• Announcement of Vice Chair Candidates
• Companies Act
• B20
• Friction between the US and China
• Erroneous Statistics
• Inappropriate Social Media Postings by Employees

Announcement of Vice Chair Candidates

Today I provisionally nominated vice chair candidates to be formally appointed at the General Assembly meeting on May 30. Current vice chairs Kunie Okamoto, Katsunori Nagayasu, Shunichi Miyanaga, Masakazu Tokura, Masami Iijima, and Yasumi Kudo will step down on that date. Six new candidates have been put forward: Kuniharu Nakamura, Chairman, Sumitomo Corporation; Nobuyuki Hirano, President & Group CEO, Mitsubishi UFJ Financial Group, Inc.; Hitoshi Ochi, Representative Corporate Executive Officer, President & CEO, Mitsubishi Chemical Holdings Corporation; Koichiro Watanabe, Representative Director, Chairman of the Board, The Dai-Ichi Life Insurance Company, Limited; Hiromichi Shinohara, Chairman of the Board, Nippon Telegraph and Telephone Corporation; and Tetsuji Ohashi, President & CEO, Komatsu Ltd.

They have been selected based on overall assessment of their characters, knowledge, management skills, and leadership in their respective industries. Keidanren vice chairs fulfill a role similar to corporate executives, and I have chosen people at the top of each industry. Moreover, digital transformation will extend beyond technological innovation to change our entire social structure, and each of these six nominees has a strong record of attainments in this regard.

In these rapidly changing times, I would have liked to include leading businesswomen and top managers from IT enterprises and startups among the vice chair candidates. However, Keidanren is a membership-based organization, and it will take time to change mindsets and convince all stakeholders. Many top managers wish to have their views reflected in policies relating to data, and a growing number of executives from IT companies and startups are expressing a desire to participate in Keidanren activities. The appointment of a top manager from the IT industry may not be far off. Before women can be appointed, however, our member companies will first need to promote women within their own organizations. This is an issue for individual companies, but also a problem with social structures as a whole. Corporate management requires the views of not only women, but also a diverse range of people. It will be vital to decide targets and schedules and make determined efforts to promote more active roles for women.

Companies Act

Independent outside directors play valuable roles in corporate management. Leading a company in the right direction requires the views of various people with sound judgment. Depending on the nature of the company or business, some enterprises do not even need outside directors. I do not oppose the appointment of outside directors, but I question whether this needs to be determined by a uniform law. Directors' remuneration should also be decided based on a range of opinions. It is not simply a matter of consulting general meetings of shareholders. The revisions to the Companies Act currently under deliberation are taking an appropriate direction. The important thing is to clearly separate supervisory and executive functions within companies.

B20

The B20 Tokyo 2019 summit on March 14-15 will bring together business leaders from around the world to discuss global economic direction. The main theme will be "Society 5.0 for SDGs." A joint declaration is currently being drafted. The message for the international community will be that digital transformation will be used to resolve social issues, leading to delivery on SDGs. Unlike the B7, the B20 sometimes experiences differences of opinion among participating countries, depending on their individual circumstances. For example, China and India have their own laws on data handling, aspects of which do not sit comfortably with the concept of "Data Free Flow with Trust" (DFFT) advocated by Prime Minister Abe. The Trump administration in the US prioritizes bilateral negotiations over multilateral frameworks. However, many US business leaders firmly believe in the importance of the WTO and free trade, and the business communities of Japan and the US are in accord on this point.

Friction between the US and China

Points of contention between the US and China embrace a wide array of issues, extending beyond tariffs to include intellectual property and equal terms for competition with state-owned enterprises. Even if some form of progress is made before the March 1 deadline for talks, dialogue is likely to remain confrontational. At some point, both sides will need to compromise. Management of Chinese enterprises needs to be open and highly transparent. Not all of the issues will be resolved at once, and it will be important to continue meaningful negotiations. Japan can play a role in this process.

Erroneous Statistics

Compiling statistical surveys is unglamorous but important work. I understand that understaffing in statistical departments was a factor behind the problems with erroneous statistics. Trust cannot be restored overnight, and will only be rebuilt through steady results. Keidanren is discussing revision of statistical systems, and our deliberations include considering whether conventional data-gathering methods can provide an accurate picture of the real economy and whether methods can be computerized and automated.

Inappropriate Social Media Postings by Employees

Companies are managed on the assumption that they have a variety of employees. Even if strict disciplinary measures are taken against employees who trigger problems through conduct such as posting inappropriate videos on social media, management should first consider creating mechanisms for employee education and training. We must keep in mind that operations relying on the good intentions of individuals could fall apart at some point.