U.S.-Japan Business Leaders Tackle Tough Questions

Daniel P. Dolan (Director, Global Communication Strategy, Weber Shandwick, Japan)

Following the brief speech by Japanese Prime Minister Koizumi at the 39th Annual U.S.–Japan Business Conference in Tokyo, the buzz among attendees at the Imperial Hotel concerned what exactly was in the briefcase held by one of two bodyguards posted in front of Koizumi. This petty diversion was welcome during three days of frequently contentious debate between business leaders from Japan and the United States. The conference, organized every year by the U.S.–Japan Business Council, was chaired on the U.S. side by Michael Armstrong, Chairman and CEO of AT&T, while Toshiba Chairman Taizo Nishimuro led the way for Japan.

The October 20-22 conference concluded with a joint statement on 13 issues of mutual interest. As expected, some points were drafted with little difficulty, while others required some haggling over wording. Topics included in the statement include the U.S. economy, the Japanese economy, formation of a U.S.–Japan Private Sector/Government Commission, corporate governance, foreign direct investment, revision of the U.S.-Japan tax treaty, pension reform, public financial institution reform, biotech/food safety, the WTO, climate change, information and communication technology, and business aviation.

The conference provided opportunity for participants to choose among three groups for roundtable discussions: IT, Manufacturing, and Services. I attended Manufacturing sessions, and I was particularly impressed by the commitment of both sides to their different views regarding effective corporate governance practices. The most obvious sticking point here was the focus in the U.S. on shareholder value and the related perception that outside board directors can best provide necessary oversight functions, while in Japan there is a broader conception of "stakeholders" that includes employees, customers and society as a whole. The Japanese side argued strongly that the interests of such stakeholders can best be served in Japan by appointing as board directors individuals with keen knowledge of a given company's business activities. This belief accounts for the common practice in Japan of appointing most or all board directors of a company from the ranks of employees of that company. Another interesting statistic revealed at the conference was that there are approximately 13,000 certified accountants in Japan, compared with 330,000 in the United States.

The entire text of the joint statement is available at
http://www.usjbc.org

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