BDTI Seeks Dialogue with Large Japanese Institutional Investors

On July 27th, BDTI sent this letter to senior persons at Japan’s largest asset managers, asking for a dialogue and cooperation to improve Japanese boards via training, engagement, and data. Right now, we have fruitful dialogues with the many foreign institutional investors who are the source of 99% of donations to BDTI, or purchase our data, but very few dialogues with Japanese large investors. They could probably benefit from what we have learned providing director training to 2,500 persons over the past 11 years, and from what my colleagues and I have learned serving as independent directors for many years…. given that most fund managers have never sat on a board. We sent out letters like this last year, but received no responses. We will let you know what the result is this year; what kind of firms responded (if any) vs. not. (Note: the letter below is a translation from the original Japanese. )

Mr. /Ms. XXXX
XXX Corporation

Dear ______________,

I am Nicholas Benes, Representative Director of the Board of Directors Training Institute (BDTI).

Since its establishment in 2009, BDTI has provided director and pre-director training, and has analyzed data on the status of corporate governance at listed companies, with the aim of improving governance in Japan.

Today, I would like to ask for your help in improving the quality of boards in Japan. This is something which will lead to the greater attractiveness of the Japanese stock market, which is the source of your firm’s profits. I have contacted you because I believe that we are both striving towards this common goal.

I am one of the initial proponents of the Corporate Governance Code, but seven years after its introduction, I am concerned about growing criticism that capital efficiency and profitability have been slow to improve despite the high “compliance” rate of the CGC. In addition, I am worried that the words “ESG” and “sustainability” will become buzzwords or mere PR slogans that do not bring about the corporate transformations that they require. Isn’t governance, as the driver of the ESG “bus,” the thing that must lead companies to change in order to achieve both sustainable growth and improved capital efficiency? For that reason, institutional investors and corporate boards need to have dialogues about governance that lead to concrete actions.

In my own initial draft of the Corporate Governance Code (CGC), I set forth the concept for Principle 4-14, regarding the training of directors and auditors. At that time, BDTI had already been providing director training for four years. We had received praise and positive feedback from participants to the effect that our programs delivered practical knowhow and insights that could not be obtained anywhere else, by discussing things like capital efficiency and decision-making about the business portfolio. With the introduction of the CGC, the number of new directors has increased, and I believe that director training that teaches the true spirit of dedicated governance will become even more important.

BDTI conducts small-group training that covers governance, corporate law, securities law, finance, and the role of outside directors. We use short case studies to discuss a range of key issues. We seriously discuss the expectations of investors, the providers of capital, about returns and growth. We aim to foster “director skills” that can be utilized in the field not only through knowledge, but also “acceptance” of concepts. Please refer to our website ( and the attached materials to learn about our wide range of training programs and services, including e-learning.

BDTI’s “GoToData” activities encompass several services that provide structured, normalized corporate disclosure information focusing most on governance, and are ideal for organizing information and materials to use engagement with companies, and for big data analysis. Foreign quant funds are now accessing this massive time series database to add alpha to their returns.

When your institution engages with investee companies, kindly please add a question about what those companies actually did (the content of training, and who was trained) regarding director training. If you see fit, kindly please suggest that companies sign up for BDTI training courses. I would also like to encourage your company’s stewardship personnel to take BDTI training.

Knowing how boards function in reality and what sort of topics are being discussed nowadays, and how, will enable them to undertake engagement more effectively.

At BDTI, we look forward to working with investors like you to build mutually beneficial partnerships. Please allow us to exchange opinions about what investors deserve (should expect) regarding director training, and to make suggestions about the data that we can provide.

I apologize for the inconvenience, but I would be honored to have the opportunity to meet with you. Please feel free to contact us at for any inquiries.

Best regards

Nicholas E. Benes
Representative Director, The Board Director Training Institute of Japan

1. BDTI Summary
2. GoToData Summary

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