With many Japanese companies having finally recognized the importance of beefing up their corporate governance, Snow Brand Milk Products Co. is eager to show it is no exception to this trend.
Its operations having been bludgeoned by a series of scandals — including a massive food poisoning outbreak in 2000 and a recent false labeling episode involving a now-defunct meat subsidiary — Snow Brand has taken an unprecedented step in the Japanese corporate world in an effort to regain consumer confidence.
It has appointed a member of a consumer group as an outside director.
The appointment of Nobuko Hiwasa, a 65-year-old public relations officer at the National Liaison Committee of Consumers’ Organizations (Shodanren), is scheduled to be formally approved at a shareholders’ general meeting on Thursday.
Hiwasa has already pledged to impart a consumer’s perspective and instill a sense of crisis in the operations of the major dairy product maker.
“First of all, I’d like to thoroughly examine what has happened to the company from the inside,” Hiwasa, who served as secretary general of Shodanren until May, told The Japan Times in an interview.
To this end, Hiwasa said she would use manuals compiled by third parties.
These include a set of guidelines regarding companies’ conduct in seeking to gain consumer confidence that were drawn up in April by the Social Policy Council, a panel that operates under the Cabinet Office.
On Friday, Hiwasa also became the head of Snow Brand’s corporate ethics committee, a seven-member panel comprising two executives and other individuals from a variety of fields, including a lawyer, a university professor and hygiene experts.
The panel was created at the behest of the Shareholder Ombudsman, an Osaka-based group of individual shareholders that monitors the behavior of companies whose shares are owned by group members.
“Although I first felt reluctant to also hold the post of an outside director, I’d now like to make good use of my authority on the board to ensure that the company carries out what is proposed by the outside committee,” Hiwasa said.
For a member of a consumer group to become an outside director is relatively rare even in the United States, where many firms seek advice on managerial matters from outside directors, she said.
In an effort to regain public trust, Snow Brand has introduced a system whereby consumers can monitor the company’s products and activities. Meanwhile, a number of dairy farmers who suffered amid the firm’s scandals have bought shares in Snow Brand in order to secure a say in the company’s management.
Hiwasa said it is importance for all Snow Brand employees to be engaged in dialogue with consumers and with dairy farmers who supply the firm’s raw materials.
“It is useful for the company to effectively put such dialogue into practice from now on and reform the mind-set of workers, which is difficult to do and yet the most essential thing in improving corporate ethics,” Hiwasa said.
Although Hiwasa acknowledged the fact that Snow Brand workers are good-natured, along with the improvement in the company’s management in the wake of the scandals, she said Snow Brand employees still lack a sense of crisis.
“They (workers) must be well aware that the company is on the verge of collapse. One more accident, and that would be the end.”
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