Tepco President Masataka Shimizu, left, reads a statement at the company's head office in Tokyo Friday, May 20, 2011, saying he was stepping down. (Itsuo Inouye/AP)
The resignation was not unexpected, especially on a day when Tepco posted an annual loss of $15.28 billion, the largest yearly loss in Japanese corporate history outside of the finance sector. The company has been called out for ignoring warnings that its plant could not sustain a major tsunami, and has been widely criticized for its inability to stabilize the reactors, secure worker safety and come up with a timetable for evacuees to return home. The president was even hospitalized soon after the crisis occurred for hypertension and fatigue, prompting many questions about the missing face of Tepco’s leadership.
Shimizu will be replaced by Toshio Nishizawa, Tepco’s current managing director. This may seem like empty change amid a crisis that apparently has deep roots. Nishizawa, a 36-year veteran of the company, presumably was at Tepco when those safety warnings about the Fukishima Daiichi plant were issued and ignored, and doesn’t represent a break from the culture that didn’t do enough to respond to them.
But bringing in an outsider to Japan Inc. isn’t a realistic option. Japanese companies are known for promoting internally, almost exclusively, and for executives’ career-long tenures with their companies. Whether or not this is a good thing when looking for new leadership in a crisis is certainly debatable, but the culture shock that would follow an outside CEO trying to shake things up might do more harm than good.
And there may be no one inside the company who offers Tepco the sort of break from the past that BP had when it named Robert Dudley, an American who grew up in the area affected by the oil spill crisis, to replace Tony Hayward, the embattled and public relations gaffe-prone CEO who was at the helm of BP when the spill occurred. While that may have given the oil company a short-term headline boost for the change, a year later it’s not clear whether naming a veteran BP Brit would have been any less efffective.
Rather, while it may not be ideal, some kind of change at the top is what matters. Shimizu’s resignation will likely do little to bring a “close” to the crisis, as he said in his remarks—the company still must pay out billions in compensation to affected families and decommission the four reactors—but it does mark a symbolic end to the worst of it. By stepping aside, Shimizu will give his successor the chance to address the problems of the past without having been at the helm when the decisions that led to them were made. He will provide a fresh face to outsiders who can only see the mistakes of the current leadership in the tragedy’s aftermath. And it will give the company a new yardstick by which to measure its progress going forward. It’s not perfect, but symbols rarely are.
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