When Akira Matsumoto speaks, investors hang on his every word. And here’s what he tells them: you’re less important than everyone else.
The diminutive 71-year-old can get away with it because of his status in the Japanese business world, where he’s known for his two decades of successfully running big-name companies. At the food group Calbee Inc., for example, Matsumoto almost doubled sales and increased operating profit sixfold in his nine years in charge. The shares tanked when investors heard he was leaving.
But Matsumoto doesn’t share the love, at least on the surface. Stock owners, he says, come only fourth in his list of priorities, after customers, employees and the wider community. Only by ignoring them -- and focusing on the greater good of the company -- can he serve their needs.
“It’s shareholders last,” the charismatic Matsumoto said in an interview in Tokyo. “That’s actually the best thing for them.”
It’s a stance that appears to go against the entire tradition of shareholder capitalism. It’s also also a relatively commonly held view in Japan. Billionaire entrepreneurs Kazuo Inamori, who founded Kyocera Corp., and Shigenobu Nagamori, who started Nidec Corp. in a shed beside his mother’s farmhouse and turned it into a $41 billion company, have both expressed similar opinions, their success as company leaders perhaps allowing them to say what others think.
But in Matsumoto’s case, the sentiment has its roots in the U.S. More specifically, it traces back to the credo of Johnson & Johnson, where Matsumoto worked before he joined Calbee. The health-care company’s statement of values also puts customers first, followed by employees, the community and finally shareholders. “I adhere to this and I’ll never veer from it for as long as I live,” Matsumoto said.
According to the businessman, putting stock owners first has often got companies into trouble.
“Thinking only about shareholders means thinking only about the bottom line and that leads to all kinds of scandals,” he said. “If you really believe shareholders are important, you have to run the company” in the Johnson & Johnson order, he said.
Of course, some shareholders aren’t too happy to be told they’re last in line.
“I’m always getting complaints,” Matsumoto said. But “I’ve never asked shareholders to buy shares. I tell them that this is the policy I operate under. I tell them I really believe in this policy, and if they believe in it too, they should buy shares. If they don’t like it, they can sell.”