If the company intends to put an end to the matter by replacing its top official, it should be considered as seriously lacking a sense of crisis. It should prioritize, above all, properly holding itself accountable.
Mitsubishi Materials Corp., a major nonferrous metal manufacturer, announced that new misconduct was found, this time at its own unit of Naoshima Smelter and Refinery in Kagawa Prefecture. The smeltery has shipped products to be used for freshly mixed concrete with a JIS (Japanese Industrial Standards) label despite having not met the criteria.
Mitsubishi Materials in March compiled its final report saying that its five subsidiaries had manipulated their products' inspection data or concealed illicit acts.
Mitsubishi Materials' top executives, including President Akira Takeuchi, did not announce the latest misconduct at that point, despite their having been aware of it.
At the time it publicized its settlement of accounts in May, Mitsubishi Materials explained that the misconduct was found only at its subsidiaries, but not at any of its own units.
The certification authority of JIS has revoked the Naoshima plant's certification, on the grounds that there were problems with quality standards. The company should have announced its own misconduct before it was pointed out by such an external organization.
The appropriate disclosure of information is a fundamental rule deemed essential for sound corporate management. It is unavoidable for the series of responses made by Mitsubishi Materials to be criticized as irresponsible.
Stop negative chain reaction
As to why the company had not disclosed the misconduct on its own, it excused itself by saying the case did not stem from intentional data alteration.
This claim excused the latest case as due to an entry error, not a fraudulent act. But as long as the company shipped out products that did not meet the criteria, the claim is far-fetched. It will be difficult to win the understanding of its shareholders and others.
Even when the misconduct of Mitsubishi Materials' own unit was found, Takeuchi did not make clear the course of action he would take. Only after criticism later intensified did Takeuchi decide to resign from his post.
In spite of having the greatest responsibility regarding corporate governance, he apparently had a weak understanding of what it means to be the head of a corporation.
Takeuchi will remain with the company as chairman with no right of representation, saying he would work toward organizational reforms. Under this system, however, it won't be easy for the company to make a drastic fresh start.
To fundamentally reform its corporate character, it is vital for the company to take up its duty to explain the situation. Mitsubishi Materials has yet to reveal such specifics as the volume of products involved in the misconduct at its own unit.
The company should reveal the whole picture of its problem quickly, while at the same time clearly presenting more concrete measures to prevent the recurrence of such misconduct.
It is a serious state of affairs that there seems to be no end to the falsifications of data regarding products and fuel efficiency involving Japan's leading material manufacturers and automakers, including Kobe Steel, Ltd. Top officials have resigned one after another.
Unless the chain reaction of negativity is severed, trust in Japan's manufacturing culture cannot be recovered. It is necessary for the industry as a whole to grapple with reforming corporate governance.
(From The Yomiuri Shimbun, June 18, 2018)
Read more from The Japan News at https://japannews.yomiuri.co.jp/
