PREFACE

I titled this book "The Only Way to Survive for Japan" ("日本の生き残る道") and the subtitle reads "Corporate governance is sure to save our country" ("企業統治が我が国を救う").

Although this book mainly focuses on corporate governance, it broadly covers governance as a whole. I think that corporate governance is an indispensable collar of the governance of a nation.

My current concern lies in how to resuscitate Japan, which has wasted the past thirty years. I believe that only corporate governance is expected to work as a decisive factor in reviving Japan. Also, I am of the view that only corporations and companies can create value in society. And the fate of a company largely rests with its leader, that is, the company's president. It follows that the selection of the president should be done under properly functioning corporate governance.

Read other chapters in 'The Only Way to Survive for Japan'

*Shareholders line up to enter the venue for the 2025 Fuji Media Holdings shareholders' meeting on June 25. (©Sankei by Masahiro Sakai)*

A Careful Selection

I consume my life focusing on corporate governance. First, I devote myself to day-to-day legal practice. Just like a single soldier on the battlefield, I daily wrestle with lawsuits filed by companies arguing over what the definition of shareholders means to them.

Second, I positively respond to the requirements of media interviews. I think that the people in the media are my fellows. When I talk with them, I am always braced for it and react to them in a serious manner. I try my best to get my message across to them. As a preamble, I always say to them that corporate governance hinges on independent outside directors, but all too often, the discipline of independent outside directors rests on the theory of the goodness of human nature.

Japan's courts still leave a lot to be desired, so I would have to say that only the media can practically discipline independent outside directors. Therefore, the media can play a greater role than they presume they can. Concretely speaking, it is a chronicle about the closely-intertwined particulars of postwar Japan's company system, described in a continuous way from the cross-shareholding of listed companies triggered by the dissolution of the zaibatsu (financial clique), the United States bashing of Japan, and the bubble collapse, to the recent introduction of corporate governance.

Third, I currently serve as the second President of the Japan Corporate Governance Network, which is an organization to mainly facilitate and increase the employment of independent outside directors. The organization boasts of brilliant directors and members.

What Happened to Japan?

Whatever I see, hear, and read in my daily life, I always associate it with corporate governance, strongly hoping that it will help reinvigorate Japan.

This is the reason I subtitled this book "Corporate governance is sure to save our country."

In the 1980s, Japan had been trumpeted as "Japan, No 1." Sadly, nobody refers to Japan that way now. What has happened to Japan?

If Japan remains as she is now, what inconveniences will unfold?

Governance reform has been recommended and is still in the process of improvement. Where will it eventually lead us?

The Last Generation Before the War

Mr Sukehiro Hirakawa, my former teacher, says in his latest book "Shōwa no Taisen to ano Tokyo Saiban (昭和の大戦とあの東京裁判: literally, Great War in Shōwa and that Tokyo Trial, Kawade Shobō Shinsha, Ltd, 2011):

In my boyhood, we Japanese stood tall without having any inferiority complex. When I went to a summer resort on the Bōsō Peninsula every summer, I saw a number of battleships of the Imperial Japanese Navy offshore. Japan was among the three biggest naval countries in those days. I was brought up as a boy of great pride, and I cannot make myself disbelieve that this largely shaped who I am. (p 143)

Mr Shintarō Ishihara was born in 1932, a year after the birth of Mr Hirakawa.

In "Japan In-depth" dated April 2022, I mentioned Mr Ishihara at the age of 13, saying, "At such an early age, Mr Ishihara already recognized Japan as a proud homeland, which existed in him as a part of his identity."

They were both from the last generation brought up before the war in Japan. There is only a gap of three years in age that separates Mr Ishihara from Messrs Kenzaburō Ōe and Shūji Terayama, but there is a decisive difference that lies between their traits:

It is the pride in their homeland, Japan.

When I saw Mr Hirakawa's book, I was first amazed by the title per se, which gives away his intelligence. His fountaining feelings have matured and evolved into a kind of contained intelligence. It is a light yet sharp mockery for those who intentionally use an evasive expression, "that war," for the war that Japan had fought in China, Southeast Asia, and the Pacific. Instead, he calls the Tokyo Trial "that Tokyo Trial" to intentionally satirize it. This proves that he is a person of immeasurable intelligence.

Growing Up After the Great War in Showa

I have always attached my mind to Japan, which had greatly prospered after the war, and strongly aspired for her recovery. That may be because of the year of birth, 1949, stamped on my back. I am seventy-two years old now and was born in the last year of the three-year-baby-boom generation. There were 2.68 million people born in 1947 and 1948, respectively, and 2.7 million in 1949. The total number of people born during the three years was 8.06 million.

There were eight classes in my elementary school and sixty-four students in each class.

It was only the positive aspects of the so-called Yoshida Doctrine (minimum defense forces and economic growth) that I knew; I was not aware of the negative aspects. I had never doubted that tomorrow would definitely become better than today. Actually, Japan had achieved impressive growth ー I had seen Japan steadily rising until I reached middle age.

I am not a witness to prewar Japan. In that sense, I am different from Hirakawa-sensei and Mr Ishihara. Rather, I am closer to Kenzaburō Ōe and Shūji Terayama. But I will not become more sentimental or naïve than necessary because I am engaged in legal practice, which is a most profane profession.

'Mongrelized Culture' After the War

Shūichi Katō, who was born in 1919, wrote about mongrelized culture after the war. He says:

The culture of modern Japan is a mixture of Japanese ancient warm and beautiful mores and Western kinds of knowledge and art…Let's settle for mongrelized culture and live with it spiritedly; such attitude and spirit were at least new to me. (Pp 395 – 396 of "Kato Shuichi Chosakushu 14. (1979, 加藤周一著作集１４: literally, The Writings of Shūichi Katō No 14, by Heibonsha Limited, Publishers.)

I can hardly relate to his statement because I sense an unnecessary inferiority complex wafting in postwar Japan. Especially, since I was given to understand by reading "12 Seiki Renaissance by Shūntarō Itō. (１２世紀ルネサンス: literally, Renaissance in the 12th Century, published by Kodansha, Ltd in 2006) that Western culture is also mongrelized culture. And that possibly any and all cultures in this world are more or less mongrelized. Since then, I have come to understand that any thought in any era is nothing short of one thread of the complicated entanglement of history.

Therefore, I have never had a feeling of inferiority, even though Japan is lagging behind in terms of the prevalence of corporate governance. But I understand that the times require present-day Japan to learn from American-style or British-style corporate governance. It can be said to be the momentum of the times.

Changing Education

I learned a lot about prewar Japan from my parents. My father had worked for one of Japan's leading companies, and my mother was a homemaker. Along with my father's relocation, we moved to Kobayashi city in Miyazaki Prefecture, Wakamatsu-ku in Kitakyūshū and Toshima-ku, Tokyo, and finally to Hiroshima. I transferred to Noboricho Elementary School in Hiroshima when I was a fifth grader.

Thanks to the guidance of a dedicated female teacher, who was in charge of my class, as well as to a cram school run by an individual who was full of enthusiasm, I was able to enter the junior high school affiliated with Hiroshima University, Faculty of Education. Of course, it was the fruit that the efforts of my parents bore in helping me pass the entrance examination of the junior high school.

When I was in early elementary school years, Japan had gone toe-to-toe with the world only in the industrial production of textiles, ships, and ammonium sulfate. Cement may also have been included. I was ignorant of ammonium sulfate; I remember checking it in the dictionary. Made-in-Japan electrical appliances and automobiles were paid no attention to by the world. Such was Japan in those days.

But Japan had grown so rapidly that it finally became the world's second-largest economy in terms of GDP in 1968. That year, I graduated from high school. I flunked the entrance examination of my first-choice university, so I had to prepare myself for my second try. But Tokyo University suspended the entrance examination the following year.

That was because the movement by extremist students had developed. It was a world trend at that time.

Enter the Bubble Economy

Japan, which had become the world's second-largest economy, had occupied the position for the 42 years that followed. However, since the collapse of the bubble economy, especially since 1997, when the financial meltdown occurred, Japan's economy had not been as strong as before, although she was still seated at the position of the world's second-largest economy.

Just as a side note, the year 1997 was when I published the novel called "The Shareholders Meeting."

When Tokyo University restarted entrance examinations, I passed it and finally entered my first-choice university. I passed the bar exam and became a prosecutor. Having worked as a prosecutor in the Public Prosecutors' Offices in Tokyo and Hiroshima for two years, I started working as a lawyer for an international law firm in Tokyo, and after six years, I became independent. It was in 1985.

The year 1985 was exactly when the bubble started.

Since setting up my firm in Aoyama Twin, located at the crossroads of Aoyama 1-chome, I had dealt with reams of work related to real estate in the United States. It was the current of the times. In Japan, I had also been involved in cases of corporate takeovers, which were intended to get land at ever-soaring prices. It even made the headlines of a leading newspaper, "boiling money archipelago." I made the best use of my knowledge of the Companies Act to resolve the incidents. A huge amount of money would pass through the palm of my hand without landing. It was the way things were at that time.

The Lost Decades

In 1991, the bubble popped.

But for the first few years after the bubble collapse, everybody had hardly taken it seriously. The word minibubble was often heard in society, and people were deluded into believing that they would be brought back to the way they had been, again, soon.

During the bubble years and after the bubble collapse, I had been run off my feet as a lawyer. The bubble collapse gave way to a welcome tailwind for lawyers. In fact, in mathematical terms, those days saw monotone increasing.

But now the bubble days are only familiar to people in their mid-50s or over.

It follows that my thought of "lost three decades" would be shared only by half of the Japanese people. But when it comes to the recovery of Japan, I believe that many Japanese, even in their mid-50s and under, have a strong desire for Japan to emerge again.

My Anonymous Column

The essays that occupy a majority of this book were carried once a month in the column called "Keizai kishōdai" (経済気象台, literally, The economic meteorological observatory) in the morning edition of the Asahi Shimbun. That column continued for 90 installments over seven and a half years from 2014. Each time, I picked up a high-profile event of the time. But having read them through, I found that each essay illustrated the tendencies and characteristics of the times.

"Mr Ghosn appears four times, doesn't he?" said Mr Hironori Katō, a reporter, who offered me this opportunity to write essays for the newspaper.

The Asahi Shimbun suggested that I write the column "anonymously." I said, "So much the better."

Though not a public figure myself, I was afraid that disclosing my real name might cause some inconveniences to some people. Being anonymous makes it possible for me to say whatever I want without any restraint or mincing words.

I really appreciated their suggestion. Actually, I was able to state my opinions honestly, even about sensitive and contentious topics. There were several occasions when I felt reassured by writing under an alias. When I vacillated about how to write, I encouraged myself to write as honest an opinion as possible because I remained anonymous.

Origin of This Book

Near the final installment, Mr Hironori Katō told me that he would like to carry an article based on my interview in the newspaper. He suggested that I uncover my anonymous columns and go with my real name.

On his suggestion, I reread all the columns that I had written and decided to accept his suggestion because I was convinced that what I had written did make sense. I had jumped on the opportunity to speak my mind with a sense of ease because I was able to write anonymously. But it turned out to be all for the best, for I found that my statements were honest and to the point.

Mr Hironori Katō had my interview article with a photo of me carried in the morning edition of the Asahi Shimbun dated March 20, 2022.

The essays, other than those contained in "Keizai kishōdai," had been contributed to a website called "Japan In-depth," which Mr Hiroyuki Abe, a friend of mine, heads up. I still continue to write for this site. This book also contains some essays that I wrote for the Japan Corporate Governance Network, of which I am President.

The above is the history of my essays included in this book.

How We Lost 30 Years

What has caused Japan to lose the past thirty years? I tried to work vigorously on finding the answer to the question during my work using limited time. And I have come to the tentative conclusion that I am none the wiser.

But I have continued to be on a fishing expedition. As a special project of the Japan Corporate Governance Network, since July of 2021, I have undertaken a serial talk show under the name of "The lost three decades; what must Japan do?"

The guest of the first session was Mr Sōichirō Tahara, and Mr Jitsurō Terashima was invited to the second session. Thanks to the participation and cooperation of such prominent figures, this project has become momentous and noteworthy. We rented a small studio and continued a talk show for one and a half hours there, and the number of remote viewers ran up to as many as 5,000 people. The accumulated total counts well over 30,000 people. The number was way more than we had expected.

Furthermore, we solicited opinions from the viewers under the title "The lost three decades; what must Japan do?" Much to our great surprise, there were as many as 106 submissions. We could not be happier with this phenomenon.

We have managed to find ourselves where we are now.

Moreover, we are going to keep proceeding further and further.

BS TV Tokyo allocated a slot to us for our new program, and we had a talk with Prime Minister Kishida as the first guest of our once-a-month talk show.

I wish to pass a revived Japan to the next generation of our baby boomers and further to the subsequent generations. We would like the people in our subsequent generations to have pride in their homeland.

A Young Sailor on the 'Yamato'

This is the reason why I quoted a twenty-one-year-old young man on board the Yamato, the Japanese battleship, in the Preface of my book, Is My Homeland Worth Sacrificing My Life For?.

Japan "is sure to wake up when defeated. In what other way would Japan be resuscitated? ...We are resolved to help make that happen." Convincing themselves of that, they voluntarily threw their lives away; "We are willing to sacrifice our lives, hoping that newborn Japan appears afterward; that's the only thing we wish.'"

(Senkan Yamato no Saigo "戦艦大和ノ最期," literally, The Fate of the Yamato, by Mitsuru Yoshida. Published by Kodansha, Ltd, in 1994.)

In Is My Homeland Worth Sacrificing My Life for? I also mentioned Mr Hidehiro Inagaki's book, Ikimono no Shinizama Hakanai Inochi no Monogatari, "生き物の死にざまはかない命の物語" or literally, Ways of Dying of Living Creatures; Stories of Fleeting Lives. Published by Soshisha Publishing Co, Ltd in 2020.

How could Japanese honeybees defend their hive, family, and offspring when attacked by a giant hornet, which is five times as large as a Japanese honeybee?

A honeybee sting won't work on the giant hornet, which is strong enough to kill honeybees one after another. Even so, the small honeybees dauntlessly attack the hornet again and yet again. Although some honeybees are killed in the middle of the battle, they will never stop attacking the intruder.

Forming a cluster together with a few hundred fellows, honeybees pile on the intruding hornet.

But "of course, the hornet, the strongest of the insects, should not be killed only by that."

The Way of Sacrifice

The subsequent operation of the small honeybees is a hot defensive bee ball. Small honeybees "vibrate their flight muscles, move their wings faster, produce heat and overheat the hornet inside the ball."

The hornet perishes at a temperature of 45° C. Meanwhile, the small honeybees can withstand temperatures up to 49°C. The temperature of the bee ball can reach 46°C. There are some honeybees that die around the marginal level of the temperature. It is definitely a battle demanding the cost of their lives.

The author fondly says:

The Japanese honeybees, even if they end up dead in the battle, are willing to sacrifice their lives to save the other honeybees. And their babies will be protected in the hive.

When "Japan," where the Japanese honeybees live, was war-torn, there were a number of young people who had sacrificed their lives for the sake of their homeland. No, they did not mean to sacrifice their lives for their country; they were fathers of some people, lovers and husbands of some people and sons of some people.

There were lives thrown away for the sake of some other people. [And] There were lives protected by the deaths of some other people.

I am not talking about the world of honeybees.

And Mr Inagaki adds, "If we feel that we are fed up with our calm yet uninspiring lives, we have to think seriously again who had sacrificed their lives for us now to enjoy such lives."

The Great War in Showa

The Great War in the Shōwa era claimed the lives of more than 3 million Japanese people. Of course, the number of other Asian victims differs by an order of magnitude. Many American people were killed, too.

Four years after the end of "the Great War in the Shōwa era," I was born as a Japanese. I had grown up with the soaring economic growth that had lasted for 40 years and lived for the subsequent 30 years with an ever-deteriorating economy.

Having gone through many hardships and experiences, I am now living a life involved in legal affairs of corporations as a lawyer. At the mercy of the moment and times, I had been fluctuating unintentionally like particles in Brownian motion, but I have stuck it out and have found myself here.

Being Japanese, I am always thinking of how I can work in order to leave a better Japan to our succeeding generations. I have figured out that I can play to my strengths only in the world of corporate governance.

This book can be just a little monumental stone; the story must go on further into the future.

Follow the book as it's published.