TOKYO -- When it comes to demanding more from employees, how much is too much?
It is a question that may not have a hard and fast answer, but Shigenobu Nagamori, chairman and president of motor maker Nidec, has his own rule. "To make a company grow, management often has to ask employees for 130%. But when you ask for 200%, that's too much," he told The Nikkei when asked about the accounting scandal at Toshiba.
That extra 30%, he said, is the most that a competent manager can draw out of employees.
Not everyone agrees, of course. Toshiba's current crisis is largely down to management setting unreasonable goals -- "challenges," as they were called -- for its employees. But even with this example fresh in mind, many executives are reluctant to place a limit on how hard employees should be pushed to deliver.
Watchdogs needed
One thing is certain. To achieve sound management, a watchdog, in the form of a chief financial executive or other official, must constantly be on the lookout to see whether the president is heading in the right direction.
On May 14, Toshiba's rival Hitachi said sales for the year through March 2016 were projected to come to 9.95 trillion yen ($79.53 billion). Toshiaki Higashihara, president and chief operating officer of the electronics company, had reportedly asked for the figure to be set a little higher, at 10 trillion yen. But Toyoaki Nakamura, an executive vice president and chief financial officer, refused. Nakamura said the figure that the company could achieve, and the one it should promise to external parties, was 9.95 trillion.
A report from the independent panel that probed Toshiba's accounting irregularities, released on Monday, proposed such measures as enhancing internal controls and appointing more external directors to prevent another such scandal. These are sounds suggestions, but there is another option, too, one that more Japanese companies are beginning to pay attention to.
Some listed companies, including Astellas Pharma, Chugai Pharmaceutical and restaurant chain Royal Holdings, have hired professionals called certified fraud examiners, or CFEs. The certification is internationally recognized, and those who hold it are expected to demonstrate a thorough knowledge of accounting as well as a deep understanding of matters related to criminal investigations.
CFEs often employ a forensic techniques to identify evidence of fraud hidden in vast amounts of data. They are able to restore deleted emails and other data, and they are also expected to question employees and shadow a worker suspected of wrongdoing to gather further evidence.
There are about 900 CFEs in Japan, including those in charge of auditing or risk management in-house. CFE is already an established profession in the U.S., and growing awareness about accounting irregularities and fraud will likely increase its profile in Japan, too.
(Nikkei)
