Hiroaki Nakanishi, the businessman who led a transformation of the electrical conglomerate Hitachi and helped to reform Japanese corporate governance, has died of lymphoma at the age of 75.
Nakanishi, who became the most influential Japanese executive of his generation, stepped down suddenly from his role as chair of the Keidanren business federation in May after a recurrence of the disease.
As well as his efforts on governance, Nakanishi played a crucial role in persuading the Keidanren to back Japan’s pledge to achieve carbon neutrality by 2050, despite the group’s longstanding resistance to climate change initiatives.
“I am 100 per cent sure that if the Keidanren chair had not been Mr Nakanishi, that would not have happened,” said Takeshi Niinami, the Suntory chief executive who served with Nakanishi on the government’s economic policy council.
Nakanishi graduated in electrical engineering from the University of Tokyo in 1970 and joined Hitachi the following month. He climbed the ranks from factory manager to head of the European business, until he was dispatched to run a subsidiary in 2007 — the normal consolation prize for missing out on the top job at a Japanese company.
But after Hitachi fell to a loss of ¥787bn in 2009, the worst figures ever recorded by a Japanese manufacturer, Nakanishi and several colleagues were summoned back to the parent group. In 2010, he became president of the company.
Nakanishi then embarked on a transformation that became the textbook approach to reviving a traditional Japanese conglomerate. Hitachi had numerous listed subsidiaries. Nakanishi either sold off or bought out the minority shareholder, transforming the company into a more focused engineering group.
During Nakanishi’s term as president, Hitachi’s operating profit margin rose from 2.3 per cent in 2009 to 6.3 per cent in 2015, the company said. He became chair of the board in 2016.
“What they did in terms of portfolio restructuring was very radical and very effective, so he won a lot of respect from corporate Japan,” said Masako Egawa, a professor of business administration at Hitotsubashi University in Tokyo.
Nakanishi created a western-style board of directors at Hitachi, with a majority of non-executive directors, including women and foreigners. “Unlike many Japanese business people he really appreciated the role of the independent directors,” said Egawa.
In 2018, he became chair of Keidanren, making him the voice of Japanese business. Nakanishi struggled to win round his fellow chief executives on corporate governance but he transformed the way Japan recruited new graduates by scrapping its mandatory hiring season.
“Starting from his reforms to mass graduate recruitment, [Nakanishi] made proposals to improve labour mobility and strengthen Japan’s competitiveness,” said Fujio Mitarai, the chair and chief executive of Canon.
Tatsuo Yasunaga, chair of the trading house Mitsui, said that, as Keidanren chair, Nakanishi had pushed Japan towards digital transformation and decarbonisation.
“I worked closely with Mr Nakanishi and was deeply impressed by his commitment to his duties and to the future of Japan, even while battling illness,” Yasunaga said.
Even when the two business leaders had differences of opinion, said Niinami, Nakanishi was always open to other views and had a cheerful personality that created a constructive environment for discussion.
“He was unconventional and flexible enough to absorb something new,” Niinami said. “We don’t have another Nakanishi. That’s a huge loss to the country.”