Dentsu plans to reform its corporate culture, which at its heart lies Japan's overwork ethos where employees must commit 100%, to make integrity a priority at the global advertising group.
The company has been working on this since a review found a culture of winning at any cost, that results justify everything, was at least partly to blame for the group facing criminal action in Japan for alleged Olympic contract bid rigging.
And a former employee was indicted for alleged corruption linked to the Tokyo Olympic and Paralympic Games in 2021.
(Dentsu contacted AdNews to point out that "There are two separate Olympic cases (one is bribery and one is bid rigging. Dentsu has not been charged in the bribery case. The nexus to the bribery case is Takahashi san, who left dentsu many years ago, was not an employee during the relevant period.")
And Dentsu also said: "Dentsu Group Inc., not Dentsu, was indicted as the legal entity. Furthermore, the indicted employee does not belong to Dentsu, but to a domestic subsidiary of Dentsu Group Inc."
The Investigation and Review Committee report said Dentsu staff at the sports bureau were said to have “a type of arrogance” that only they had the experience and know-how for leading events to success.
“These pride, arrogance and sense of mission, which were based on their past achievements, are also considered to be a factor that fostered an organisational culture with an excessive ‘client-first’ bias,” the investigation found.
And performance management was 90% based on results.
Oni Jussoku (10 Strict Working Rules), written by a former Dentsu president, has long been considered as a code of conduct for Dentsu employees.
It says: “If you are working on a task, don’t give up; even if it kills you, don’t give up until you have completed your goal ...”
This strict corporate culture was alleged to have led to the suicide of a 24-year-old graduate trainee in 2015, ruled a death by karoshi or overwork.
Now the company has come up with what a reform committee calls “Mindset and Behaviour Reform”.
The goal is to prevent recurrence of “issues stemming from deficiencies or lack of fairness and transparency in the organisational culture, legal and compliance matters, and business processes”.
The program wants to raise awareness of social responsibilities and improve transparency, as well as clarify rules and processes.
The reform committee wants a culture where integrity is prioritised and that everyone learns from failure.
Risk management systems will be strengthened, monitoring stepped up via internal audits and legal/compliance functions implemented to improve the whistleblowing process.
A series of compliance managers will be appointed and the company will "further consider restoration of corporate order" through a "disciplinary" system
Business guidelines (public business guidelines, sports business guidelines, guidelines for the prevention of fraudulent bidding) will be developed.
Dentsu Group CEO Hiroshi Igarashi offered to voluntarily return 100% of his monthly pay for three months this year as part of his commitment to completing the reform. The company accepted the offer.
The investigation found that a culture of “client first” built Dentsu’s current position in the advertising industry by becoming close with its clients.
“While this proactive attitude toward work has become a source of dentsu's competitiveness, it also tends to cause Dentsu into thinking that the results justify everything, and it may also cause employees to have tunnel vision or become short-sighted at work,” the investigation found.
The company is redefining concepts such as "client first" and "success".
And management failures have been identified, including that managers had not sufficiently shown the importance of compliance by taking concrete action.
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