Governance guru pushes Japan Inc. to open up and diversify

Former trailblazing dean Christina Ahmadjian finds her balance between the classroom and boardroom

Christina Ahmadjian, an academic and expert in corporate governance, sits on the boards of several Japanese companies, including Mitsubishi Heavy Industries and Japan Exchange Group, the holding company that oversees the Tokyo Stock Exchange. Often the lone foreigner and only woman in the room, Ahmadjian relishes playing gadfly and applying her research to real-life situations.

“Just my presence makes a difference,” she explains, “as these company presidents are forced to answer my questions, and I have a voice to ask: ‘What effect will this decision make on your shareholders? How does this affect other stakeholders?’ “

Ahmadjian welcomes recent moves to open up corporate governance in Japan, buoyed by support from Prime Minister Shinzo Abe’s government, which has introduced a range of measures to shake up the membership of Japan Inc.’s notoriously insular company boards.

Ahmadjian has been pushing for more transparent governance since 2000, when she came to Japan for research. It’s a cause she brought with her to her last job as trailblazing dean of Hitotsubashi University’s Graduate School of International Corporate Strategy and her current post as professor at Hitotsubashi’s Graduate School of Commerce and Management.

It’s an upstream battle, and some days Ahmadjian admits she feels like she’s just treading water.

“Every second has been a real challenge,” she says. “I just feel a true mission to make things better in the boardroom — to give people more of a global outlook and a way to enable companies to accept diversity, to understand how to manage globally.”

Part of her motivation comes from her multicultural upbringing. Ahmadjian grew up navigating various linguistic currents without a compass, listening and learning in diverse cultural contexts.

The daughter of first-generation immigrants to America from Armenia and Sweden, Ahmadjian recalls: “My father’s parents only spoke Armenian at home, ate Armenian food and practiced Armenian customs. My mother’s family spoke Swedish at home, celebrated Swedish holidays, ate Swedish food. I didn’t speak Armenian or Swedish, so I grew up used to these multicultural settings where I couldn’t communicate with words.”

Ahmadjian admits her upbringing made her “fascinated with different cultures and different ways of doing things.”

Marked by both intelligence and a strong work ethic, Ahmadjian entered Harvard as an undergraduate, planning to study French. However, after discovering that “everyone majors in French,” she opted for something different: East Asian studies. Ahmadjian chose Chinese and studied in Taiwan for her junior year abroad. After graduating magna cum laude (“with great honor”) in 1981, she immediately headed East — but to Japan.

“It was the worst job market in America at the time and one of my professors, Ezra Vogel, recommended Japan to teach English and learn about the ‘Japanese miracle’ in business,” says Ahmadjian.

Fluent in Chinese, Ahmadjian was also curious about studying Japanese, and she taught English briefly before she was hired by Mitsubishi Electric, one of the biggest companies in the world, to work in their Department of Overseas Factories. Laughing, she admits, “On the first day, they issued me a uniform and handed me a stack of dirty ashtrays.”

Only 22 years old, her duties mostly consisted of checking faxes and other correspondence in English, giving factory tours to visiting foreigners and serving tea and coffee — a typical “office lady” in Japan with an English-language spin.

The experience ignited Ahmadjian’s curiosity about the diverse culture of business, and she returned to the U.S. after two years to get her MBA at Stanford. But after graduation in 1987, Ahmadjian found her experiences abroad were not valued stateside.

“There’s so much talk about how not-global the Japanese are, but 20 years ago in the States, it was the same way,” she says. “After four years in Japan, speaking relatively good Japanese and high-level Chinese, and then going out in the American job market and saying, ‘I want to do Asian business,’ people were saying to me: ‘We don’t need you. We would rather send someone from our company and they don’t need to speak Japanese. Your international expertise is irrelevant.’ “

Ahmadjian worked several years as a consultant, but soon realized her skills didn’t match.

“Consulting is a business model of persuasion and selling — consultants add a lot of value to the company, but it is still persuading people of your answer,” she explains. “A professor presents all the information, but consultants must give a proposal, a definitive direction. I hadn’t wanted the academic world, but I kept coming back to wanting to research and study the theory before applying it in the business world.”

She received her Ph.D. from Berkeley in 1995, drawn to their Organizational Behavior and Industrial Relations program, which focused on Japanese business. After teaching at the Columbia Business School for five years in New York, Ahmadjian was awarded an Abe fellowship for a one-year sabbatical in Japan in 2000.

“Japanese corporate governance is traditionally interconnected. Studying Japanese business groups like the Mitsubishi Group or the Toyota Group and how members of these groups held each other’s shares and made decisions, I realized it is about networks and connections, but it is also about how decisions are made, and ‘Who are corporates ultimately answerable to?’ ” she says. “These are really big issues right now: Who is on the board of directors; the relationships with shareholders; who does this corporation really belong to? In the U.S. it is very much the shareholders’ corporation, and based on that model, the corporation’s goal is to maximize shareholders’ value. In Japan, it is completely different.”

Ahmadjian enjoys the opportunity to broaden perspectives not only in the boardroom but also the classroom. She has challenged the status quo as a professor, too, serving as a rare female foreign dean at Hitotsubashi’s Graduate School of International Corporate Strategy five years ago, a position she held for a two-year term.

Ahmadjian admits she missed research and working with undergraduates, and she is now part of an honors program at Hitotsubashi that tries to meld the best of Japanese business with trends in globalization.

The program honors Eiichi Shibusawa, widely considered the “father of Japanese capitalism,” an industrialist who revolutionized Japanese business after the Meiji Restoration of 1868. As Ahmadjian explains, “For Shibusawa, business was a tool to develop society, so he not only started over 500 companies, he also founded the Japanese Red Cross, he was instrumental in founding women’s universities and high schools, he founded the earliest predecessor of Mizuho bank, Nikkei Shinbun, the Tokyo Stock Exchange. He founded a paper company so he could print newspaper — that was his kind of thinking, and he is like the godfather of Hitotsubashi, and a great role model for our students.”

The program accepts 15 Department of Commerce students each year. Once accepted, they take a third of their classes in English, but Ahmadjian stresses the importance of studying two-thirds of their classes in Japanese.

“As part of this whole globalization push, I don’t believe a Japanese university should teach only in English,” she says. “It may make sense in the sciences, but not in business, where communication is key. We want them to be comfortable with English, but we also want them to be comfortable discussing and interacting in Japanese.”

The students take classes in cross-cultural management and global leadership, including a one-year exchange program abroad.

Having reached this balance between classroom and boardroom, Ahmadjian says she is satisfied.

“I have achieved what I really wanted to do, combining teaching and research, but also being really active in the corporate world and hopefully using my research to be a force of good in the corporate world,” she says.

When it comes to the state of Japanese boardrooms, however, she knows there is still a long way to go.

“Japan corporate governance has made steady improvements, but the pace is slow,” she explains. “There is still resistance to outside directors; there is still an attitude of ‘We don’t care about our shareholders, we care about company values.’ “

Until Japan Inc. comes to fully accept that both are important in the global business world, Ahmadjian says she will continue to play the gadfly, bugging boardrooms to embrace change.

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