The board dismisses its own chairman (2010)

Institutional governance, and the shadow the family still casts

At the core of this decision is that a distortion of governance — rule from behind the curtain by the founding family as major shareholder — was corrected from the inside by the board itself. There are few examples of internal directors, rather than an acquirer or outside shareholders, moving to dismiss a sitting chairman and president. Choosing the order of rebuilding governance and culture first, rather than results first, can be seen as an attempt to re-ask whom a company moves for, in a management world usually driven by immediate numbers. The question of how a family firm confronts the impasse of hereditary succession — one that still resonates today — was present in it.

The family’s shadow did not disappear with it. The dismissed honorary chairman kept that title for a time, and the deposed eldest son remained a subject of reporting about the family for years after selling his shares and severing his ties with the group. With the attempt to return governance to the institutions and the continuing presence of the founding family pushing against each other, Seiko Group has made repeated fresh starts as a group centred on watches. How far governance as a system can replace the centripetal force of a founding family remains an unresolved problem this company has carried for a long time.