- YOMIURI EDITORIAL
Mizuho’s new leadership faces huge task to prevent further system glitches
12:51 JST, January 21, 2022
The new management must be prepared to take a fresh look at everything in order to revamp a corporate culture that is lacking in openness and prevent recurrences of system failures.
Mizuho Financial Group Inc. has announced a new management team after a series of system problems.
On Feb. 1, Masahiro Kihara, senior executive officer of Mizuho Financial Group, will succeed President Tatsufumi Sakai, who will resign from his post to take responsibility for the glitches. Deputy President Seiji Imai will become chairman of the group in April. At Mizuho Bank, Deputy President Masahiko Kato will become the president in April.
The group has also decided to invite a former vice chairman of IBM Japan Ltd. to serve as an executive officer, after it was pointed out that there was a lack of personnel in the group with expertise in computer systems.
Mizuho Bank had as many as eight incidences of system glitches between February and September 2021. In November last year, the Financial Services Agency issued a business improvement order to the bank for the second time over the series of glitches. Restoring customer trust is an urgent task. The new management takes on a heavy responsibility.
Problems also occurred twice during the year-end and New Year period, even as efforts were being made to prevent such recurrences. One failure at the end of last year, which prevented customers from transferring money to some other banks, was said to have been caused by a setup error made by staff.
The system failures appear to symbolize the difficulties that lie ahead for the new leadership. First and foremost, Kihara should make every possible effort to prevent further troubles.
At the same time as the announcement of the new management team, Mizuho Financial Group and Mizuho Bank submitted to the FSA plans to improve their operations for the purpose of preventing a recurrence of the system failures.
The companies said that as too many system-related personnel had been cut to reduce related costs, they will increase the number of such staff. They also plan to review maintenance and inspection procedures so that they can detect signs of equipment malfunction. It is necessary to ensure that these improvement steps lead to stabilization of the entire system.
In addition, it is essential to fundamentally change the corporate culture that is believed to be at the root of the successive system failures.
Mizuho Bank was launched in 2000 through the reorganization of three banks — the Industrial Bank of Japan, Dai-Ichi Kangyo Bank and Fuji Bank. As there remains a deep-rooted sense of sectionalism in Mizuho Bank from the three predecessors, the FSA, in issuing the business improvement order, severely criticized the corporate culture at the bank as one in which personnel “don’t say what they need to say, and only do what they’re told to do.”
Under the new leadership, Kihara, Imai and Kato are from the Industrial Bank of Japan, Dai-Ichi Kangyo Bank and Fuji Bank, respectively. The chairman of the nomination committee in charge of the selection of the new management lineup strongly denied that the appointments were made with balance in mind, but it appears from the outside that the posts have been shared among officials from the bank’s three predecessors.
It is important to carry out reforms to eradicate the sense of belonging to the three former banks among staff. Among top officials of the nation’s three megabanks, Kihara will be the first who started his career in the Heisei era (1989-2019). It is hoped that he will break the custom of top-down decision-making without being bound by precedents.
In order to achieve this, it might also be necessary to consider appointing more people from outside the company to senior management positions.
— The original Japanese article appeared in The Yomiuri Shimbun on Jan. 21, 2022.
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