President's column Vol.6

President's column

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商いのほかに会社が出来ること 商いのほかに会社が出来ること

Wisdom and ingenuity in making use of
the structure as a corporate entity.

Six years ago, I started sending out UNICEF postcards for the New Year instead of using the ones with lottery numbers on offered by the post office.
I figured most people would not be so thrilled by winning something from a greeting card they received from a business acquaintance.

I thought I would give New Year’s postcards with some other added value, something that would contribute to society.
I hope this catches on.
I think it would be even better if Japan Post and UNICEF collaborate to jointly create postcards for New Year’s.

Needless to say, the primary interest of publicly-traded companies is usually to generate profit.
The critical issue here is to become profitable by effectively turning over the capital invested by shareholders.
Around 42% of profits are generally paid in the form of taxes.
The remaining portion, called current profit, is either paid out to the shareholders or carried over as a surplus for the next year.

As you can see, this system makes it hard to spend money on something that would not lead to profit.
The money that can be used for social contributions, such as to fulfill CSR (Corporate Social Responsibility) expectations, at the manager’s discretion is fairly limited in terms of the social system.
However, there are quite a few things that you can do even without spending a lot of money.

We have set up a relatively large solar panel at our factory.
We started incorporating solar energy four years ago with the help of NEDO (New Energy and Industrial Technology Development Organization).
One day in the summer, I realized we were using a good amount of electricity to cool down the solar heat beating down on the company building.
It didn’t make sense to use electric energy to cancel out another source of energy that could be fully utilized.
That is when I saw NEDO’s flyer on converting to solar energy.
In the name of joint research, we obtained assistance from NEDO.
It appears as though we will break-even in a short period of time.
To be honest, there was an undeniable sense of guilt in not taking advantage of the technology that was there.
Just letting the energy beat down on us was anything but a respectable practice of CSR.

Another project we take pride in is the employees’ donations to universities.
Our company’s General Affairs Group carries out the donation process for the employees.
Anyone who would like to make a contribution notifies the General Affairs Group of the Administration Department of the amount for the year and the name of the university to which they wish to donate.
The General Affairs Group contacts the university office to inform them that the employee is interested in making a donation and inquires about the necessary procedures.
Every month, 1/12 of the total donation amount is deducted from the salary, and when it reaches the full amount in 12 months, the company sends the money to the university.
The university directly sends the donor a receipt along with a thank-you note at the end of the year.
The receipt can be used to receive deductions when filing for a tax return.
There are a number of employees that take advantage of the system to make contributions to universities.

I came up with this idea because I felt there was not enough strength in Japanese universities.
I believe this is due to the fact that most university researchers work to please the government.
This is because the Grant-in-Aid for Scientific Research is the primary funding source for Japanese university scientists.
The applications for this national grant are screened by government officials.
The budget allocated for scientific research in Japan is 130 billion yen (1.5 billion dollars) a year.
Although there are quite a few officials in charge of the screening process, the projects they select can be based solely on their preferences and what they believe as beneficial for the time being.
Therefore it is inevitable for universities to lose their autonomy and individuality.
Researchers are humans too; they cannot help but move toward areas of research that would most likely be supported by the government.
I agree that it is only natural that most grants are given to some up-to-date technology with big words.
However, there are many cases, as often seen in history, where technology that no one has ever thought of or technology that has been abandoned can lead to ground-breaking innovation.
The university should directly appeal to its management for support, not to some strangers behind the applications for grant.

It is an unfortunate reality that university management in Japan is largely unreliable.
Very few Japanese universities have the solid structure headed by a chairman with a strong future vision and unyielding philosophy that are shared and supported by trustees.

This is why I believe, just like corporations, the management and executing body should be separated in universities.

If the bulk of the research budget can be covered by donations instead of government grants, universities will start looking to fulfill the interest of the donors, not the government.
The executing body should be selected by the alumni who make up the group of donors.
A qualified individual who has the deep passion to manage the university should be chosen by the donors.
I think it would be wonderful if a university was run by someone that could make it one of a kind.

I am hoping that companies all over Japan will start to actively make donations to universities.
Maybe we will see some changes around the time when total donations exceed 100 billion yen (1.2 billion dollars).
Universities are undeniably one of the driving forces of the country.
Is anyone in the big business circle interested in supporting them?
Even an amount that businesses consider miniscule can help universities tremendously.

March 2012

Author : Susumu Kawaguchi

Chairman & CEO

Nutri Co., Ltd.

Illustrator : Nakajo Junichi