The Japan Post Insurance mis-selling scandal and the rebuilding of group governance (2019)

A field gone rogue, or the consequence of a structure

It is possible to file this away as the deviation of a handful of high-performing salespeople dazzled by commissions. But to see it that way is to miss most of it. A system in which routing a switch around the rules doubled the commission; supervisors who went easy on top performers because their numbers affected their own promotion; and the dynamics of a listed parent and listed subsidiaries in which selling was pushed onto the two financial companies so that the mail business could be sustained — improper solicitation appeared at the end of all of this, and the phenomenon was far too broad to close off as a problem of the sales floor alone. The resignation of the three presidents was a settlement that admitted that breadth all the way to the top of the holding company.

When President Masuda spoke of a middle layer that buries bad news, what was in question was less the individual misconduct than an organization in which bad information does not travel upward. Even so, replacing the executives, imposing penalties and announcing preventive measures leaves a separate question: how far excessive targets and a sales model dependent on the branch network can actually be remade. Within the double bind of pressing ahead with privatization while maintaining a nationwide counter network, the structure that funnels earnings pressure back to the front line has not entirely disappeared. How deep the governance rebuild reached will show up in how the group sells from here.