Newly announced TEPCO directors only complicate perceived mismanagement of Fukushima disaster

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There has been recent unrest in Japan related to TEPCO’s 11 new outside directors, 7 of which will be installed by the central government, but most of whom are seen to have only further distanced the public and the central government

A newly released business plan, drawn up by Tepco and the compensation fund, assumes the Kashiwazaki Kariwa nuclear plant would be gradually restarted after April 2013, and  may need to be revised if the Kashiwazaki plant is not restarted as assumed.

As part of streamlining efforts, the number of board members will be reduced from the current 16 to 11, of which seven will be invited from outside the company. These outside directors will be in charge of the embattled utilities operations.

In Japanese business operations, the outside directors play an important role in choosing who is in what positions, and how the salaries and funds are decided, and essentially a final say in the employment related decisions.

Fumio Sudo

The government plans to select Fumio Sudo, former president of major steelmaker JFE Holdings Inc., as a new board member of Tokyo Electric Power Co., which is set to be placed under state control, government sources said Friday.

Fumio Sudo, 71 years old and consultant at JFE Holdings Inc., and chairman of the Board of Governors of Japan Broadcasting Corp., the nation’s public broadcaster better known as NHK, which may raise serious questions about the past, present, and future neutrality of reporting by NHK.

The Broadcast Law prohibits full-time NHK governors from holding other posts, but that provision does not apply to Sudo, who is a part-time governor.

In 2005, a former employer of Sudo, JEF, cut his salary and that of one other chairman over 50% for 2 months for falsification of data charges after the company announced that a plant had discharged wastewater containing alkaline compounds and cyanide over the legal limits.

A large number of the public in Japan have also voiced their disapproval with NHK’s reporting of the Fukushima disaster, claiming they have been assisting in covering up details of the Fukushima nuclear disaster, and what they perceive as a lack of investigative and timely reporting of critical matters.

Two other outside directors are Mitsubishi Chemical Holdings Corp. President Yoshimitsu Kobayashi, and the Chairman-designate Kazuhiko Shimokobe, a lawyer and chairman of the Nuclear Damage Liability Facilitation Fund.

Possibly the most contentious selection is that of former chairman, president and CEO of GE Japan, and senior deputy president of U.S. conglomerate General Electric Corp., Yoshiaki Fujimori, currently president of JS Group Corp.

Yoshiaki Fujimori (center)

Fujimori is a 22-year GE veteran, who joined GE in 1986 as a business development manager for GE Japan.  In 1990, Fuji was appointed as General Manager Nuclear Business GE Medical Systems in Wisconsin, USA followed by General Manager Global CT in 1993, General Manager Global MR in 1995, and was named Senior Vice President of GE Company in 2001.

The nominations will become effective on the day of TEPCO’s general shareholders’ meeting in late June.

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