Replacing the leadership and rebuilding governance after the BigMotor claims fraud (2024)

The shadow of promoting from the inner circle

What this decision reflects is the gap between form and substance: an institutional design advanced all the way to a nominating-committee board, while in practice concentration in a single leader and the cutting-off of information from the front line were allowed to persist. That the Financial Services Agency insisted on seeing Sakurada out was presumably because it judged the root to lie not in the negligence of any individual but in the machinery and the culture of management that produced such judgements. In remaking, under the pressure of crisis, the governance the group had carried since its founding, one can sense a tension quite unlike that of reform in calm weather.

Even so, the substance of the renewal was in question from the start. Both the new president of Sompo Japan and Okumura, who succeeded to the role of group CEO, had worked long and closely with Sakurada, and whether they could shake off the view that this was a puppet regime became an issue early on. Changing the structure of governance and changing the content of decisions are not the same thing. Having made management responsibility visible through sanctions and personnel moves, how far the culture of sales-first and the bias toward the status quo can be cut off — that answer still appears to be left to the accumulated practice of both companies.