The wealth and welfare of everyone living in Japan is based on the success of Japanese companies, how well companies are managed, and how managers are encouraged, supported and controlled.
Therefore corporate governance reforms are an important part of the “Abenomics” economic reform program. Many think that the corporate governance reforms of recent years have been the most successful part of Abenomics, and the former Chairman of the Tokyo Stock Exchange even said that these reforms happened much faster than he had thought.
Corporate governance mainly refers to the responsibilities of Board Directors who take part in the major decision making of every company, who supervise and support the executive management including the CEO/President of the company, and this make essential contributions to the success of companies.
Another aspect of corporate governance is the “stewardship code”, which refers to the influence of investors on company’s executive management.
Understanding decision making and the control of management, the way Japanese companies reach decisions and how this decision making is supervised, is essential knowledge for everyone who works to persuade Japanese corporations to take desired decisions, e.g. to achieve sales, partnerships, investments, or even Mergers and Acquisitions (M&A), who invests in Japanese corporations. Employees should also understand how the companies they work for are run.
This talk will explain the major components and fundamentals of corporate governance and its reforms in Japan based on several years of practical hands-on experience on the Board of Directors and on the Supervisory & Audit Committee of a stock market listed Japanese corporation.
Speaker: Gerhard Fasol
Gerhard Fasol graduated with a PhD in Physics from Cambridge University and Trinity College. He worked as research scientist at the Max-Planck-Institute Stuttgart on semiconductor and solid state physics research. He was tenured Faculty in Physics at the Cavendish Laboratory of the University of Cambridge, and he was Research Fellow, then Teaching Fellow and Director of Studies in Natural Sciences at Trinity College Cambridge. He was Manager of the Hitachi Research Laboratory in Cambridge, Associate Professor in Electrical Engineering at Tokyo University, and is founder of the advisory firm Eurotechnology Japan. He is Board Director of GMO Cloud KK, and since April 2017 he is Visiting Professor at the University of Kyushu.
Copyright (c) 2017 by Eurotechnology Japan. All Rights Reserved.
Kyushu’s economic growth in comparison, and engineering education’s responsibility
Kyushu’s economic growth stopped around the year 2000, while most other comparable economies in advanced countries have continued to grow. e.g. Holland’s and Kyushu’s economic size were about the same in the year 2000, while today Netherlands’ economy is about two times the size of Kyushu.
Many studies have shown the contributions of universities to economic growth, and for example MIT has determined in detail the contributions of MIT to economic growth.
Although we should not read too much into University’s ranking tables, there is a drastic difference in the ranking of Kyushu’s Universities and Netherlands’ or Singapore’s Universities.
I think there are strong arguments, that improvements of Kyushu’s Universities including engineering education are necessary to enable a restart of Kyushu’s economy.
Thus the need for restarting Kyushu’s economic growth provides a strong motivation to improve engineering education in Kyushu.
How to improve engineering education: Escaping Flatland
“Inbreeding” is well recognized as Japan’s Universities’ top problem to overcome. People must circulate to circulate ideas.
Example: in Germany we have “Hausberufungsverbot”, not only in Universities, but also in many other organizations, and we have “Lehr- und Wanderjahre” with 100s of years of history.
Japan also has a long tradition of welcoming and adopting philosophy, religion and technology from many countries including India, Europe, USA, Korea and many other areas.
“Flatland – a romance of many dimensions” by A. Square (Edwin A Abbott) has been written both as a mathematics teaching tool to visualize dimensions, by introducing a society confined to live in two dimensions = FlatLand.
Flatland is both a geometrical teaching tool, as well as a psychological study.
The three key elements in a successful ecosystem for innovation
Professor Ian Walmsley, Pro-Vice-Chancellor for Research and Innovation of Oxford University, recently explained that there are three key elements in a successful ecosystem for innovation:
Critical mass: sufficient capacity for generating and identifying good and fruitful ideas
Cross-fertilization of concepts: the collision of different ways of thinking, both cross-disciplinary and cross-cultural
Competitive tensioning: ideas must be compared with the best of the world
How to improve engineering education: Traditional lectures vs Active learning
Pioneering education research by Ibrahim Abou Halloun and David Hastens (American Journal of Physics) shows the physics (and engineering) students mostly enter university with “Common Sense” (CS) views of physics. CS is basically pre-Newton and related to Aristoteles works (384-322 BC).
Aristoteles work was the basis for physics understanding and teaching for about 2000 years, until Newton revolutionized our understanding of physics, based on mathematical analysis and modeling of experimental observations.
Education research shows that a large fraction of students enter University with Common Sense (CS) views on physics, and too few students are “converted” to Newton’s views of physics, and traditional lectures are not very effective at achieving this “conversion”.
R W Revans (1907-2003) introduced the concept of “active learning”.
Comparative studies (Scott Freeman, Sarah Eddy, Miles McDonough, Michelle Smith, Nnadozie Okoroafor, Hannah Jordt, May Pat Wenderoth, PNAS) show that active learning achieved 21.8% examination failure rate, while traditional lecture based teaching resulted in 33.8% failure rates (55% higher than active learning).
Thus we need to develop active learning to supplement or replace traditional lecture based teaching, and bring active techniques to students, and let students do curiosity based research as early as possible.
In Cambridge University and Oxford University “supervisions” are another alternative to classical lectures.
Copyright (c) 2017 by Gerhard Fasol. All Rights Reserved.
Bill Emmott is an independent writer and consultant on international affairs, board director, and from 1993 until 2006 was editor of The Economist. http://www.billemmott.com
Gerhard Fasol is physicist, board director, entrepreneur, M&A advisor in Tokyo. http://fasol.com/
Japan’s future: A conversation
I came first to Japan in 1983 as Economist Tokyo Bureau Chief, staying until 1986. Then in 1988 I came back on sabbatical leave and wrote “The sun also sets: why Japan will not be number one”, which against my expectation when it was published in 1989 found big resonance in Japan. The stock market was plunging, and mine was the most immediately available explanation. Ever since, journalists have constantly asked me what the sun is doing now! It also meant that even when I became editor in chief of The Economist in 1993 I spent much more time focused on Japan than I had expected, visiting as often as I could to keep track of the post-bubble developments, and wrote a book that appeared only in Japanese translation called “Kanrio no Taizai”, or the bureaucrats’ deadly sins. But later, with Prime Minister Koizumi consolidating reforms, and the banking system at last getting cleared up, I sent myself back in 2005 to research and wrote a much more optimistic special supplement for The Economist which became a book, “The sun also rises”.
Throughout the 35 years since I first came to Japan, I have both been fascinated and struck by the fact that although this is in so many ways an inward-looking self-contained nation, foreign observers are listened to and even have a chance of having a positive impact.
One element that had featured consistently in my writings ever since the 1980s had been observations and expectations for a growing role for women in employment and power. This seemed logical given that, at least before the bubble burst, Japan was heading for a labour shortage, but also the Equal Employment Law of 1986 had led to more females being recruited by major organisations. Japan’s excellent education surely meant that the underused half (= women) of the adult population would soon be used more productively.
Of course, this has developed a lot more slowly than I expected or hoped, partly for cultural reasons but also because Japan has not in fact had a labour shortage, until now.
I wanted to meet you, Gerhard tonight because we both are fascinated by the role Japanese women have in making Japan such a fascinating country, and how the many really strong Japanese women could have key roles in bringing growth and dynamic change back to Japan.
Could Japanese women have bigger roles for the development of Japan?
What is holding women back in Japan?
Who are the role models?
I am making interviews with high-achieving Japanese women to try to find answers, and plan to compile them into a book later this year. What would you say, Gerhard? And anyway, how did you end up here?
My path to Japan is quite different than yours, Bill. I came to Japan first in 1984 as Fellow of Trinity College Cambridge, and scientist at the Max-Planck-Institute in Stuttgart, part of a project to build a research cooperation with NTT’s R&D labs. I saw that Japan was very important in technology and weakly linked to the outside – and still is today, I think. So in 1984 I decided to make Japan my second professional focus in addition to physics and electronics. Like you – the deeper I get into Japan, the more I learn about Japan, the greater my fascination, and my motivation to contribute.
Now I am working on many different projects, working on international technology M&A projects, and I am also one of a microscopic number of foreigners on the Board of Directors of a stock market listed Japanese corporation – reforming Japanese corporate governance hands-on.
Could Japanese women have bigger roles for the development of Japan?
I think that the equal participation of women in leadership is directly linked to the population issue, ie the number of children born.
while in Sweden 44% of Members of Parliament are women,
37% in Germany and
26% in France –
the world average is 23% women in Parliaments.
In Japan the ratio of women in Parliament has increased from 1% in 1990 to 10% in 2016, so there is progress. If we extrapolate, and if the trend continues, then it might take another 30 years or so until Japan reaches world average in terms of women bringing women’s views into Parliament, and taking part in making the laws. And it might take Japan 100 years to reach Scandinavian standards of women’s participation in making the laws of the land – unless there is some acceleration in Japan.
Japan’s most powerful Ministry, the Ministry of Finance, did not hire any women into career positions for a period of about 10 years!
At the 2015 New Year event of Kyoto Bank, Keidanren Chairman Mr Sadayuki Sakakibara showed that Japan’s spending on aged people is dramatically higher than spending on children, and that this ratio is increasing with time, Japan spends more and more on aged people and less and less on children. There are two ways to look at this situation:
one way is to say: we have an aging society, therefore its only natural to spend more on
the aged, and less for children
the opposite way to look at the same situation is to say: we are spending less and less for children, no wonder we have fewer and fewer children. If we did more for young people, maybe people will have more children….
Actually most Japanese women I talk to want 2-3 children, but many cannot for financial reasons.
By nature, women give birth to children, not men, so more women in decision making positions including Government and Parliament will bring children’s issues into decision making.
As an example, child birth costs in Japan are not covered by health insurance, while they are everywhere in Europe. There are many other open and hidden costs of having children in Japan compared to Europe.
The most important factor are mindsets. The key to give more power to women in Japan is to change mindsets, to change the way of thinking.
As an example, the Prefecture of Kanagawa in 2015 created the “woman act” committee, under the slogan “women, step by step, take more responsibility”, however this committee both in 2015 and also in 2016 consisted of 11 men – not one single woman leader: http://www.pref.kanagawa.jp/osirase/0050/womanact/
Why not create a committee of 11 women leaders to lead efforts on gender equality in Kanagawa Prefecture? Why not promote women to leadership positions in Kanagawa Prefecture?
Another factor holding women back are the very long working hours common in Japan. As an example, at a recent EU-Japan gender equality conference, the Danish polician Astrid Krag, who was Minister for Health and Prevention at the age of 29 – 32 years, and who has two children, explaned that in the Parliament of Denmark the decision was taken not to take any vote after 4pm, so that Members of Parliament can be back home by 5pm, collect children from daycare centers in time etc. So in the Parliament of Denmark it is guaranteed that Members of Parliament can leave at 4pm. In today’s Japan such action is unthinkable, age 29 – with young children – would be unbelievably young for a Government Minister in Japan. https://en.wikipedia.org/wiki/Astrid_Krag
Late-night or overnight sessions at work, including Parliament, makes life incredibly difficult in Japan for parents with young children, doubtlessly contributing to the small number of women in top positions in Japan.
Who are the role models?
Despite these difficulties, there is a substantial number of very strong women in Japan, who have worked their way up into leadership positions.
Examples are the Mayor of Yokohama, Ms Fumiko Hayashi, who succeeded in a very distinguished business career, and the Governor of Tokyo, Ms Yuriko Koike, who won the election on her own as an independent candidate, because she did not receive the backing of her party.
That is great, as I have now interviewed Koike-san and plan to interview Hayashi-san during my next visit. Personally, as well as admiring women who have made it to the top in the tough political world I also admire and am interested in women succeeding as entrepreneurs and as executives in entrepreneurial companies. By starting and building their own companies, women can really create new realities, showing that new organisational cultures are possible in a Japanese context. Do you agree?
The tantalizing issue is that the key is to change mindsets, and thats at the same time superficially easy, but at the same time incredibly hard. Thus outstanding strong Japanese women – and there are many of them – have a choice either to work their way up to the top in Japan, start their own company in Japan, or on the other hand to move to Europe, elsewhere in Asia, or to the USA – I know several strong Japanese women, including several Japanese medical doctors, who have moved to Europe or USA. They might of course come back to Japan at a later stage bringing global views and experiences to leadership positions in Japan in the future. I am very optimistic for the future of Japan – sometimes I wish things were moving faster.
I agree entirely. I see Japanese women as both victims of the slow speed of change and as solutions to it. They really could make the Japan of 2030 look quite different, in all sorts of ways. It will be fascinating to watch.
Bill Emmott and Gerhard Fasol met at the restaurant MusMus in Tokyo
Copyright (c) 2017 by Bill Emmott and Gerhard Fasol. All Rights Reserved.
Energy costs in Japan: A presentation to diplomats from the 28 EU countries (+ Norway and Switzerland) given at the EU Delegation in Tokyo on Thursday 18 May 2017
How can you reduce your energy bills?
Energy costs in Japan, how to reduce energy costs, and the current energy situation in Japan post-Fukushima are inherently linked and are the topics of this talk given by Gerhard Fasol at the EU Delegation (EU Embassy) in Tokyo on Thursday 19 May 2017.
Electricity prices in Japan compared to EU countries. Electricity charges in Japan are about 40% cheaper than in Germany.
Energy costs in Japan: Even now, post-Fukushima, electricity costs in Japan are not particularly high, if Japan was a EU country, Japan’s electricity costs would be ranked at about 15th or 16th rank.
Japan’s electricity charges are about 40% cheaper than in Germany, and on a similar level as in France or UK.
Czech Republic c€31.92
(source: Eurostat as of July 2013, energy costs in Japan: electricity costs for Japan are typical Tokyo household electricity charges)
Paradigm shift: redesign the electricity grid
We see a paradigm shift: we need to change how we think about energy. Our electricity supply system has been built over the last more than 100 years and many design principles have been decided 100 years and have then been frozen in, although they might not be the best choices any more in today’s world.
Traditional electricity grids are designed top-down, with large centralized power stations at the top, and a distribution system down to the end users.
This traditional hierarchical top->down integrated grid structure is globally in the process of reinvention. The different services:
grid frequency stabilization
are being split into separate businesses, and each one is being deregulated. In addition, the top-down structure is changed: renewable energy sources, micro-hydropower station and other sources feed electricity into the grid from the bottom-up, requiring changes in the design and management of power grids.
In Japan the traditional electricity grid has three hierarchical layers:
Special high voltage (特別高圧)
500kV, 270kV, 140kV
High voltage (高圧) 6kV
Low voltage (低圧) 200V, 100V
These three markets (1) Special high voltage, (2) High Voltage, (3) Low voltage, are approximately of equal size in Japan, and represent each about 1/3 of Japan’s electricity market. The (3) Low voltage market was deregulated on April 1, 2016, and the other two market sectors earlier. Up to March 31, 2016, 10 regional electricity operators had the monopoly in the retail (low voltage) sector of their regions. Since April 1, 2016, all markets are liberated and low voltage segment consumers are free to buy their electricity from a number of suppliers.
Electricity started in Japan in 1893:
The first generator in Tokyo was from the German firm AEG, and therefore 50Hz
The first generator in Osaka was from the US firm General Electric, and therefore 60Hz
Event today the west of Japan has 60Hz, while the east has 50Hz. Since semiconductor electronics enables frequency conversion, and since long distance transport is frequently DC anyway, this 50Hz/60Hz split is very unlikely to change.
For historic reasons, most electricity is delivered to end customers as AC (alternating current), however most consumption today is increasingly DC (direct current). e.g. LED lighting, computers and most IT equipment including data centers require DC electricity. Solar power plants also produce DC electricity. Battery storage also requires and delivers DC electricity. So we might see an increasing shift to DC electricity supplies.
How to reduce your energy bill
Energy costs in Japan: in the past urban design typically maximized electricity sales:
“All Denka” was a long-term campaign by Japan’s electricity industry to maximize the consumption of electricity
build the town in order to sell as much electricity/air-conditioners/gas as possible
top-down: huge nuclear power stations far away + top-down distribution system
single windows, save money on insulation
heating in winter, air conditioning in summer
In the future
communities, companies and household take responsibility of energy locally
“positive energy buildings”: buildings generate and sell electricity instead of consuming. Example: MORI-Roppongi Hills
THINK: Marunouchi & MORI Buildings: “we want to be so well prepared for disasters, that people don’t run from our buildings, but that people come to our buildings for safety”
How to reduce your energy bill > earn money selling electricity
Plan, design and build energy positive buildings, sell electricity
buy low-energy equipment, e.g. air-conditioner, washing machine
fuel cells (e.g. Bloom (gas), or Enefarm, Panasonic) > off-grid
negotiate supply contracts, combine gas & electricity & phone/internet to get discounts
e.g. all three major phone companies (KDDI, Docomo, SoftBank) sell electricity, internet access etc + electricity. Combine: phone, internet, electricity to get discounts.
Nature governs energy – nature cannot be fooled
Today’s energy situation in Japan is directly a function of the outcome of the Fukushima-Dai-Ichi disaster.
To understand the reasons for why the Fukushima-Dai-Ichi disaster happened, it is necessary to go back in history, there is not one single reason for this nuclear disaster but many starting at the design decisions taken even before the construction started.
It is instructive to compare the situation of TEPCO’s Fukushima-Dai-Ichi nuclear power plant with Tohoku Electric Power’s Onagawa nuclear power plant:
TEPCO’s Fukushima-Dai-Ichi nuclear power plant: tsunami height = 13 meters, one of the worst nuclear disasters
Tohoku Electric Power’s Onagawa nuclear power plant: tsunami height = 13 meters: successful shut down without damage, served as a refuge for about 300 people from the neighborhood who had lost their homes in the tsunami and earthquake disasters
Why the difference?
TEPCO’s Fukushima-Dai-Ichi nuclear power plant: ground elevation was reduced from 35 meters to 10 meters to save cooling water pumping costs
Tohoku Electric Power’s Onagawa nuclear power plant: Yanosuke Hirai carefully research previous tsunamis, especially the Great Jogan Tsunami of July 13, AD 869, built 13.8 meters above sea level
A few days after the Fukushima-Dai-Ichi disaster, US President Obama sent 150 top nuclear engineers to Japan for 11 months to assist directly the Japanese Prime Minister and the Japanese Government and TEPCO to mitigate the nuclear disaster. The Leader of this team of 150 US nuclear experts was Chuck Casto, who I invited two times to talk at the Ludwig Boltzmann Forum events. Read Chuck Casto’s explanations of the Fukushima Disaster here:
I also invited the Kiyoshi Kurokawa, the former Chairman of Japan’s Parliamentary Commission into the Fukushima Nuclear Disaster, to speak at the Ludwig Boltzmann Forum:
Kiyoshi Kurokawa: “Groupthink can kill” (6th Ludwig Boltzmann Forum 20 February 2014)
Nature governs energy, and nature cannot be fooled (Richard Feynman)
Global trend: reengineering the grid. Localize, democratize, liberalize, deregulate
Renewable energy: wind power can cover all of Japan’s energy needs (in principle)
Energy, electricity and gas market liberalization is going ahead
Abstract: Changing the way Japanese corporations are managed
The Executive Management Board and the Supervisory Board are normally independent and composed of different people – except in Japan. In Japan traditionally Executive Management Board and the Supervisory Board are one and the same, ie the Executives of traditional Japanese companies supervise themselves – no surprise that the CEO seldom fires himself!
It is obvious that such self-supervision has big disadvantages, and may be one of the major reasons for Japan’s weak economic growth, and several recent corporate scandals. Companies in basically all other countries are managed by an Executive Management Board, which is supervised by a Supervisory Board, which approves or vetoes all major decisions of the company, and evaluates the performance of the Executive Manager, including the Chief Executive/CEO, and if necessary fires executives including the CEO, and selects and approves the new CEO.
To remedy this problem with the governance of Japanese corporations, Japan’s Government, the Tokyo Stock Exchange, and the Financial Services Agency have been changing the rules to improve the supervision of Japanese companies.
Dr. Gerhard Fasol is one of a microscopic number of foreigners who is an independent Director on the Management and Supervisory Board, and also a Member of the Audit Board of a stock market listed Japanese corporation, and he will talk from several years of first-hand experience of how Japanese companies are supervised, which changes are on the way, and which further improvements are necessary to improve the management and supervision of Japanese corporations.
Date: Thursday October 6th, 2016, 18:30
Place: Alfred Nobel Auditorium, Embassy of Sweden, 10-3-400 Roppongi 1-chome, Minato-ku, Tokyo 106-0032
Japan’s globalization puzzle: intriguing questions by one of my great European friends, a great European banking sector leader
How do you explain Japan’s lack of internationalization with so many big Japanese holdings managing successfully businesses abroad (e.g. Toyota, Toshiba, Mitsubishi, etc.)
Japan’s globalization paradox – a closer look
Its not so simple: Japan is a huge country, third globally, and there are 3500 Japanese companies listed on the Stock Exchanges – they are all different. Some Japanese companies are very excellent and successful and global leaders or even No. 1 in their fields – e.g. you mention Toyota and there are many more.
There are two main factors limiting Japan’s growth
decreasing and aging population. few babies and no immigration.
structural reasons (slow growth by traditional established corporations, and too few new high-growth industries), corporate governance issues, addressed by Prime-Minister Abe’s “third arrow”, however most people agree that Prime Minister Abe’s “third arrow” reforms have been more words than action. Maybe the most or only successful “third arrow” reform are Japan’s corporate governance reforms
You mention Toshiba – Toshiba is a famous global brand in many sectors, and Toshiba has developed many important technologies in many areas from medical technology (Toshiba’s medical sector has been sold to Canon as a result of Toshiba’s accounting scandal), semiconductors (especially flash memory), but Toshiba’s profits/income averaged over 20 years is close to zero, ant Toshiba did not grow for 20 years, and went through a series of accounting scandals etc. Now as a consequence of these scandals, Toshiba has to sell off several important growth divisions, e.g. their very valuable medical technology sector to Canon. Read comments on Toshiba here: http://www.eurotechnology.com/2015/07/21/toshiba-income-restatement/
or read in Wall Street Journal about Toshiba here 2 days ago http://www.wsj.com/articles/toshibas-turnaround-needs-more-work-1471007429
Toshiba’s accounting issues are the result of a combination of mainly two factors:
20 years no growth and essentially no profits, compounded by financial problems in the nuclear industry segment as a consequence of the Fukushima Dai-Ichi nuclear disaster (Toshiba had acquired the nuclear manufacturer Westinghouse, and thus is a major nuclear industry manufacturer and contractor)
Companies such as Toshiba, benefit from their globally famous brand, therefore I am quite optimistic that Toshiba and other Japanese companies in similar situations can recover, if the correct management decisions are taken, and if corporate governance is improved – and this is exactly the reason why the current Japanese government sees corporate governance reforms in Japan as a major priority.
There is no doubt in my mind, that if corporate governance, management and other factors are improved, companies like Toshiba can be transformed into iconic companies, but these will be different companies than today.
As an example, both SONY and HITACHI are quite successful in their revival efforts.
Mitsubishi – there is no Mitsubishi Holding Company, but 1000s of companies with Mitsubishi in their name…
As another example you mention is Mitsubishi. There is no single company with the name “Mitsubishi” in Japan. There are 1000s of companies with Mitsubishi in their name, and most are loosely grouped into the Mitsubishi Group – which is not a legal entity, and at their core is Mitsubishi Trading Company, and Tokyo Mitsubishi UFJ Bank etc. In some cases there are cross-shareholdings within the Mitsubishi Group, but these have been reduced much over the recent years. There is no “Mitsubishi Holding Company”. Most companies with Mitsubishi in their name are independent companies, many independently on the stock exchange.
Together the Mitsubishi ‘Group’ is a big part of Japan’s economy – maybe 10-15%, but the ‘Mitsubishi Group’ is not a corporate group in the Western sense. Some of these companies are very successful and very strong – some are very good, but some have difficulties – which can also be overcome. An example is Mitsubishi Motors, an automobile maker, which was acquired around 2001 and then divested again in 2004-2005 by Daimler (then Daimler-Chrysler), and is currently being reformed by Nissan under the guidance of Nissan/Renault CEO Carlos Ghosn.
(Masamoto Yashiro is my great friend and a legend in Japan’s banking and energy industry. He built Shinsei Bank from the ashes of the bankrupt Long Term Credit Bank of Japan, and served in leadership positions (Chairman, CEO, Board Member) in Esso, Exxon, Citibank, Shinsei Bank, and the China Construction Bank)
Download Gerhard Fasol’s Stanford University lecture “New opportunities vs old mistakes – foreign companies in Japan’s high-tech markets”
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One of my friends asked me who the owner of the Vienna State Opera House is
Wiener Staatsoper organization and ownership, as for Austria’s top 5 Theater Houses, is determined by the “Bundestheaterorganisationsgesetz” (BThOG)
One of my friends asked me the question “Who owns the Wiener Staatsoper these days by the way?”. This is easy to answer. Hold tight and read:
The major Austrian Theater Houses (Wiener Staatsoper, die Wiener Volksoper, das Burg- und das Akademietheater) are considered by law as the representative “Bühnen” (=stages) of the Republic of Austria, and are governed by the “Bundestheaterorganisationsgesetz” (BThOG) <- one word! you know German has long words...
According to this law, the Staatsoper belongs to the company “Bundestheater-Holding Gesellschaft mit beschränkter Haftung”, which belongs 100% to the Federation of Austria (Bund).
To understand the ownership and Governance, you need to read § 3 of the Austrian Federal Law, the Bundestheaterorganisationsgesetz. Essentially it says that the four major Austrian Theater Houses (Bühnen) above including the Wiener Staatsoper belong to a company called: “Bundestheater-Holding Gesellschaft mit beschränkter Haftung” which is founded by the Federal Chancellor, and which belongs 100% to the “Bund”, the Austrian Federation = the Federal Government of the Republic of Austria.
Read the “Bundestheaterorganisationsgesetz” (BThOG) here
English: State opera in Vienna
Deutsch: Wiener Staatsoper, fotografiert vor 1898
Date circa 1898
Source Julius Laurenčič (Hrsg.): Unsere Monarchie – Die österreichischen Kronländer zur Zeit des fünfzigjährigen Regierungs-Jubiläums seiner k.u.k. apostol. Majestät Franz Joseph I., Georg Szelinski k.k. Universitäs-Buchhandlung, Wien 1898
Josef Löwy (1834–1902) Link back to Creator infobox template wikidata:Q1705180
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The photograph shows the Gobelsburg Castle in Austria, you can see the location here on Google maps. A castle of this name is mentioned in 1178, and wine is grown in the region for about the last 1000 years.
Japanese people’s views on nuclear power are polarized, and its unclear and unpredictable when nuclear power stations will be switched on again in Japan. Read what the Governor of Niigata Prefecture has to say, who hosts the world’s largest nuclear power plant with 7 reactors and 8 GigaWatt capacity.
According to the Japanese Energy Fundamental Law, the Government has to publish an official Energy Basic Plan at regular intervals. You can read the 4th Energy Basic Plan published on April 11, 2014, and listen to a commentary on it for The Economist here on YouTube. The 4th Energy Basic Plan starts with the assumption that Japan is poor in natural energy resources, which of course is only true if we restrict “natural energy resources” to fossil resources. Japan is actually potentially very very rich in renewable energy sources, as the scenario plans developed by Japan’s Industry and Economy Ministry (METI) and Japan’s Environmental Ministry show.
Foreign companies in Japan, and Japanese companies overseas face a dilemma: expensive expatriates with limited local know-how, or local management? Japanese companies seem to have finally reached the conclusion that Japanese managers eg sent to Germany are in most cases not the best choice to lead a German-based multinational company – here are some great recent examples:
Docomo acquires a majority stake in net mobile AG, however net mobile AG remains a publicly listed company. Read details here.
NTT DATA acquires SAP solution provider itelligence AG, however itelligence AG remains an independently managed company under the founder’s management, and grows aggressively via acquisitions all over the globe. Read details here.
NTT Communications acquires a majority of Integralis, Integralis is renamed NTT Com Security AG, however NTT Com Security AG remains traded on the m:access market of the Munich Stock Exchange. Read details here.
Carlos Ghosn is very well aware of such multi-cultural management issues and how to solve them, however too many EU companies in Japan are not. If they were, EU investments in Japan could be at least 50% higher – as you can read here.
Geeky way to persuade people climb the stairs – see in in Tokyo/Shibuya
Its not easy to persuade people to climb the stairs instead of taking the elevator.
Tokyu Hands store in Shibuya found a geeky way to persuade people to Keep fit and save electricity at the same time:
Show the calories your body burns walking up the stairs, which should help you loose weight – and save on the store’s electricity bill at the same time.
After the Fukushima nuclear disaster and the closure of all of Japan’s nuclear power stations, saving electricity has become a top priority. In Tokyo’s subway and trains fluorescent lighting has been replaced by LED lighting, some fluorescent tubes have been removed, and some elevators were at least temporarily shut down to save electricity – in Japanese: 節電. The Tokyu Hands Store in Shibuya found a geeky way to encourage customers to keep fit, burn calories, climb the stairs, and save electricity all at the same time.
Prime Minister Abe urges reform of corporate governance
Slow but steady change…
Reuters reports that Japan’s Prime Minister Abe urges company boards to reform corporate governance to include independent directors. I added the following comment.
Corporate governance in Japan: exercise of shareholder power and emergency situations
The question of independent Board Directors is often framed in terms of exercising shareholder power over the company, as is the main message of the article above. Another focus of discussions on the role of outside independent directors, is during emergencies, and here the Olympus case is often cited.
Corporate governance Japan: steady state contributions of independent directors
However, in my experience in Japan, including my work as a non-Japanese independent Board Director of a public Japanese company, enlightened companies will welcome independent Board Directors for their know-how and contributions to the company – in the end the market decides.
Docomo vs SoftBank
As an example, lets compare NTT-Docomo and SoftBank. NTT-Docomo has a homogeneous pure Japanese Board, while SoftBank has independent Directors from many different countries and from many different walks of life. SoftBank recently overtook NTT-Docomo in terms of market cap, revenues, operating income and net income.
In the end regulations have limitations, regulations influence behavior of course, but regulations do not produce business results or grow new business (with the exception of the compliance industry), and the realities of the market decide, as is the case of SoftBank.