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Nippon Keidanren Taps Canon Boss as New Leader

12, 05. 2005

   Fujio Mitarai, president of Canon Inc., is to be elected Chairman of Nippon Keidanren (Japan Business Federation), Japan's leading business organization, at its general assembly scheduled for May 2006. Up to now, Keidanren has usually chosen its leader from major 'broad and deep' basic industries such as steel, power and heavy electrical machinery. But Mitarai comes from an IT-related company that produces digital cameras and other precision equipment, and has also lived in the United States for 23 years. He will be the first ever chairman of Nippon Keidanren from the pro-America camp of Japanese businessmen.

Another Toyota Man Initially the Favorite

Fujio Mitarai, President of Canon, is to be elected Chairman of Nippon Keidanren (Japan Business Federation), Japan's leading business organization.
Fujio Mitarai, President of Canon, is to be elected Chairman of Nippon Keidanren (Japan Business Federation), Japan's leading business organization.

   In addition to Mitarai, current Keidanren Chairman Hiroshi Okuda had eyed Toyota Motor Corp. Vice-Chairman Fujio Cho and Hitachi, Ltd. President Etsuhiko Shoyama as his successor. His favored candidate was Cho. Although both are Toyota men, Cho knows a lot about Keidanren because, as Toyota vice president, he served as No. 2 to fellow Toyota top-ranker Shoichiro Toyoda when he was chairman of Keidanren (currently Toyoda is Keidanren's honorary chairman). Cho has a calm personality and few enemies, characteristics which earned him wide support from all quarters as a possible Keidanren leader. But Toyoda warned Okuda that another Toyota man in the top spot could prompt strong objections from business circles, and urged that somebody else be chosen-as early as possible, as the longer the selection took the harder it would be to find somebody as suitable as Cho.
   Okuda sounded out Shoyama. Hitachi has traditionally furnished Keidanren with vice-chairmen, and the company has a good grasp of Keidanren's role in the business world. Shoyama, however, ruled himself out, because his companys business performance is currently lackluster and he felt the chairmanship would be too heavy a responsibility. That left only Mitarai, Okuda told Toyoda.

Dislike of Political Donations Could be Stumbling Block

   Mitarai would be the first Canon man to lead one of Japan's influential business organizations. Ryuzaburo Kaku, a former Canon president, once served as vice-representative of the Japan Association of Corporate Executives (Keizai Doyukai). He was initially reluctant to take up the Keizai Doyukai post, saying publicly that he disliked the organization's political activities. But then-leader Takashi Ishihara persuaded him to change his mind.
   No sooner had Kaku taken his Keizai Doyukai post, however, than he caused a stir by remarking that 'politicians have neither philosophy nor principles,' when former Prime Minister Yasuhiro Nakasone rejoined the ruling Liberal Democratic Party after his temporary expulsion on suspicion of political corruption. Saying he would make no political donations, Kaku distanced himself from other leading business figures. Mitarai cannot make political donations because more than 50% of Canon shares are held by foreign investors, and this creates legal obstacles. Theoretically, he could channel funds through Canon's subsidiary Canon Sales, Co. Inc., but some leading business figures still say Mitarai would be handicapped by his inability to make political donations freely. Okuda has emphasized the need for political donations by Keidanren, to boost the organization's influence.
   And then there is Mitarai's 23-year stay in the United States, where he built up Canon's sales network. Many observers expect him to improve relations between Keidanren and the United States, but Mitarai is known to have doubts about the American way of business management. He is a strong supporter of Japanese practices such as life-time employment and in-house independent labor unions. Canon does not intend to copy Sony Corp. or ORIX Corp. and work through problem-solving committees after the American pattern. Like Toyota and Nippon Steel Corp., it is likely to stick to Japanese ways. As chairman of Keidanren, observers hope will Mitarai take the best parts of both Japanese and US business practice and create a new management paradigm for Keidanren.

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