Japan will see a wave of scandals in 2018, and that would be a good thing. In recent months, corporate Japan has already been buffeted by various embarrassing instance. Big companies like Nissan, Mitsubishi Materials and Kobe Steel have admitted that they used testers who weren't qualified or they sold products that weren't quite up to spec.
I think there's gonna be more of that in the coming year because none of the underlying problems have been solved. In many cases, work forces are stretched very thin. Bosses don't really have full visibility into what's going on in their companies. And we're also seeing a fraying of the work for life loyalty system that used to define Japanese labor.
As of that phrase, I think more workers will be tempted to blow the whistle. Ultimately, I think this is a healthy thing for Japan because it means companies reforce to get a grip. Bosses will need to know exactly what is going on inside their organizations. There are more independent directors working on company boards.
They, if they are worth anything, should be pressing executive teams to ensure they know exactly what is going on, that they have the adequate systems and controls in place. And if they're not doing that, shareholders should be pressing the boards and saying you need to make sure that your company is run properly, that there is nothing funny going on deep down in the of your organization.
In some cases, that might mean hiring outsiders who will need to do kind of audits or in other ways investigate and check that processes and procedures are properly followed. All in all, it would be painful. There would be lots more shots of Japanese executives bowing deeply to apologize from embarrassing step ups.
But when all is said and done, this would be good for Japan Inc.