Selection of the next Keidanren chair that goes into high gear; Field could be winnowed by the strength of the candidates’ companies

As the current chairman of Keidanren (Japan Business Federation) enters his final year as president, the process of choosing a successor will now move into high gear.

Masakazu Tokura, 73, will end his term as Keidanren chairman next year after serving a total of four years in two consecutive terms.

Tokura has achieved some substantial results, including spearheading the largest wage increases in about three decades.

His replacement will need the same strong communication skills to create a positive economic cycle.

Decarbonization, wage increases

Since taking office in 2021, Tokura has worked to pass a bill to promote a green transition, proposing to pursue decarbonization and economic growth together.

To tackle high prices, he called on companies to raise wages as a social responsibility, resulting in wage increases of more than 5%.

“He is a leader who can balance the interests of society as a whole while representing the business community,” said a senior official at a government economic affairs agency.

The chairman of Keidanren, often referred to as the prime minister of the business community, is often chosen from among the current vice-chairmen of manufacturing companies not affiliated with former zaibatsu conglomerates.

Nippon Steel Corp. Chairman Eiji Hashimoto, 68, is one person mentioned as a possible candidate. He took a tough stance on major customers such as Toyota Motor Corp. in the name of reviving steel production. And his management skills are highly regarded for his company’s V-shaped recovery to post profits, thanks to his work in passing on raw material costs to customers.

As Hashimoto’s company is currently trying to acquire United States Steel Corp., a major American steel company, some have expressed concern that this could affect Hashimoto’s work at Keidanren if he is named chairman.

However, many believe the company will be well prepared to back him for the chairmanship as Nippon Steel is a prestigious company that has produced Keidanren leaders in the past.

Nippon Telegraph and Telephone Corp. Chairman Jun Sawada, 68, is also a candidate for the job as he is expected to focus on business after leaving his post in June.

Some have said that Sawada is well suited for the position because of his extensive contacts in the business world, both in Japan and abroad, including his role as chairman of the Japan-US Business Council.

However, a business source said Sawada’s reputation could be due to his position on the government’s decision to revise the NTT law.

Performance is also critical

Of Keidanren’s four new vice-chairmen, 64-year-old Kenichiro Yoshida of Sony Group Corp. attracted a lot of attention.

A business source said late Keidanren chairman Hiroaki Nakanishi eagerly supported Yoshida’s appointment as vice chairman.

As vice chairman of Keidanren, which advocates for a revitalized entertainment industry, he is expected to be “a leader of the next generation of growth industries,” according to a current vice president.

The performance of the candidates’ companies will also likely be an important factor in selecting the next chairman.

Sumitomo Chemical Co., also chaired by Tokura, posted a net loss of 311.8 billion euros for the fiscal year ended in March.

“Because his company is in the red, he cannot set a good example,” said a source.

The appointment of Tokura’s successor will be completed at the end of this year.