In February, Dentsu and others were indicted by Japan authorities on charges related to bid rigging for projects related to the 2020 Olympics. The firm said it would conduct an internal investigation related to the company’s wrongdoing.
Late last week it released a summary of the findings, one of which was that apparently Dentsu has created a culture so obsessed with serving clients that employees have adopted a “results justify everything” attitude, or what the company called “excessive client-first bias.”
Within that culture, breaking the law is apparently no problem if a client’s interests can be advanced.
The company vows to do better in the future including redefining concepts like “client first” and “success.”
And it’s going to work harder on transparency efforts, presumably in a bid to prevent backroom dealings where bribes can be secretly offered in the first place.
It’s also going to consider disciplinary actions for those that take the “client first” mantra too far in the future and also strengthen “risk management” programs.
It’s taking other steps as well.
A rather lengthy quote from the company’s CEO Hiroshi Igarashi bears publishing in full:
“Dentsu is promoting ’Mindset and Behavior Reform’ in the Japan region that will renew the way we approach our work. The purpose of these efforts is to enable us to evolve into a company that is valuable not only to our clients, but also to our employees, society, shareholders, and all other stakeholders in accordance with an ever-changing society that is significantly influencing the rules of competition in business.
I must admit that our approach to work had led to an insufficient awareness of the appropriateness of the methods used due to an excessive focus on achieving our goals. This has resulted in a lack of knowledge and awareness of compliance with laws and regulations, which must take precedence over the achievement of objectives, in addition to insufficient business processes to ensure fair transactions. I also believe that internal checks and monitoring functions to prevent non-compliance were inadequate.
In order for Dentsu to continue to ensure its contributions to society, I believe it is essential to construct a new approach to our work by raising our awareness of our social responsibilities and improving transparency, as well as clarifying the rules and processes that we must follow. The Mindset and Behavior Reform is intended to define and implement a new approach to work that addresses these challenges. With resolute commitment, I will work together with management and employees to implement this reform.”
Really? Sounds like the company basically blew off the rule of law if it interfered with goals and objectives and that the approach is baked into the culture. This is basic right-versus-wrong stuff that kids learn in grade school or earlier from parents.
I’m sure some clients secretly (or otherwise) like being served by an agency with “excessive client-first bias.” My guess is many don’t if it results in illegal or unethical conduct.
Igarashi seems to suggest that it’s time to push the reset button on Dentsu’s culture. As a long-time company veteran I wonder if he is the right person to oversee the effort.