New Keidanren head will be tested on ability to deal with global issues

The Yomiuri Shimbun

12:06 JST, May 13, 2021

It has been decided that Hiroaki Nakanishi, chairman of the Japan Business Federation (Keidanren) and a former chairman of Hitachi Ltd., will resign from his Keidanren post due to illness before his term of office expires. Sumitomo Chemical Co. Chairman Masakazu Tokura will replace Nakanishi.

This is an unusual urgent appointment to the top post of the business lobby, but hopefully Tokura will carry on Nakanishi’s reform efforts and tackle the mountain of challenges that exist.

Nakanishi became Keidanren chairman in 2018 on the strength of his achievements in bringing about a rapid recovery in Hitachi’s business performance after the company fell into heavy debt. Since then, he has presented various policies in his “outspoken” style of disseminating information.

Nakanishi has emphasized reviewing Japan’s conventional style of employment, through such measures as overriding some parties’ objections and scrapping Keidanren’s recruitment rules, which had become standard practice in job-hunting activities. He also called for the restart of nuclear power plants.

Nakanishi has also attached importance to the diversity of member companies and human resources, through such measures as encouraging start-ups to join Keidanren by easing the membership requirements and unofficially appointing Tomoko Namba, chairwoman of major information technology firm DeNA Co., as the first female vice chair of Keidanren. Keidanren should accelerate this direction of reform.

At a press conference, Tokura said that he will “steadily follow [in Nakanishi’s footsteps].” Tokura does not have strong name recognition, but he has been active internationally, engaging in negotiations with many foreign companies while at Sumitomo Chemical. He is said to be well-versed in climate change and digital issues.

Tokura should make the most of this knowledge to resolve Keidanren’s issues.

There is still no sign of the novel coronavirus pandemic being brought under control. Keidanren must play a more active role mainly in expanding telecommuting and implementing thorough measures to prevent infections among companies.

For decarbonization, the government has set a target of reducing greenhouse gas emissions by 46% from fiscal 2013 levels by fiscal 2030, but voices persist within the organization that the proposal is too rushed. The chemical industry, including Sumitomo Chemical, emits a large amount of carbon dioxide.

Therefore, Tokura’s ability to coordinate will be tested over strengthening cooperation and consolidating opinions in the industrial circles as a whole.

Amid mounting U.S.-China conflict, economic security is an important issue. Keidanren needs to take the lead in cooperation among companies through such measures as establishing supply chains that do not rely on China.

In 2019, a group of U.S. business leaders declared that they should abandon the “shareholder-first policy” that places top priority on distribution to shareholders, and should shift to management that pursues the interests of society, including employees and local communities.

Keidanren also needs to speed up its response to issues of global concern, such as rectifying disparities, appointing women in high-ranking positions and giving consideration to human rights issues.

Some say that Keidanren, many of whose members are in the manufacturing industry, is losing its influence. The business lobby should put all its energy into making policy proposals that focus more on the public than on corporate circumstances.

— The original Japanese article appeared in The Yomiuri Shimbun on May 13, 2021.