EOA Annual Conference 2021 hears of Japan’s ambition to create employee-ownership ‘movement’

The Japan Employee Ownership Association (JEOA) is eager to learn from the “front-runners of employee ownership in the UK” in embedding the model in its country.

Art Hosokawa, chairman of the Japan EOA, who is helping pioneer employee ownership in the Far East nation, attended the EOA Annual Conference 2021 to take on board lessons from attending sessions and networking with delegates during the three-day virtual event.

Art revealed at the conference that he has helped around 20 companies to become employee-owned since establishing the Japan EOA around five years ago – with the initial aim being to get 50 businesses to transition.

The chair of the organisation has submitted a thesis on employee ownership, which is the only thorough study of its kind in Japan, while he has also written a book on the subject. Art now teaches employee ownership at a graduate school in Tokyo, which is the first university or graduate class about this in Japan.

“We’re proceeding and creating a movement steadily, the Japan EOA had to be started from scratch as there was no employee ownership in practice or academically in Japan,” he said. “What we’re starting to do is follow the footsteps of the front-runners of employee ownership in the UK.

“When we look at Japanese culture, it is pretty much a monocultural country. People work on a consensus basis, so I very much think that employee ownership fits with Japanese culture and how companies are set up. I just think that people don’t know about employee ownership.”

Employee ownership growing in Japan one company at a time

Art started by giving advice to companies “one by one” to help them transition to employee ownership and “so far that has been successful”.

He soon discovered that some companies had become semi-employee owned without knowing it, as they didn’t know about employee ownership and its culture, so he has also been advising those businesses.

He added: “There is one case I supported, it was a listed company, a pretty famous one in Japan. Their customers are very much fans of the company, but the CEO said it was having an issue with its staff not liking the company as much as the products they were producing.

“The CEO wanted them to start liking, or even loving the company so they wanted me to turn them employee-owned. Although it’s just at the start, it’s going pretty well.”

Lack of legislation exists in Japan around employee ownership

Art told delegates there are no tax benefits – or “boosters” as he referred to them – to turning employee-owned at this stage in Japan, like those that exist in the UK, but equally revealed that “so far we have faced no obstacles”.

“The Government doesn’t know about employee ownership in Japan, I don’t think they’ve even noticed yet and that is something we would like to work on,” he added.

“We want to put employee ownership into practice first and then go on with the legislative approach and the first goal is to get 50 employee-owned companies in Japan.”

Mixed response to employee ownership in Japan

The Japan EOA chairman is sometimes invited to give lectures or presentations to CEOs and founders about employee ownership.

He says some people react by becoming “quite sceptical, do some digging and think it must be a trap and don’t want to believe”, but that others “go crazy for it, fall in love with employee ownership, grab my book and want to find out more”.

Art continued: “I do find that the character of the company plays a role and determines whether the company is suitable for employee ownership or not, as well as the founder or owner’s intentions.

“We have turned down more than we have helped become employee-owned. One example was an owner who was only interested in cashing his shares and didn’t care about the staff or the sustainability of the company.”

Creating a global footprint of employee ownership

Art was speaking to delegates, EOA board members and Chief Executive Deb Oxley OBE during a networking session at the EOA Conference.

The event also saw delegates from the US and South African attend, with Deb saying: “The Prime Minister here talks about ‘Global Britain’ and this is where we tally with that vision as we have a global footprint with employee ownership spreading to different corners of the world, like Japan, the US, South Africa and Australia.

“It is great to hear that Japan is at the start of the employee ownership movement and to hear Art’s great ambition to drive that forward. The inclusive and collaborative culture in Japan mean it has the right conditions for employee ownership.

“We were delighted to be able to answer questions Art had at the conference and will continue to work closely together in the future.”

Art Hosokawa was sharing his story on Day Three of the virtual EOA Annual Conference 2021, the sessions from which are available on demand for 60 days after the event. To find out more or to register, click here >>

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