,such as integrated reports, Mega Bank

send e-mails, etc., including bringing it to theemployees can always carry such information,

employee’s home, even if it is not personalthen Mega Banks’ information sharing could be

information or insider information. Under suchpractically possible.

circumstances,thepublicized

information

From such assumptions, the high priority

including the integrated report is not subject toissues that SMFG employees are always aware

such restrictions. Similarly, disclosure ofof are three items introduced as SMFG's DNA,

internal information that can be accessed at all

further reduction of costs, and transformation intimes may introduce current situation analysis,business portfolio. It can be assumed that there

weaknesses12, and the sense of direction of risk

is a message saying that value creation isappetite detailed by each company.

possible by being always conscious and acting onthem.

3. Sumitomo Mitsui Financial Group
Sumitomo Mitsui Financial Group (2017)

4. Mitsubishi UFJ Financial Group

states the following information.

Mitsubishi UFJ Financial Group (2017)<Issues to always be aware of>states the following information.

<Showing
commonorganization>

In the CEO message column, introductionof their DNA as "On-Site Strength",

direction

within"Spirit of Enterprise", and "Speed"

Posted a management vision stating the

Explanation of cost reduction by using

spiritual pillars of all executives anddiagrams and graphs

employees

Explanation of transformation of business

Clear statement of the MUFG value

portfolio to avoid competition with domestic

creation process

standard banks13

Introduction of about 360 years long history

Postingofmanagement

philosophy

since

its

establishmentofKonoike(including five keywords "Five Values") andexchange shop, the originator of Sanwa

value creation

Bank, MUFG

I will analyze the posted issues that should

Comparison of figures and ratings withalways be conscious of. Within the organization,

overseas financial institutions

high priority issues that should always be aware

Introduction of efforts for ESG issuesof, from the top management to the bottom,

I will analyze the presentation of the common

12 For example, Mizuho FG's Retail andIndustry Company has listed the "high expense
ratio" (Mizuho Financial Group, 2017a, p. 35)
as a weakness.
13 Domestic standard banks stand for banks

that can operate simply as compared with theInternational Unified Standards Bank, such as
Mega Banks, etc., with the capital adequacy
ratio being 4% or more.
11

Journal of Japanese Management Vo.4, No.2, May 2020

ISSN 2189-9592

direction within the organization. MUFG has

divided into three, using pyramid (also divided

background that was established from the giant

into three from the top to the bottom andorganization merging between the Mitsubishi

described as, "Our mission ", " Our VisionTokyo Financial Group and UFJ Holdings(aiming for medium to long term)", and "Ourthrough

Valuesbusiness

integration.

It

is

an

(we

shouldshare)"),

detailed

assumption at this point, but if they prioritize

explanations for each part, so that different

the process of getting consensus among all

ways of interpretation could not occur. In

employees in such a situation, it will take aaddition, Sumitomo Mitsui Financial Group

tremendous amount of time and effort. For that(2017)

reason, they will first present the organization's

philosophy and value creation, after the history

policy and all employees will follow that policyof SMFG and their financial and non-financial

with some minor adjustments. In order tohighlights.

also

described

theirmanagement

achieve these objectives, it may be necessary to

By showing the whole picture of the value

show common direction within the organization.

creation process and the history that has

It can be inferred that trying to share

survived for about 360 years, MUFG are trying

information

with

MUFG

employees

todescribing

suchdirectioninbyspreadthenecessityofsustainablepublisheddevelopment of the organization in the future

information such as integrated report that canwith their employees. In addition, it is assumed

always be carried out is aimed for the employeesthat making employees aware of the numericalto be always conscious of such direction.

/ rating comparisons with competitive overseas

For further analysis, I assume, the direction

major financial institutions 14 , and lettingthat MUFG would like to show in theemployees recognize efforts towards ESG issues

organization is the management vision first,

as social requirements, are what MUFG wants

which is captured at the beginning in theto have employees in the organization be aware

integrated report as the spiritual pillar of allof.

MUFG executives and employees. Mizuho
Financial Group (2017a) also posted its

5. Conclusion

corporate philosophy and "Mizuho Value" at theI analyzed the contents of the recent

beginning, and divided the triangle pyramid

integrated reports of all Mega Banks and found(divided into three from the top to the bottom

out their role of information sharing support tool.

and described as "Basic Idea", "Vision", andAs a result of this analysis, I found out that the"Value" from the top). Although using a pyramidcharacter of Mizuho FG integrated report isfor easy understanding is the same, the"Enhance the Sense of Unity within thedescription of the management vision ofOrganization" and "Disclosure of Internal

Mitsubishi UFJ Financial Group (2017) was

Information that is always accessible", the

14 According to the Nikkei Newspaper

trillion yen, which is far apart from the second
and the last. Therefore, in MUFG, No. 1 inJapan is commonplace and it can be seen thatcompetition on a global scale is inevitable.

(Morning paper, p. 19) on August 19, 2017,
market capitalization of Mizuho FG is about
4.8 trillion yen and that of SMFG is about 5.8
trillion yen, while that of MUFG is about 9.5

12

Journal of Japanese Management Vo.4, No.2, May 2020

ISSN 2189-9592

character of SMFG report is "Posted Issues

sufficiently recognized both internally andAlways to be Conscious of", and the character ofexternally, therefore the reports are used as

MUFG report is “Showing Common Direction

information dissemination and information

within Organization”. Although it can be

sharing support tool.

affirmed, these characters are presumed to be

Integrated report that has aspects of boththe purpose of utilizing the integrated report infinancialinformation

andnon-financial

each Mega Bank.

information enables us abbreviate the trouble ofWhat derives from the discussion so far is

examining a wide variety of disclosure sourcesthat even a huge organization other than Mega

when learning about the company's outline.

Banks can utilize the integrated report if the

Meanwhile, the company, which is originally onorganization is established through large-scale

the issuing side, can not only externallymerging but still disjointed. Japan's Megatransmit,

Banks are all established through merging ofmanagement's perspective into the bottom

large banks. Although it is difficult to harmonize,

employees by sharing information using theit is necessary to promptly disseminate thereport as strategic tool.

but

also

penetrate

the

top

decisions made by the management division

In the process of expanding companies, it isthroughout the organization. Also, it isimportant to share information with theirnecessarythat

employees. Mega Banks are expected to share

employees should always be conscious of, into anrisk information related to the RAF by postingalways accessible disclosure. In this section,on their integrated report, and to aim at sharing

without fear of criticism, I can affirm that the

information inside of the organization, andintegrated report, which is an information

further operating as an integrated organization.

transmission

Althoughtoincorporate

tool

intendedmattersfor

external

therelevanceofrisk-related

communication, is easy to utilize as information

information on the RAF to the description on the

sharing support tool within the still disjointed

integrated report is not clear, since at theorganization established through merging.

present moment there are no reports of

Although it cannot be asserted, if it has a role ininadequacies in risk governance at each Mega

the integrated report as a strategy tool toBank, therefore I assume that the description

penetrate into the lower-level employees, it can

has some effect.

be greatly expected to be utilized in gigantic

In Mega Banks, the in-house reconciliation

organizations where in-house convergences

does not proceed in many cases, thus in order tohave not progressed after large merger. This ispromptly disseminate the decisions made by thethe conclusion of this paper.

management division, the efforts that areannounced externally are described in the(6) Summary and Future Research

integrated report and the means to execute are

In this paper, I introduced the examples ofneeded. In addition, it is necessary to put down

utilizations of the integrated reports in thethe information that employees should always

major

through

be conscious of as public information that theymerging where their business contents are not

can always recognize. In fact, I analyzed the four

banks

newly

established13

Journal of Japanese Management Vo.4, No.2, May 2020

ISSN 2189-9592

different from the disclosure magazine, as well

(Financial Administration Policy in FY
Heisei 27). Tokyo: Financial Services

as the characteristics of each of the latest

Agency. (in Japanese)elements of the integrated report that are

integrated reports of Mega Banks, and the

Fujita, K. (2016). Kigyo Karano Comment : ESG

purpose of its utilization. As a result, I found out

Toushi-ka

tono

Settenga

Kakudaithe role of information sharing support tool with(Comments from Companies: Expanding

employees in the organization.

Contacts with ESG Investors) (Hidemi

Moreover, the conclusion of this thesis

Tomita (Eds.) "Waza-ari: Learning from theobtained through these analyses is that it isIntegrated Reporting No.6: Marui Group”).

possible to utilize the integrated report even for

Nikkei Ecology, April 2016, 202, pp. 100-

large organizations other than Mega Banks,102. (in Japanese)

which are established through large-scale

IIRC.

(2013a).

The

International<IR>

Framework, International
Reporting Council.

Integrated

companies and oil resource companies that are

Basis for
International<IR>

Conclusions;
Framework,

also established through large-scale merging

International Integrated Reporting Council.

merging but still remains to be disjointed. For
futureresearch,study

targetinghugeorganizations, such as property insurance——.

could be considered.

(2013b).

Ito, K. (2014). Kanri Kaikei ni okeru Tougo

However, at this stage, sufficient verification

Houkokuno

Igi(Importanceofof these points are yet to be completed and aManagement Accounting Research on

future task remains. For further future research,Integrated Reporting). Accounting, 185(2),developing a questionnaire would be required,pp. 160-172. (in Japanese)

which would provide primary data to determine——. (2016). Tougo Houkoku-sho ni Motozuku

if the internal and external use of the integrated

Kachi Souzou Process no Hikaku Kenkyu

reports are fulfilling the roles that I asserted in(Comparing Research of Value Creation

this paper.

Based

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