OYAMA, Shizuoka Pref. — Business leaders should be more involved in accelerating the structural reforms that Prime Minister Ryutaro Hashimoto’s government is currently trying to implement, top executives said July 25.
During the second day of the annual summer forum of the Japan Federation of Economic Organizations (Keidanren), business leaders discussed ways of promoting structural reforms, including administrative and financial reforms. Tadahiro Sekimoto, chairman of NEC Corp., said that although various government committees have announced blueprints of those reforms, ways to implement them in detail have not been worked out.
“Since we have better ideas about the conditions (surrounding the nation’s economy and society), business groups are the ones that can take the initiative,” he said. Katsunosuke Maeda, chairman of Toray Industries, Inc., said that to have successful reforms, the nation’s economic conditions must be watched carefully, and that businesspeople can play an important role in sustaining the nation’s economic growth. “Business leaders in each industry should have this aspect in mind to keep the nation’s economy going,” Maeda said.
Other business leaders stressed that Japan needs to implement a drastic tax reform, including a review of the consumption tax and introduction of a numbering system for each taxpayer to help track each individual’s tax record. During the session, the participants in the forum agreed that Japanese firms need to create a strong system of checks and balances on management by hiring more external auditors.
Keidanren opened the forum July 24 with 25 business leaders in attendance. In response to recent payoff scandals involving Nomura Securities and Dai-Ichi Kangyo Bank, some corporate leaders expressed their opinions on corporate governance and how companies should be managed.
“The issue of corporate governance is a problem involving both corporate ethics and the current company system,” said Kenichi Suematsu, adviser to Sakura Bank. Toru Hashimoto, chairman of Fuji Bank, proposed that more than half of the auditors in a company be external auditors.
Although the Commercial Code currently requires large corporations to have at least three internal auditors and one outside auditor, outside auditors are still uncommon in Japanese firms and in general do not have much influence over decisions made by a company’s board of directors.