Selection of Next Keidanren Chair to Kick into High Gear; Field Could Be Winnowed by Strength of Candidates’ Firms

By Shinsuke Ishiguro / Yomiuri Shimbun Staff Writer

1:00 JST, June 5, 2024

With the current chair of Keidanren (Japan Business Federation) entering his final year in office, the process of choosing a successor will now kick into high gear.

Masakazu Tokura, 73, will end his term as Keidanren chairman next year after serving a total of four years in two consecutive terms.

Tokura has achieved some substantial results, including by leading the way on the largest wage hikes in about 30 years.

His replacement will need the same strong communication skills to achieve a virtuous economic cycle.

Decarbonization, wage hikes

Since taking office in 2021, Tokura has worked to pass a bill to promote a green transition, having proposed that decarbonization and economic growth be pursued together.

To address high prices, he called on companies to increase wages as a social responsibility, which resulted in wage hikes of more than 5%.

“He is a leader who can balance the interests of society as a whole while representing the business community,” said a senior official at a government agency for economic affairs.

The Keidanren chairperson, who is often referred to as the prime minister of the business community, is often chosen from among current vice chairs from manufacturing firms that are not affiliated with former zaibatsu conglomerates.

Nippon Steel Corp. Chairman Eiji Hashimoto, 68, is one person who has been mentioned as a possible candidate. He took a tough stance with large customers such as Toyota Motor Corp. in the name of restoring steel production. And his management skills are highly regarded for his company’s V-shaped recovery to record profits, thanks to his work to pass on raw material costs to customers.

Since Hashimoto’s company is currently trying to acquire United States Steel Corp., a major U.S. steel company, some have expressed concerns that this could affect Hashimoto’s work at Keidanren if he is appointed to the chairman.

However, many believe that the company will be well-prepared to support him for the chairmanship, given that Nippon Steel is a prestigious company that has produced Keidanren leaders in the past.

Nippon Telegraph and Telephone Corp. Chairman Jun Sawada, 68, is also a candidate for the position, as he is expected to focus on the business community after stepping down from his post in June.

Some have said that Sawada is well suited for the position because of his extensive contacts in the business world, both in Japan and abroad, such as through his role as the chairman of the Japan-U.S. Business Council.

However, a business source said that Sawada’s reputation could come down to his stance on the government’s move to revise the NTT Law.

Performance also key

Of the four new Keidanren vice chairs, Sony Group Corp.’s Kenichiro Yoshida, 64, has attracted much attention.

A business source said that late Keidanren Chairman Hiroaki Nakanishi eagerly supported Yoshida’s appointment as vice chair.

As a vice chair for Keidanren, which advocates for a reinvigorated entertainment industry, he is expected to be “a leader of the next generation of growth industries,” said one current vice president.

The performance of the candidates’ companies will also likely be an important factor in selecting the next chair.

Sumitomo Chemical Co., also chaired by Tokura, posted a net loss of \311.8 billion for the fiscal year that ended in March.

“Since his company is in the red, he can’t set a good example,” said one source.

The appointment of Tokura’s successor will be finalized as early as the end of this year.

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