There is only about one month left. It's a little early, but I would like to take a look back at the remarks of the heads of listed companies and well-known companies that have caused a lot of attention.
Among the statements made by the top management extracted from the press conference and the report of the third-party committee, there are some superstitions and unusual remarks that make you want to plunge in, "Did the president really say this?"
What is reflected from this is not only the raw true intentions of the management, but also the real image of a serious company that lacks governance, or a part of the state of the world. (Takahiro Sato, Economic Department)
"It's blasphemy against those who love golf!"
Big Motor, which is a top company in the industry, has been uncovered one after another of malicious fraudulent activities related to insurance claims.
Amid severe questions about social responsibility, then-President Hiroyuki Kaneshige made his first public appearance on July 7.
At a press conference, Mr. Kaneshige denied any involvement in the fraud, saying, "I swore to Tenchi Shinmei and did not know."
He expressed his anger at a series of injustices and uttered the following words with a strong voice.
Hiroyuki Kaneshige, former president
of Big Motor: "When I received the report, I really couldn't believe my ears. Put a golf ball in a sock and swing it around to increase the damage area and inflated the claim. Inexcusable. Hurting with a golf ball is an insult to someone who loves golf!"
"Why golf instead of a car?" became a hot topic on social media, and I think many people "couldn't believe their ears".
It became a symbolic scene that showed the company's constitution that has neglected its customers.
Big Motor is a "large company" under the Companies Act.
In addition, we are also a company with a board of directors, and the board of directors is obliged to hold a meeting of the board of directors at least once every three months, and the representative director and executive directors are obliged to report on the status of their duties.
However, until the fraud was discovered, the board of directors meeting that met the requirements of the Companies Act was never held, and there were no minutes of the board meeting.
What kind of corporate culture was formed under a management team that ignored the rules?
The report of the Special Investigation Committee concluded that "abnormal personnel appointments were carried out, such as frequent demotions."
The report
of the Special Investigative Committee: "It must be said that under the operation of the authoritarian demotion penalty, an uneven corporate culture was fostered in which employees followed the instructions of the management as they were."
"Kuro is guessed, but we don't investigate, we have no choice but to believe..."
Next is Sompo Japan Insurance, which has had a close relationship with Big Motor for many years.
Sompo Japan Insurance Co., Ltd. was the only one of the three major companies to resume transactions in July last year after receiving information that there was a possibility of fraud in Big Motor's insurance claims, but did not conduct additional investigations.
The company decided on this policy at a board meeting held on July 7 last year.
Here, President Giichi Shirakawa will make a statement that will determine the direction of the resumption of trading.
Sompo Japan Insurance President Yoshikazu Shirakawa
said, "As a fact, it is speculated that it is fraudulent, but it is difficult to overturn the contents of Big Motor's report. What about the option of resuming transactions without conducting additional investigations and conducting sampling surveys by taking advantage of recurrence prevention and control functions? When it comes to investigating the four plants, we have no choice but to trust Big Motor's president, Kaneshige."
President Shirakawa emphasized his relationship with Big Motor while expressing the view that "fraud is inferred" and even insisted that he had no choice but to believe the other party.
There was a series of criticisms for prioritizing profits and tacitly tolerating fraud, and finally President Shirakawa announced his resignation.
At the press conference, President Shirakawa expressed regret, saying, "We did not come to the realization that this was a serious risk to the management of the Company, and we lacked the perspective of customer protection and society."
What should be seen as a problem here is that executives such as vice presidents, who should be checking whether there are any problems with the president's judgment, played a role in reinforcing the wrong judgment by saying that it is doubtful to dig up past stories.
It must be said that not only was there a problem with the president's sense of risk, but also that the company's governance system itself was deeply flawed.
In the interim report of the Outside Investigation Committee released on October 10, it was pointed out that "the fact that the president readily agreed to the proposal was considered to be a manifestation of his willingness to take responsibility for others and not object to it if someone other than himself made the decision, and it is unacceptable that he lacked the independence appropriate for management."
The focus will be on how the on-site inspections currently being conducted by the Financial Services Agency will determine the issue of the governance system, including the parent company.
"What's wrong with just eating with an old acquaintance?"
Speaking of the Prime Market, it is the top-tier market of the Tokyo Stock Exchange, where only companies with a high level of governance are allowed to be listed, but this year an unprecedented scandal occurred in this market that represents Japan.
The building that houses Sanei Architectural Design
It is a problem that former president Shinzo Koike, the founder of Sanei Architectural Design, is said to have provided money to gang members.
On August 8, the company released the investigation report of a third-party committee made up of lawyers.
In it, it was concluded that the former president "can be recognized as having cooperated with the knowledge that the check would be given to a gang member."
The third-party committee stated that the former president and the gang members had a relationship of more than 15 years, and pointed out that "it is absolutely unforgivable for the head of a listed company that the former president has maintained a relationship with antisocial forces for many years and has secretly appointed a person in charge to respond to them."
By the way, according to the report of the third-party committee, in September last year, when the police searched the company, some executives gathered in a large conference room on the 9nd floor of the head office at night and rebutted as follows.
"What's wrong with just eating with an old acquaintance? We do not associate with anti-social forces and have no relationship with them."
However, in response to the hearing of the third-party committee, former President Koike replied, "I had heard about it before the listing," and said that there was a recognition that the other party was an organized crime group before 2006, when the company was listed.
The report of the third-party committee found that the internal culture of not being able to express dissenting opinions against the former president allowed the former president to have a one-man management system, and that "the fact that there were officers and employees who were aware of the relationship between the former president and the gang members to a certain extent, but were unable to take action to resolve it, even if we take into account the enormous influence of the former president. We can't say that there weren't any compliance issues."
Again, I think it can be said that the background was that the executives who were supposed to check the top management were not fulfilling their duties.
The company was acquired by real estate giant Open House Group in October, and has since been delisted.
"It was a necessary expense to relieve the stress caused by the pressure of being the president."
Lastly, we will focus on Tamron, a camera lens manufacturer listed on the Prime Market of the Tokyo Stock Exchange.
According to the investigation report of the Special Investigation Committee released by the company on November 11, former President Shiro Usaka and his predecessor Morio Ono, who resigned in August, diverted the company's expenses for personal use and made the company bear the cost of eating and drinking with women or alone.
Since fiscal 2, the amount will be more than 8 million yen for former President Usaka and more than 2013 million yen for former President Ono.
Why did the company bear such a huge amount of expenses?
Former President Ono explained to the Special Investigation Committee's investigation that it was a necessary expense to relieve the stress caused by the pressure of the president's job.
The report of the Special Investigative Committee severely criticized this, saying, "Work is more or less stressful, and the release of stress should be covered by personal expenses, and it is not possible to close the open mouth to the extent that it can be used as a company expense because it is the president."
Even after former President Ono retired as president and became an advisor, the company was responsible for expenses such as food and drinks.
The reason for this was that it was necessary to relieve the stress caused by putting up with interfering in the management of the company.
It's quite painful that the counselor is also under a certain amount of stress, but the report dismisses it as "exhausted and speechless."
Furthermore, he pointed out that "in other words, it only caused the moral hazard of wanting to have fun with the hostess and the company's expenses, and the most important cause of this case was that the employee did not have the morals to be an example of the initiative," and expressed the view that the root cause was the problem of the quality of the management.
According to the report, the tacit understanding that "food and beverage expenses can be borne as company expenses in order to relieve stress" has spread to other executives, and there have been cases where executives other than former presidents Usaka and Ono have diverted company expenses for personal use in the same way.
And as with the companies mentioned so far, he points out that "there was a tendency to make the president's domain a sanctuary, and to not be able to express opinions to the president, or to silence opinions about the president."
What is corporate governance, and managers should understand its principles.
In the midst of the need to strengthen governance, why are there still a series of such "superstitions" and "strange remarks" by top management?
We interviewed Hideaki Kubo, a lawyer who has been working on corporate governance issues for many years.
Hideaki Kubo
: "In Japan, corporate governance is translated as corporate governance, but many managers may misinterpret the word 'governance' as 'the management of the company to do good management in the company.' There are many directors from Japan companies who came from the company in question, and it is difficult for internal directors who are subordinates to control the actions of the president, who is the head of the company. Overseas, CEOs = CEOs and other executives are positioned as one of the "employees", and governance by outside directors is easy to work with. First of all, it is most important to understand the principle of overseeing management."
Only if you can say, "It's my responsibility," can you be in charge
The arrogance of top management and lack of risk sense, the corporate culture in which management cannot express opinions to the top, and the irresponsible constitution that sticks in the management ... The background to the superstitions and quirks of the top management was these issues related to the qualifications of top management and the governance of the organization.
For many Japan companies, strengthening governance is still a long way off.
Rather than being satisfied with the fact that corporate governance has been formalized, managers need to understand the original meaning of governance and be aware of their own responsibilities.
"It is only when you can say, 'It is my responsibility,' that you can be in charge" (Konosuke Matsushita) I would like to hope that "quotes" will resonate with today's managers.
Featured
Next week, economic statistics will be released one after another in the United States.
In particular, investors are interested in the "PCE Deflator / Core Deflator," which shows the trend of consumer spending in the United States, which will be released on the 30th.
The Federal Reserve also considers it important as an indicator of upward pressure on prices at the consumption stage.
On the same day, the PMI = Purchasing Managers' Index for manufacturing and non-manufacturing in China will be released.
It is attracting attention as data for the outlook of the Chinese economy.