The growing #ESG movement (Environmental, Social and Governance) influencing institutional investment decisions and AGM voting intentions is shining the spotlight on the ethical behaviour of corporates around the world – and none more so than the global banking organisations, who are seen by many to have still not atoned for their sins in recklessly causing the 2007/8 financial crash and seemingly getting away with it scot-free.
One such bank is the Japanese Sumitomo Mitsui Banking Corporation (SMBC) Group – a multinational banking and financial services institution which operates in 40 countries and is the 14th biggest bank in the world by total assets – the second largest bank in Japan.
Michael Woodford, in his book, Exposure: Inside the Olympus Scandal, has detailed the cultural difficulties in Japan which make effective Corporate Governance challenging, precisely because of the lack of independent challenge from Non-Executive Directors in the boardroom, and the story of Sumitomo and its treatment of the family of one of its most senior employees is another example of corporate intransigence, stubbornness and downright unethical behaviour.
Mr Akihisa Yukawa (Aki to family and friends) was managing director of Sumitomo Financial Group when he died on a business trip at the age of 56 on August 12, 1985.
Akihisa’s grandfather, Kankichi Yukawa, was one of the founding directors of Sumitomo when it was incorporated in 1912, so the family shared a long history with the Bank.
Akihisa Yukawa graduated from Tokyo University’s School of Economics and joined Sumitomo Bank in April 1952. He worked in international banking and was the head of the London Branch from 1976 to 1980. Akihisa was appointed Managing Director and Head of the International Office of Sumitomo Bank in 1981.
In 1984 he was offered the position as chairman of the World Bank in Washington but declined and instead accepted a new role to build the aircraft leasing arm of Sumitomo Bank and became Executive Vice President of the Bank’s leasing subsidiary, Sumitomo Leasing and Finance, where he lead the negotiations to provide the financing for Japanese Airlines (JAL) purchase of 9 aircraft from Boeing – the largest aircraft leasing deal in Japan at the time.
Tragically, Akihisa Yukawa was killed on a business trip from Tokyo to Osaka when Japan Airlines 123 Boeing 747 crashed on 12 August 1985, taking the lives of 520 passengers and cabin crew – still today the worst accident in aviation history.
After the accident, the bereaved family members of those killed in the crash were all compensated by Japan Airlines and their employers, if they were flying on business, for their tragic loss – all that is except two – Aki’s daughter and his partner, who at the time was 9 month’s pregnant with Aki’s second daughter.
Why were they not included amongst the bereaved? – because the Sumitomo Chairman, Ichiro Isoda, decided they were ‘not the bereaved’ and they were not allowed to make any claim for compensation to the bank or the airline.
Notwithstanding the fact that Ichiro Isoda later resigned from his position as Chairman of Sumitomo Bank after taking responsibility for one of the biggest financial scandals in Japan, the nature of Japanese culture with regard to Corporate Governance meant that having made his decision about the fate of Aki’s partner and his two daughters, that decision was final and can seemingly never be reversed.
Aki’s partner, Susanne Bayly-Yukawa, is made of sterner stuff, however, and has fought tirelessly for recognition, more than compensation, of her status and that of her two daughters to be recognised alongside all the others as the bereaved.
Her first success came in 2001, 16 years after the crash, when her persistence paid off and she managed to persuade Japan Airlines to make a token contribution to her daughters’ education – a small victory but an important step in her fight against Japanese bureaucracy
In 2012, Susanne managed to achieve the impossible – the Japanese government made the unprecedented decision to make a posthumous amendment to Akihisa’s important family record, including Susanne and their children as his family.
With a new Chairman having replaced the disgraced and deceased Ichiro Isoda at Sumitomo, this would have been the ideal time for the bank to have a change of heart and recognise the family of one of their most senior employees, Akihisa Yukawa.
But no, Sumitomo still refuse to recognise both British and Japanese proof of Akihisa’s family identity.
So the question remains – how can we hold a powerful global bank to account?