Introducing officer systems in Japanese companies

Notes that after a serious recession which is still haunting Japan, board members of Japanese corporations are being forced to restructure their decision‐making processes. The most popular method is the introduction of an officer system. But it is difficult to make this work without a complete overhaul of the management system, including shareholders’ meetings and the board of directors. Unfortunately, many companies have introduced an officer system in order to reduce the number of board members and avoid the risk of legal action by the shareholders. Their aim is to cut expenditure rather than to improve management. However, there are some companies in Japan which have handled the transition successfully. Argues that what Japanese corporations require now is a new professionalism in management, embracing both officers and directors. Professionalism involves accepting the responsibilities of one’s role and possessing the relevant skills. The short‐term need is to abandon the seniority system and install the right people in the right positions. In the longer term, the solution is to identify young professionals at an early stage and develop their ability to perform as future members of a management team.