Japanese CEO resigned after an employee’s ‘death by overwork.’
Published 1:30 am Friday, December 30, 2016
By Jena McGregor
The Washington Post
On Wednesday, a Japanese chief executive made a laudable move that would be stunning to many American employees if their CEO did the same. Tadashi Ishii, the chief executive of Dentsu, Japan’s largest advertising agency, said he would resign in January to take responsibility for alleged violations of Japanese labor law following the suicide by a young employee late last year. The suicide was ruled by officials as “karoshi,” a Japanese term for death from overwork.
Ishii’s resignation fits with the remarkably common pattern of Japanese CEOs stepping down after a shameful or scandalous incident at the firms they lead. Earlier this year, 7-11 mogul Toshifumi Suzuki, 83, resigned after losing a boardroom fight with activist investor Dan Loeb, saying at a news conference that “I am unbearably ashamed.”
Last year, Toshiba CEO Hisao Tanaka resigned after an investigation said he and other executives were responsible for a $1.2 billion accounting scandal. “I deeply apologize to all stakeholders for causing these problems,” he said at a news conference, noting “this has resulted in the largest damage ever to our corporate image.” The list of resigning Japanese CEOs taking the fall for their corporations goes on, from Olympus to Tepco.
Certainly it’s a commendable sign of personal responsibility that’s lacking in many of their Western counterparts. Such actions should deter other leaders from letting bad behavior fester, lest they face the same fate in a culture like Japan’s that abhors shame.
But the problem of overwork in Japan is not going to be solved by one leader’s resignation, however admirable it may be. Extreme work hours are so common in Japan that 22 percent of employees work more than 50 hours a week, longer than any other country in the Organization for Economic Cooperation and Development except Turkey, Mexico and Korea. (In the United States, 11 percent of employees work that much, according to the OECD’s data.) A recent government report in Japan found that nearly 23 percent of companies said their workers booked more than 80 hours of overtime each month — that’s overtime, not total hours — and among those, 12 percent put the extra time at more than 100 hours.
In other words, this is an issue that obviously goes well beyond one company and one leader. Writing about the string of accounting scandals in Japan, Bloomberg View columnist Noah Smith said earlier this year that in Japan, there was “an overemphasis on punishment instead of prevention, and on individuals instead of organizations” and that individual resignations aren’t “an effective substitute for efforts to prevent these problems in the first place.”
The same goes for shifting the culture of extreme hours in Japan. It will take not only government and organizational policy changes, but cultural efforts backed up leaders’ actions. Some of this appears to be beginning. In 2014, for instance, the government passed its first legislation to try and prevent karoshi, though it’s not clear how effective it will be. Japan made November “the awareness month for prevention of karoshi” and there is discussion under Prime Minister Shinzo Abe of putting a legal cap on overtime hours.
Reforms will have to take place at the corporate level, too. Dentsu seems to be trying to address this: Last week, the Wall Street Journal reported the advertising firm has said it was switching off all office lights between 10 p.m. and 5 a.m., requiring employees to take at least five days off every half year, and lowering maximum overtime hours. It also said it would remove a long-standing list of principles encouraging hard work and never giving up that were promoted in company materials. “Don’t let go, even if you are killed,” one of the principles said, according to the Journal report.
Obviously, removing such language seems like a good first step. As does putting parameters on vacation and the workday, even if a 10 p.m. lights-off policy still seems severe to workers in much of the world.
But changes to rules and policies do little to enforce corporate culture if they’re not reinforced by leaders themselves. Yes, business leaders need to be the ones who not resign when things go wrong, or who change regulations to prevent overwork. They also need to model the behavior they want to see by not working such extreme hours themselves.
Change in corporate cultures – particularly when they’re as embedded as the work ethic is in Japan – is most effective when the people at the top set the right example, and not just new rules.
