Press Conference by Taro Aso, Deputy Prime Minister, Minister of Finance, and Minister of State for Financial Services

(Excerpt)

(Friday, September 25, 2015, 10:16 am to 10:44 am)

[Questions and answers:]

Q.

Yesterday, a follow-up council was held at the Financial Services Agency concerning the Corporate Governance Code and the Stewardship Code. Many participants of the council have said that the process of selecting corporate leaders is extremely important, but Minister, how do you think the CEOs of listed companies should be selected in the context of Japan’s growth strategy? Please also tell me what role you think independent directors should play in CEO selection.

A.

I don’t think companies that have dropped to the level of having to be told these things by outsiders are great. It’s normal for board of directors, when appointing CEOs, to consider their track records and to think about various things. For example, directors might see that the previous CEO was from the sales section, and then think that they should choose someone from the administration section. They think about balance, and choose someone that matches the times and the situation the company is in. To be honest, I think it’s a bit odd that appointments have to have opinions of independent directors. Whichever the case, I think that companies have to think about things like transparency and that sense of balance. The case of Toshiba comes up a lot, and the media reported that the CEO ordered profits to be improved by 12 billion yen in three days. But there is something wrong with a board of directors that chooses a CEO that says things like that. If that’s all I’d heard, that’s what I would think. But is that really true? People sometimes think that something can be a lie if it was in the newspaper. But did anyone ask the person of the company directly? Well, did they?

Q.

It was written in the third-party committee’s report.

A.

I’m not talking about that. How about asking Toshiba’s stakeholders directly? Apparently, no journalists who cover the Ministry of Economy, Trade and Industry asked whether that conversation took place. How can you know if you don’t ask the person directly. Shouldn’t you ask directly? You can look at their face and more or less know how they’re going to react. At the very least, not asking directly like that is odd. It seems that matters like this are being discussed more, at follow-up councils and the like. If they weren’t discussed previously, I think that discussion is important. But I think all normal companies are taking proper action.