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The long road to be a truly compliant company

2017.09.21
Hiroki Nanba



Hiroki Nanba
General Manager, Legal Dept., Business Administration Div., TAISEI CORPORATION


This work was supported by JSPS KAKENHI Grant Number 15K03220. (Public Relations Office)

"…Then Aslan turned to them and said:

'You do not yet look so happy as I mean you to be.'

Lucy said, 'We're so afraid of being sent away, Aslan. And you have sent us back into our own world so often.'

'No fear of that,' said Aslan. 'Have you not guessed?'

Their hearts leaped and a wild hope rose within them.

'There was a real railway accident,' said Aslan softly. 'Your father and mother and all of you are—as you used to call it in the Shadowlands—dead. The term is over; the holidays have begun. The dream is ended: this is the morning.'"

(C.S. Lewis/Translated by Teiji Seta The Chronicles of Narnia (Iwanami Shoten 2005) p. 524)

1. Introduction

I have been given the chance to participate in the Grant-in-Aid for Scientific Research under the theme of "compliance for increasing corporate value" (JSPS Scientific Grant 15K03220), supervised by Professor Shin-ichiro Touyama from Chuo Law School.

These research activities have caused me to reflect on compliance, once more. Although it is still a work in progress, I would like to talk about what has been achieved up to this point, from my perspective.

2. Compliance is not as simple as you think

When we talk about compliance and compliance violations (scandals), we tend to think of these occurrences in a stark contrast of right and wrong.
 

However, there are many types of compliance violations.


One type is a compliance violation with malicious intent. These are dishonest cases that cross the line in which the person or persons committing the violation is fully aware of their wrongdoing. It may be caused by unsavory decisions made by one individual, or it may be conducted by an entire organization. Frankly, cases like these have moral, ethical and conscience-related issues.


Another type is a compliance violation due to amae (dependence). There is no certain malicious intent in these cases, but sloppy self-management or immature awareness leads to the perpetrator thinking, "who cares," or becoming negligent, thoughtlessly involved, having weak defenses, or getting carried away on what was initially supposed to be a joke. There are some instances of organizations committing this type of compliance violation, but most violations are on a personal level.


Additionally, there are unwarranted compliance violations. These violations are caused by conspiracy, scapegoat, responsibility that comes with one's status, and involve forced resignation with no opportunity to explain oneself, and being forced to accept the situation, which was out of their control in the first place.


However, when compliance is taught focusing on the most heinous types of compliance violations in order to preach the importance of observing compliance, the audience reaction usually is, "I'm not such a bad person, and would never have the nerve to do such a thing. This does not apply to me." This disassociation consequently leads to the audience dozing off…


As I have said, there are many levels of compliance violations, which means that on the other end of the spectrum, observing compliance also has various facets to it. Examples include enhancement of corporate value-type or conventional/controlled-type compliance and both types are consistent with each other.


This multifaceted approach can also be applied to the idea of "compliance brings profit." For instance, B2C companies can positively boost their corporate image by applying compliance "makeup," which will directly result in sales. On the other hand, even if B2B companies apply their compliance "makeup," it will not score them points in competitive bidding. Because positive effects are not seen immediately, it would be easier to understand the reasons for observing compliance from different viewpoints—for instance, making efforts to observe compliance to prevent losses from penalties such as debarment from bidding.


Of course, the idea "compliance brings profit" is true for B2B companies as well. Yet, the meaning of profit differs from B2C companies. For B2B companies, profit is something that is not immediately visible. We can say that for these companies, profit means leading each employee toward happiness by enabling sustainability as a "good company" on a medium to long-term basis.

3. How to get compliance to permeate

For the most part, divisions promoting compliance in major companies consist of a few employees who do their best while struggling and worrying every day.

However, for the most part, these divisions are not always on the company's main circuit. Although some may be directly under the president's jurisdiction, in reality, having direct access to the company president simply does not mean that compliance measures will spread to all areas of the company.

It is said that powerful leadership of corporate executives is important for compliance. Yet, this is not the ultimate factor, and in a way, it shows that the compliance promotion division is lacking in power.

Still, the best that can be done is implementing group training, smaller group sessions, E-learning and rigid enforcement of manuals and checklists, yet there is no perfect method to go about this.

It is not an easy task to advocate compliance to each and every employee in a company. It is really easier said than done.

Compliance violations, no matter the degree, are each starkly human and uncouth. This is because each individual related to, or mixed-up in, violations has their life on the line—such as being punished, blamed and imprisoned.

A company is an abstract concept of a corporate body. Saying that we want to "become a company that comprehends and applies compliance" in itself is already an abstract concept.

On the other hand, the people who actually apply compliance are the ones who put their lives on the line in that company. We cannot avoid taking time to explain the starkly human and uncouth aspects when advocating compliance to everyone. Glossing over the dirty details will not be effective.

4. Applying this to Taisei group

Source:TAISEI CORPORATION Websie Source:TAISEI CORPORATION Websie
One catch-phrase for Taisei group, where I belong to, is "Results of work remain on the map."

Our works create the foundation for many things in this world. That is why our works are engraved in maps and makes us want to say, "This is what my company built" to our families and loved ones. Having this kind of pride will allow us to become aware of not taking actions that society would disapprove of, or that soil the achievements of our predecessors. Isn't this what compliance is all about?

What is more, I believe that having this pride in everyone’s mind will result in proceeding forward as a good company, which will result in increasing corporate value.

Naturally, this cannot be accomplished in a day—we are looking at a long road.

To start off, even if we try preventing corporate damage that occurs right before our eyes, results of those efforts may be limited and other scandals may occur. However, we can only continue such efforts experiencing setbacks and learning from them, while dreaming the day when we achieve the status of a "truly compliant company" at last.

This is almost like when King Tirian and Queen Lucy of Narnia overcame their many hardships in the Shadowlands and made it to beautiful Narnia at the Golden Gate, and were then told by Aslan they need not worry about going back.
Hiroki Nanba
General Manager, Legal Dept., Business Administration Div., TAISEI CORPORATION


Born in Niigata Prefecture, 1961
Graduated from the Department of Law, Faculty of Law, Niigata University in 1984
Joined TAISEI CORPORATION in 1984
Finished the Master's Program at the University of Tokyo Graduate Schools for Law and Politics in 1995
Assigned to the TAISEI CORPORATION Legal Dept. in 1995 (Holds present post from June 2017)