My opinion of this week(463):
Corporate restructuring
Japan Airlines Corp. announced Wednesday that JAL President Toshiyuki
Shinmachi will be relieved of his post and be replaced by Director
Haruka Nishimatsu.
It seems that JAL has finally started to begin restructuring their company.
The company has been in a big trouble. About 400 top office employees of the
firm submitted the signature demanding President Shnmachi to step down from
the position. I have seen so many kind of misconducts or scandals in the
past concerning management of private firms, but this is very unusual
situation.
I really don't know much about how President Shinmachi has managed the
firm so far. But he is obviously responsible for many of such dangerous
misconducts concerning safety operation of flight and very bad financial
result in recent years. Under the fact that the consolidated profit of
the current term will record 47 billion yen in red, President Shinmachi
expressed his intention to continue to be President until the financial
year of 2009 without showing much counter measures to improve difficult
situation. It is natural that President Shinmachi has earned a lot of
mistrust from general shareholders of the firm as well as company
employees.
Fortunately at this time, President Shinmachi decided to resign from the
position which seems to be good for restructuring the company.
However, there are some concerns about how the management decide to select
next President. Haruka Nishimatsu, who is a Director of the lowest rank
in the firm has been selected as the next President. The news reported
that this is because Director Nishimatu has taken a neutral position
concerning the signature collection campaign for Shinmachi's resignation.
Because of this fact, the selection of Director Nishimatu is just a
result of the compromise in such confusion according to several news report.
This seems to be a very Japanese way to decide the critical issue. There
are, of course, some other explanations why Director Nishimatsu has
been selected as President. He is now engaged in finance management of
the firm and he knows many influential men of main banks of the firm.
So he is very suitable for the position when the firm is in such a
financial difficulty. The news reports explained that way.
But I personally have a big question about it. The most important thing
which is required for JAL management at the moment is the basic
restructuring of the firm improving sales and profits by recovering
trust for safety operation of the flight. The biggest concern is how
new President can do it after appointment to the position in the general
shareholders meeting in June.
Whenever some conflicts occur in any organization , there usually exist
groups which are for, against and neutral position on the issue. From
my a kind of long personal experience in business, I generally don't
trust person who take neutral position concerning any conflicts. Japanese
tend to take neutral position not because of theory or reason but
because of advantage of not creating any enemies in the conflicts.
The solution is made not by theory or reason but by compromise. This is
Japanese way which I am talking about.
I hope that the selection process of JAL at this time is not just that
process of compromise.
The management issue of JAL is a big national concern, of course. All
people hope the firm will be restructured in good way as soon as possible.
JAL represent a national air line in along with ANA. I look forward to seeing
what will happen at JAL in next few months and the general shareholders
meeting in June.
2006/3/4
Tadashi HAYASE
My opinion of this week(464):
Sudden notice
I have been quite busy with a number of works about a community association
until quite recently. I played an important role as President of the
association. The job is about to end at the end of this month. I thought
most of works had been done.
On March 7th, there was a telephone call from a local post office. A post
office man said he would come to my house to explain how a postal group
insurance system will be handled by from April, new fiscal term. I was
quite surprised to hear his explanation when he visited.
I knew the fact that several hundred of households in our community
association joined the postal group insurance. The office of community
association really don't know exactly the numbers of participants of group
insurance because the system itself has been managed by an affiliated
organization of post office. By participating to such group insurance, both
members of association and the office of association get a certain
advantage. Insurance fee for member households become cheaper. The office
of association get some premium without doing any work about it as a
matter of fact. The premium have been one of a big source of income for
the office of association in the past year.
The office of the association have not touched any works about the
insurance and the member lists have never been noticed to the office
of association for it is a kind of personal information to be kept
confidential for individual participants. That's fine. The office
has had no complains about it.
The explanation made by the post office man was not quite easy to
understand. But his summary is like this. The privatization law of post
offices passed at the diet last fall. In connection with the law, the
management system of group insurance have been changed. All works done
by affiliated organization of post offices are to be handled by the
office of group participants including community association.
The man said he had come here to advice the fact. He continued to say all
individual participants must withdraw from the group insurance if the
office of association cannot handle works to maintain insurance system
including collection of monthly fees and other related office works.
The most astonishing comment he said is that we have to decide whether
or not we continue the group insurance until the end of this March. I
certainly protested to his word very strongly. I said it is not quite
possible to do it under the present situation. How can we do it without
having any lists of participants members and capacity of new office
staffs who will be in charge of the work after April?
Honestly speaking, the management members of the association this year
expected what would happen on the group insurance system in connection
with the privatization of post office. Many of such affiliated
organization which handle several works including group insurance system
will be abolished sooner or later. So the association will lose some
portion of income when it is abolished. We have to do something with it
when that happens. It may happen next year or two years later. We never
expected that happened at this time of the year.
Many of groups are obliged to withdraw from the group insurance system
for a number of management works will be necessary to continue in
the group organization. I thought that that is also true with our
association. So I said to the man that I cannot answer until the end of
this March. How can I do it? The decision must be made by the executive
members of the association after April. What's more, decision must be
made after the executive committee confirm the intention of all
participants of group insurance. How can they do it under limited time
and limited information about member lists? The explanation to the
participants must be done by post office that keep all records about
the participants of insurance.
I protested all those to the visitor from the post office. I further
commented that any laws usually set some time of transfer period to change
from old system to new system. What's about this law ? Are there any of
such transfer period as far as this system is concerned?
There was no conclusion about it. The man left my home without further
messages.
After he left, I checked the agreement about the group insurance which
exchanged between the affiliated organization of post office and our
association. I felt relieved when I found the article.
The article said the agreement is to be extended another one year unless
one of two parties notice to terminate the agreement until the end
of February every years. The date when the man visited me was March 7
although their document they presented was dated February.
2006/3/11
Tadashi HAYASE
My opinion of this week(465):
Graduation
I attended the graduation ceremony of Murayama Daiichi Middle High Scool
held on Friday, March 17. I was invited by the school to attend the
ceremony as a representative of community association. I am now the
president of community association near to school and my duty is about
to end at the end of this month. I will have such oppoutunity any more
in the future. In addition, I had some other interest to know how recent
graduation ceremonies are different from those of our old days.
My connection with this middle high school started last April when I
attended the entrance ceremony of the school. I had a chance to talk with
the principle of the school concerning PC education at school and I was
asked to come to school to help PC teaching classes. I agreed with it and
have helped to teach PC at school untill recently. I accepped the request
from the school to continue it in next year starting in April.
I was glad to hear the word of morning salution from windows of the
school building when I arrived at the school just before the ceremony
started. Those salution were from some students who attended my PC classes
in this year.
The graduation ceremony started 10 o'clock in the morning followed by
national anthem "Kimigayo". Attendants to the ceremony are graduating
students, current students, teachers and school staffs, parents of
graduating students, and guests from citities and from education board
of the city, etc. The attendants are not so different from those in our
days, but there were no attendants from community associations in our
days. Attendants from community association seem to be one good
advantage of today's graduation ceremony as far as I see it.
I thought at first the ceremony last for only an hour and half. But it
took almost two hours and ten minutues. Followed by the national anthem,
the principle started to handle graduation diploma to all graduating
students one by one. That last almost 80 minutes for there were about
190 students.
Graduation diploma were given to one or two representative students all
at once in our day. Althogh it takes such a long time, I think the
current method is much better in many respects compared with the method
in the past.
After the delivering diploma to all students, several speeches were
presented by top leaders of minicipal office, school education board,
president of PTA and so forth. That pattern is not quite different from
that of old days.
Some major difference occured rather at the end of the ceremony. Followed
by a farewell address delivered by a current student, message of thanks
for the ceremony was used to be delivered by a representative student in
old days. That pattern does not seem to exist any more today.
Under some united theme or story, several representative students who
were selected from each classes delivered some farewell messages one by
one. That style seemed to be much better again compared with the old
style of delivering farewell message by one representative because many
more students participated in presenting farewell messages.
The last part of the ceremony was the song sung by all graduating students.
The pattern itself seems to be the same today. But it seems that only little
school use "Aogeba Tootoshi" for the song , that is most popular song sung
in old days.
At the ceremony of this middle high school, they sang two very popular
graduation song sung today at various schools.
It was the first time that I had heard those song. But I liked it very much.
I was deeply moved to see that many girls started to cry while they were
singing the song. I have never expected that happen in today's ceremony.
The ceremony was about to finish after singing those farewell songs. All
graduating student left the gymnasium with the handclap of all other
attendans.
That was such a long ceremony. But I left the school with some good fresh
and plesant feeling.
2006/3/18
Tadashi HAYASE
My opinion of this week(466):
Accounting audit firm for Livedoor
There was the following article in Yomiuri on March 25th relating with
the title topic.
"As to illegal window dressing of Livedoor company, the accounting audit
firm which audited Livedoor is considering to dissolve the firm by
themselves to avoid some criticism from business communities.
There are 12 certified public accountants now in this firm and those
accountants will not lose their qualification even if the firm
itself will be dissolved. " March 25, Yomiuri Newspaper
I was very much interested in the article and agreed the first part
of the paper concerning their dissolution. Yes, that's right. Such
accounting firm should not exist any more. The firm is to be dissolved
as soon as possible.
But I wonder if that is all what government authorities should lead to
do.They are asked to take some stronger and more definite actions to
avoid same kind of mistakes in the future. It is requested to punish
those certified public accountants in one way or the other although
the level of punishment may differ from case to case.
Accounting audit is one of the very important process to keep safety
and reliability of the corporation in the current corporate governance
system.
Needless to say, CPA (Certified Public Accountant) plays very important
role to keep the system work. There were so many scandals due to luck of
proper auditing. That is against commercial code and ethics.
Those accountants who were engaged in auditing of Livedoor are
definitely to be punished in one way or the other including
disqualification of CPA as far as I see the whole process of Livedoor
case.
2006/3/26
Tadashi HAYASE
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