April 19th, 2012
04:54 AM GMT
(CNN) – It’s been a bad year to be a foreign CEO in Japan.
At the start of 2011, there were four non-Japanese CEOs who led listed Japanese companies. Now, with the sudden resignation Wednesday of Craig Naylor – the American appointed as CEO to the Nippon Sheet Glass Group two years ago – there is only one: Carlos Ghosn, the CEO of Nissan.
“Craig Naylor’s decision to tender his resignation reflected fundamental disagreements with the Board on company strategy,” said NSG’s Group Chairman Katsuji Fujimoto in a statement.
That comes after Howard Stringer stepped down after seven years as CEO of Sony Corp. earlier this month, and the epic drama of Michael Woodford, the former CEO of Olympus Corp. who turned whistleblower after he discovered a cover-up of $1.7 billion in losses.
The Olympus saga and paucity of foreign CEOs illustrates Japan’s struggle – despite a dropping birth rate and aging population – to bring in foreign talent, whether to run top corporations or staff retirement homes to counter a national shortage of healthcare workers.
“It’s still quite difficult to get a job as a foreigner, many landlords openly refuse to rent to foreigners,” Harney said. “The Olympus fight brings into contrast that tension that I believe, and I think some Japanese believe, Japan will have to deal with if it wants to generate any significant growth in the years to come.
“We all know that Japanese companies have done well internationally, but they still rely heavily on a domestic market with a shrinking population,” Harney said. “Japan is struggling with what foreign influences it accepts, and what foreign influences it continues to reject.”
The record for foreign chief executives of major Japanese companies hasn’t been good. Woodford was president for less than a year and CEO for only two weeks before he was fired by the Olympus board in October. Stringer was brought in to turn Sony around, yet the conglomerate hasn’t turned a profit the past four years and just finished its fiscal year with a $6.4 billion loss.
Some executives have complained of the difficulty of changing the corporate culture in Japan. In the wake of the March 11 Japan tsunami and quake, Stringer told CNN: ". It's sometimes a problem in the recession, trying to develop a sense of urgency.And a little part of me says this will now have a sense of urgency and this will kick-start the Japanese economy in ways that maybe nothing else would.”
Ghosn, the last man standing, was also the first, brought on board at Nissan Motor Company as chief operating officer in 1999 before being named CEO in 2001. He has proved to be the exception to the rule – a superstar CEO in Japan, where he has been portrayed as a superhero in the magna comic book: “The True Story of Carlos Ghosn.”
“Foreigners like Ghosn, as we saw with Stringer, are increasingly brought in as saviors as last resort based, I think, on the assumption that problems of a company are so severe that only a true outsider can come in and change things,” Harney said.
Indeed, when Woodford was the surprise pick to become Olympus president early in 2011, he said he was told by former Chairman Tsuyoshi Kikukawa: “`Michael, I can't change the company, I believe you can'.”
But now it’s an open question: Can a foreigner truly lead Japan Inc.?
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