KARUIZAWA, Nagano Pref. -- Japanese-style management must undergo reform to place more focus on shareholders and establish effective corporate governance, according to business leaders at the 12th summer seminar of the Japanese Association of Corporate Executives (Keizai Doyukai).
During the session July 18 of the two-day seminar, participants suggested that Japan's corporate culture nurtures wrongdoing, such as in the current scandals involving Nomura Securities and Dai-Ichi Kangyo Bank. Harumi Sakamoto, vice president of Seiyu Ltd., said that to achieve corporate governance, Japan's corporate culture needs to change its focus from seeking internal harmony to facing internal opposition.
"Corporate scandals in Japan often occur when management cannot stop (firms') past practices. This is different from cases in which people are engaged in misconduct for their own private interest," Sakamoto said. "It is not comfortable for them to change the long-standing practices of the firms. But, leaders must face internal opposition (in doing so)," he said.