It caused quite a sensation in business circles when Toray’s chairman Sadayuki Sakikabara was named as the new chairman of the Japanese business lobby Keidanren on January 10th, not just because he was not a current vice chairman of Keidanren as was usual but also because Takashi Kawamura, Chairman of Hitachi and favourite to be chairman of Keidanren, had just announced that he had declined the offer and furthermore would be stepping down entirely from the Keidanren as of June of this year.
Kawamura made the announcement at the press conference for nomination for HItachi’s own new President, Toshiaki Higashihara, on January 8th, earlier than usual, but it is assumed it was to put an end to the speculation that Hiromasa Yonekura, the current Keidanren chairman, was still trying to woo over Kawamura.
The official reason Kawamura gave was his advanced age (74) – but Sakakibara is 70, so hardly significantly younger. According to the Nikkei Business magazine (in Japanese, subscription) there are more significant reasons behind Kawamura’s exit from the Keidanren, showing Hitachi’s distancing of itself from being a “star pupil” in the Japanese business firmament, instead aiming to be a star on the world stage. “Being active in the political arena is important, but it was difficult to do that and also do the job I had to do for the company” says Kawamura.
Hitachi is also thought to be hostile to many of recent Keidanren stances such as opposing external directors becoming a legal requirement. Hitachi itself has 8 external directors amongst its 14 strong board, of whom 4 are non-Japanese. Although Hitachi is expected to announce its highest profit in 23 years, it has also shown a lack of interest in Prime Minister Abe’s urging that companies raise salaries.
Nakanishi, the President of Hitachi points out that they have already reformed their pay structure to make it more motivational three years’ ago as part of the company revival plans. Any base pay rise would only affect less than a fifth of their workforce.
As a Hitachi insider says, to Kawamura and Nakanishi, “all this debate about compulsory external directors and raising wages is old hat” – their main concern now is to prevent any sense of complacency inside the company, as they try to turn the company into one that can compete globally with Siemens and GE.
For more content like this, subscribe to the free Rudlin Consulting Newsletter.