FILE PHOTO: Hiromichi Mizuno Government Managing Director and Chief Funding Officer at Authorities Pension Funding Fund in Japan and Co-Chair at International Capital Markets Advisory Council for Milken Institute, speaks in the course of the Milken Institute’s twenty second annual International Convention in Beverly Hills, California, U.S., Could 1, 2019. REUTERS/Mike Blake
July 18, 2021
By Ross Kerber and Makiko Yamazaki
BOSTON/TOKYO (Reuters) -Hiromichi Mizuno’s connections, spanning from the Japanese authorities to Harvard College, made him a guiding voice amongst climate-focused traders worldwide.
Now these ties have positioned his personal conduct underneath scrutiny after an impartial report targeted on Mizuno’s position in alleged collusion between the administration of Toshiba Corp and Japan’s commerce ministry to dam overseas traders from gaining board affect on the conglomerate.
The revelations helped result in the ouster of Toshiba’s chairman final month.
Mizuno stated in a latest interview that he put no strain on Harvard and solely volunteered to assist the endowment perceive how issues labored in Japan. He and authorities officers have challenged the report’s conclusions and stated it doesn’t replicate Mizuno’s account. [nL2N2O503S]
The dispute highlights the stress between the 2 strands of Mizuno’s profession – the champion of sustainable funding and the federal government insider – at a time when overseas shareholders try to guage Japan’s receptivity to abroad funding.
Abby Adlerman, an adviser to company boards and CEO of Boardspan, a supplier of company governance software program, stated it will have been higher if Mizuno had recused himself from the talks at Harvard. “All of this recognition and entry to info means he’s pulled in numerous instructions as to his loyalties and has tasks to many events,” she stated.
The present state of affairs, she stated, is “shuttle diplomacy gone unhealthy.”
Mizuno stated he solely volunteered to assist college officers as part of the Harvard group, the place he was about to begin an educational fellowship.
“I did what I might to assist each Harvard and the Japanese authorities” make knowledgeable choices, he stated.
The report’s description of a robust authorities insider throwing his weight round contrasts with the civic-minded persona that Mizuno cultivated as chief funding officer of Japan’s $1.6 trillion Authorities Pension Funding Fund (GPIF) and burnished as a Tesla Inc director.
Mizuno earned an MBA from Northwestern College and joined the GPIF in 2015 from London-based personal fairness agency Coller Capital.
The put up gave him a platform to grow to be a distinguished voice pushing for contemplating environmental, social and governance (ESG) points in funding choices.
However his strategy brought on friction with individuals involved GPIF would grow to be actively concerned with the Japanese inventory market or push past its enabling laws, in line with a Harvard Enterprise Faculty case research about his efforts.
Mizuno left the GPIF final 12 months however retained his authorities connection as a particular adviser at Japan’s Ministry of Economic system, Commerce and Business (METI), holding the place till being named a United Nations particular envoy on sustainable funding in December.
“He’s obtained a mode which isn’t conventional, and that generally makes individuals uncomfortable. However he’s perceived by the worldwide crowd as an vital champion of ESG practices, and that makes him a hero outdoors of Japan,” stated Alicia Ogawa, who leads a middle targeted on Japanese company governance at Columbia College.
‘SOMEONE WITH CONNECTIONS’
Mizuno’s educational fellowship was at Harvard Enterprise Faculty, distinct from Harvard Administration Co., or HMC, which runs the college’s $41 billion endowment. HMC held a 4% Toshiba stake, one of many single largest chunks of shares, which drew Toshiba’s consideration when it sought to foyer traders in opposition to outdoors director candidates final summer time.
The corporate additionally sought intervention from METI, which might use new overseas funding guidelines to dam the nominees. [L4N2CP1E5]
When that didn’t work and HMC declined to satisfy with Toshiba, METI gave the corporate Mizuno’s identify as “somebody with connections to HMC,” in line with the shareholder-commissioned investigation, performed by three legal professionals.
But Mizuno can be an unlikely messenger to inform a shareholder to again off, having spent years stressing governance points.
He as soon as cautioned on Twitter in opposition to Japan’s overseas funding guidelines, fearful they gave abroad traders “impressions of a setback in company governance or anti-shareholder activism.”
He informed Reuters no person requested him to ship messages to HMC, and that he informed METI Harvard was not an activist however relatively “a really refined long-term investor. I volunteered to speak to Harvard to show my level. METI didn’t cease me.”
Mizuno stated HMC leaders welcomed his enter. HMC officers declined to remark.
Masayoshi Arai, Director-Normal of METI’s Commerce and Info Coverage Bureau, stated that though a METI official gave Mizuno’s identify to Toshiba, “He merely informed Toshiba that Mizuno was being requested by HMC to present recommendation; he by no means stated Toshiba ought to ask Mizuno or METI would ask Mizuno”.
The report discovered that after talks with Mizuno, HMC didn’t vote, an final result useful to Toshiba.
Some analysts say it stays unclear how METI will apply the brand new legislation to overseas traders, and the top of the Tokyo Inventory Change has referred to as for extra element from Toshiba.
Arai stated Japan is open to overseas funding though nationwide safety considerations should take a high precedence.
METI could have been completely happy to depart it to Mizuno to speak to Harvard, stated Ulrike Schaede, a College of California professor following Japanese enterprise, but it surely nonetheless stays unclear how open officers need Japan’s economic system to grow to be.
“The Toshiba case is bringing to the fore the burning concern on the place on this spectrum Japan desires to fall,” Schaede stated.
Mizuno declined to touch upon his views in regards to the new commerce guidelines. However, he stated, he is called somebody who takes “instruction from no person.”
(Reporting by Ross Kerber in Boston and by Makiko Yamazaki in Tokyo; Modifying by David Dolan and Gerry Doyle)