How can its voice be enhanced to invigorate corporate activities and shore up the economy? The top leader of a leading industrial organization bears a heavy responsibility in this regard.
Hiroaki Nakanishi, chairman of Hitachi, Ltd., has become the new chairman of the Japan Business Federation (Keidanren). His appointment is recognition of the management ability he displayed in reconstructing the Hitachi Group.
Nakanishi is the first Keidanren chief in many years to hail from a general electric machinery maker, following Toshio Doko of Toshiba Corp., who served in the post until 1980. At that time, proposals by Keidanren, which then consisted mainly of large-scale heavy manufacturing firms, had a huge influence on government policies.
The industrial structure today has undergone rapid change with the emergence of giant information technology companies, such as Google, Inc.
In a news conference after he assumed the post, Nakanishi emphasized, "Capturing changes in the digital era could contribute greatly to the economic growth of Japan."
His activities in the business world have so far concentrated on plans to make full use of artificial intelligence and big data.
As chairman of Keidanren, Nakanishi is called on to take the lead in assembling cutting-edge technology and expertise beyond the boundaries of businesses, universities and research institutes. It is hoped that he will make more persuasive proposals that look ahead of the times.
To enhance the effectiveness of such recommendations, collaboration with the government is indispensable. Nakanishi has presented the idea of basically following the cooperative stance promoted by his predecessor, Sadayuki Sakakibara. This could be a reasonable judgment.
Rebuild corporate governance
Sakakibara decided to resume Keidanren's engagement with corporate political donations, which had been suspended for five years. He called on member companies to cooperate in agreeing to raise wages as encouraged by the government in spring wage negotiations. As a result, pay hikes of more than 2 percent were realized for five consecutive years.
But there was dissatisfaction among some member companies that Sakakibara "lacked an assertive stance" toward the government as he excessively prioritized improving relations with it.
It is essential for the business world and the government to maintain a favorable relationship. But if Keidanren's subservience to the government goes too far, it will not be able to exert its influence.
Keidanren has the role of making the private sector's opinions be reflected in the government's important policy agendas, including fiscal reconstruction and social security system reforms. The business lobby should make firm requests to the government at times through such forums as the Council on Economic and Fiscal Policy and the Council on Investments for the Future, both government advisory bodies.
Business circles also have issues of their own to tackle.
Trust in Japan's manufacturing industry has been rattled due to the repeated occurrence of corporate scandals. It is extremely serious that data have been altered and irregularities covered up at companies that are representative of Japan, including Kobe Steel, Ltd. and Mitsubishi Materials Corp.
Corporate governance must be rebuilt promptly to prevent a recurrence of misconduct.
Whenever a problem arises, the crucial point is how precisely the top management can grasp the situation and how quickly it can take responsive measures. Business circles as a whole must work out measures to prevent a recurrence of scandals.
(From The Yomiuri Shimbun, June 2, 2018)
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