EDITORIAL: Japan Post group must first restore governance as it seeks fresh start

The presidents of three Japan Post Group companies, including Masatsugu Nagato, head of Japan Post Holdings Co., have announced their intention to step down.

Their decisions were rightly made in light of the shady practices of the group companies, which preyed on the trust of elderly citizens in post offices, and also in light of the group’s malfunctioning state of governance.

The Financial Services Agency on Dec. 27 ordered Japan Post Insurance Co. and Japan Post Co. to suspend part of their business operations in connection with their questionable sales of insurance policies. The agency also issued a business improvement order to Japan Post Holdings, their parent company.

The total picture of the scandal has yet to emerge. A special investigation committee of outside lawyers has also stopped short of elucidating the responsibility of management.

The resigned presidents should continue to cooperate in probes into the matter, not the least to draw lessons from the development.

It has also been decided that Yasuo Suzuki, senior executive vice president with Japan Post Holdings, will resign his post. Suzuki, an influential figure in the holdings company, previously served as administrative vice minister of internal affairs and communications.

It is believed Suzuki was the recipient of tip-offs that one of his successors as administrative vice communications minister leaked, while in office, to Japan Post Holdings about the punishments being considered.

Nagato, the Japan Post Holdings president, said the matter will not be investigated any longer because Suzuki has chosen to step down, although the option of a probe by outside lawyers had once been on the table.

Suzuki was quoted as saying, during an in-house interview, that he did not believe he had done “anything so outrageous.” Nagato also emphasized he has never had the impression that Suzuki had access to any “big secrets.”

That is at odds with the accounts given by communication ministry officials, who said the company was informed of the fine details about the discussions within the ministry.

The cozy relationship between the public and private sectors would remain unclarified if the resignations of the vice minister and the vice president were to be the end of the story. Officials should closely investigate the case and provide explanations.

Suzuki led the protest that the Japan Post Group filed with Japan Broadcasting Corp. (NHK) after the public broadcaster aired a story on Japan Post Insurance’s shady sales practices. He also criticized NHK’s news gathering methods in October by comparing them to approaches taken by “organized crime groups.”

Nagato told the Diet earlier that there was “total agreement of views” between himself and Suzuki. When questioned repeatedly during the news conference where he announced his resignation, Nagato said, only too late, that he perceived Suzuki’s reference to crime syndicates as “inappropriate.”

That is another proof of the group’s failing governance.

The Japan Post Group, which was incorporated in 2007, is still in the process of privatization. In exchange for government backing, it is subject to restrictions in its business operations, and it has a behemoth body that is ever so difficult to steer.

The group’s privatization policy has faced twists and turns, partly under the influence of government changes, and the appointment of its top executives has also been at the mercy of political situations.

Hiroya Masuda, who will take over as new president of Japan Post Holdings in January, will be the company’s sixth president in less than 13 years. Former bureaucrats, who once worked for the now-defunct Ministry of Posts and Telecommunications, will be promoted internally to serve as presidents of Japan Post Insurance and Japan Post.

The group should not spare any effort in introducing viewpoints of the private sector, not the least to shed its bureaucratic mold and to keep the influence of political circles at bay.

It is never easy to restore confidence that was hurt. The first thing for the Japan Post Group to do is to recover its corporate governance and to be reborn into a more open organization that abides by laws and social codes and places priority on its clients.

That is also the initial step to be taken in heading for the goal of privatization.

--The Asahi Shimbun, Dec. 29