No matter how great a product may be, if it’s difficult to use, no one will use it. In that vein, a company is only as good as its IR material. And if that company’s IR material is available in multiple languages, care must be taken that all versions – especially the English and, increasingly, the Chinese versions – are up to snuff as well.
 Sarah Ingmanson is an IR consultant who specializes in the Japanese market |
The easier and seemingly safe strategy is to provide a literal translation of the native language. Now, a literal translation may be a high-quality translation, but that doesn’t mean it communicates well to a global investor. The hallmarks and inevitable outcome of a literal translation from Japanese into English are excessive passive voice, extremely long run-on sentences, unfamiliar phrases and strange word choice.
Improving the translation to stand on-par with US and European peers presents an opportunity for Japanese companies to re-emerge on the global investment scene as companies that tend to the needs of all stakeholders – even the non-domestic ones. Until the English translation is modernized, a ‘Japan discount’ will persist.
Similar to a conglomerate discount, a Japan discount is one in which global investors discount the perceived value of a Japanese company because of the extra mile or leap of faith one must take to decipher the translation and get to the essence of what the company does and how well it is doing it. Whether of the conglomerate or Japanese variety, this discount is a cost associated with unlocking the mystery and complexity of the company message; and it is a cost many don’t care to pay after various corporate scandals have rocked Japan from seemingly unlikely places.
To further complicate progress, implementing this type of change at a traditional Japanese company requires buy-in from the top and broad-based support. Unlike the IR function in the West, IR at a Japanese company is typically a short resting place. Most staff are rotated through the function as part of their management development and many in IR are junior level or low-ranking executives.
Even if the individual in charge of investor relations perceives that a literal translation fails to communicate well to a global investor, he or she is usually unable to implement change without building a consensus view – and consensus takes time, patience and energy. Often, someone else needs to exert pressure from the top. That someone could be a director of the company’s board, a large global institutional investor, an influential activist, the regulatory bodies in Japan, or the investor relations community as a whole.
At present, you will be hard-pressed to find a Japanese company in a global IR ranking or even included in a global IR study. This is another manifestation of the Japan discount. Consequently, the IR awards handed out to Japanese companies are coming from within Japan where only the Japanese versions of their website and materials are being assessed. Without outsider attention to the English versions, companies aren’t feeling tremendous external pressure to improve this aspect of their offering. Global investors deserve IR content that rivals what Japan’s peers in the Americas and Europe are delivering.
Sarah Ingmanson is an IR consultant who specializes in the Japanese market
This article appeared in the Spring 2016 issue of IR Magazine
