Public contrition has long been an art in Japan, and this past month has offered a great opportunity to study the form. June has seen a sudden rash of apologies from top CEOs (including the bosses of Toshiba, Sharp, Takata and Toyota) and Prime Minister Shinzo Abe. The chastened executives have each stood stiffly before a sea of cameras, begging forgiveness before plunging into a deep bow. (Tears were optional.)
The apologies have coincided with Abe‘s much-touted June 1 introduction of a corporate-governance code compelling executives to be more accountable. (The reforms include rules urging investors to speak out against management, and modest efforts to force CEOs to boost returns on equity.) The prime minister might even be tempted to cite the parade of contrition as evidence that his policy is working.
That would be a mistake. Japan’s shame culture, at least in the business world, has always been more about distraction than accountability, and this past month‘s examples are no exception. Corporate apologies have allowed CEOs to feign taking responsibility for crises, before returning to business as usual.
Take Thursday’s apology by Shigehisa Takada, CEO of Takata, whose deadly airbags have made global headlines in recent months. His carefully crafted statement referred to eight deaths and hundreds of injuries dating back more than a decade. But he stonewalled where it mattered most -- on the question of whether the company would accept a financial burden for producing flawed products by compensating victims.
Toshiba‘s CEO, for his part, expressed regret earlier this month for a widening accounting scandal, but glossed over how it happened, who’s being punished or how to fix the problem. And the head of Sharp bowed to shareholders, but offered no new thoughts on how his company might revive its money-losing businesses or manage a huge debt load.
In the West, moments of corporate atonement tend to focus on the lessons from a crisis and how to avoid another. In Japan, they‘re about defusing the public outcry -- they tackle only the symptoms of a crisis, not the underlying problem.
“It’s a Kabuki ritual,” says Robert Whiting, author of several books on Japanese culture, including “Tokyo Underworld” and “You Gotta Have Wa.” “Official in charge bows deeply in apology and, perhaps, resigns, but then re-enters again from the back after media interest has died down and the price of the company‘s stock is back up. You see the same thing in politics.”
Abe’s own recent gestures seem to fit the pattern. On June 5, he apologized for alarming the public following a breach of Japan Pension Service data. It‘s hardly the first time that such a breach has occurred, but Abe offered no details on what he plans to do to protect sensitive information in the government’s possession.
The most important apology of Abe‘s career is expected to come in August on the 70th anniversary of World War II’s end. Officials in China and South Korea have, with good reason, expressed worry that Abe will offer watered down confessions of Tokyo‘s previous crimes. Abe believes Japan has unfairly been cast in the role as wartime aggressor and that other countries have exaggerated stories about the Imperial Army’s brothels and sex slaves.
But part of the problem has to do with Japanese culture. Apologies in Japan tend to be vague and sweeping so as to cover all possible past, present and even future scenarios. That helps to explain why, despite myriad apologies about its colonial past and World War II misdeeds, much of Asia says Japan is still obfuscating.
For executives, deciding how to express regret is a careful process. Shamed executives can consult any number of books (like 2007‘s “Apologizing That Way Will Endanger Your Company” by Tatsumi Tanaka) to help them pick from among the dozen or so most common penitential phrases. They hope to display a proportionate amount of guilt and contrition -- while leaving themselves maximal wiggle room, says Colin Jones of Doshisha Law School in Kyoto.
“One of the things about Japanese corporate apologies is that it is not always clear who they are directed at,” Jones says. “And that’s the whole idea.”
Toyota‘s ambiguous apology this month was a case in point. CEO Akio Toyoda bowed for the cameras to atone for the arrest of American executive Julie Hamp on narcotics charges. He steered entirely around the most important issues -- namely, who exactly bore responsibility for the public uproar. He was careful not to address the appearance of selective prosecution in the case, or the question of why police made it public with myriad press leaks.
Until Japanese CEOs back up their apologies with concrete action to change their ways and become more accountable, their words will ring hollow -- as will government efforts to improve the sorry state of the country’s corporate governance.
By William Pesek
William Pesek is a Bloomberg View columnist based in Tokyo and writes on economics, markets and politics throughout the Asia-Pacific region. His journalism awards include the 2010 Society of American Business Editors and Writers prize for commentary. -- Ed.
(Bloomberg)