[Last Mile Labor Union] Isn't the biggest management risk Mr. Makoto Watanabe himself? Dangerous management philosophy of a listed company CEO seen from 7 training videos

The Last One Mile Labor Union is continually receiving consultations from multiple union members currently working at Last One Mile Inc. regarding whether the statements and actions of Makoto Watanabe, Representative Director, Chairman and CEO, are appropriate for the representative of a listed company.

This time, seven training videos and transcripts concerning legal affairs, labor relations, human resources, general affairs, accounting, information systems, and sales media, which were conducted by Mr. Makoto Watanabe for employees, have been provided to our labor union by a union member who is a former Last One Mile employee as materials for verifying his statements.

To cut to the chase, since these training videos are accessible internally and their authenticity can be verified by none other than all Last One Mile employees, Makoto Watanabe does not look like an executive to whom one can safely entrust major authority as the representative director of a listed company.

Rather, a serious question arises as to whether the representative director himself is the greatest management risk that Last Mile Inc. needs to manage.

The problem is not the poor choice of words, but the criteria for judgment itself.

In Makoto Watanabe's training sessions, expressions that make one question the dignity of a listed company's representative—such as "idiot," "fool," "very bottom of the ladder," and "useless person"—are repeated as part of the in-house training.

However, the fundamental issue with this document is not the rough choice of words. Even if you remove the harsh language and revise it into polite expressions, the content of the management decisions being explained is itself dangerous.

Across the seven training sessions, Makoto Watanabe does not first raise the question of whether one should obey laws and contracts. Instead, he judges the feasibility of implementation based on criteria such as what the probability of detection is, what the probability of losing a lawsuit is, whether it can withstand an audit, whether the company can pay damages, or whether it will be delisted.

This is different from general risk management.

In corporate management, when there are multiple legal interpretations and legality is not immediately clear, litigation risks and business benefits are sometimes compared. However, this does not mean that actions with a high probability of being prohibited by law or contract can be carried out just by comparing profits and damages and deciding that the company can afford to pay.

Legal department thinking about whether they will get caught, not whether it is legal

During the legal compliance training, Makoto Watanabe highlighted cases where customer lists received from agencies and other sources were resold to other companies without a clear contractual basis permitting such resale.

In this case, the risk of being sued by the original company is less than 1%. In the first place, they won't even find out that you're reselling it.

The core issue here is not whether the resale of the customer list is contractually permitted, but rather the likelihood that the provider will discover the resale and decide to file a lawsuit.

If it's not discovered by the other party, you won't be sued. If the probability of being sued is low, management can swallow that risk and go ahead with it. This mindset shifts compliance from "following the rules" to "calculating the probability of violations being discovered."

Furthermore, Makoto Watanabe stated that even if the legal risk is 30%, 50%, or 90%, they would proceed with the action if the board of directors decides to accept it.

Whether that risk is 30 percent, 50 percent, or 90 percent, if the board says we are swallowing it, we do it. Making that call is the job of management.

A legal risk of 90 percent is not just a minor uncertainty. If the board of directors still decides to proceed on the grounds that a profit is expected and they will assume responsibility, then the legal department ceases to be a unit that stops the company and instead becomes one that simply assigns probabilities to dangerous actions and hands them over to the executives.

Security just to pass audits, not to protect information

The same criteria appear in the information systems training as well.

It's a level of security that can withstand an audit. Conversely, I think there are times when data leaks can still happen even if it passes an audit.

The Systems Department must constantly make security decisions that are right on the edge of compliance yet capable of withstanding an audit, leaning toward business and sales needs.

Passing an information security audit does not guarantee that customer information will never be leaked. That is why companies must not only meet audit requirements, but also implement necessary security management measures by taking into specific account risks such as the nature of the information they hold, attack methods, data theft by employees, outsourced vendors, and system integrations.

However, in Makoto Watanabe's explanation, the bare minimum line required to pass an audit is treated as the standard the company is aiming for.

Furthermore, it explains that management must decide whether to accept the risk—being aware even of the possibility that operators might exfiltrate customer data if USB ports are enabled—and that the information systems department must not simply rule it out by saying it is too dangerous.

The Information Systems Department inherently plays the role of stopping risks that are technically or contractually unacceptable from a professional standpoint. If you command that department, "Don't stop them, just report the probability of a leak," the specialized division becomes no longer a brake protecting safety, but an official reporting the distance to the cliff to the executive pressing the accelerator.

Weaken controls and punish only the employees where accidents occurred.

In the accounting and general affairs training, a policy was presented to significantly increase operational discretion regarding corporate card issuance and purchasing of goods, while reducing the need for prior approval.

Delegating authority to the frontline and reducing small-scale application procedures can in itself be a rational business improvement.

However, Makoto Watanabe explains that while recognizing the possibility that employees might use corporate cards for personal use at restaurants and other places, that is also a risk that management accepts.

There might also be guys in the future who secretly take a credit card and ring it up at some bar without permission. Oh well. We'll swallow that risk as part of doing business.

On the other hand, it states that employees who are found to have used the system for personal purposes may be subject to disciplinary actions such as a pay cut or dismissal.

In other words, it is a structure where management intentionally weakens ex-ante controls and accepts the possibility of fraud, yet places heavy responsibility on individual employees when a problem actually occurs.

If a large number of cards are issued without checking all usage, and only randomly selected people are punished, the outcome will differ between those who are discovered and those who are not, even though they committed the same act.

A system where management designs flawed rules and punishes only the employees who fall into those traps cannot be called fair internal control.

"No disruption to business operations" is not a magic phrase that justifies anything.

In Makoto Watanabe's training sessions, the phrase "no disruption to business operations" is used extremely frequently.

A company won't go under over an accounting discrepancy of 100,000 or 1 million yen. A company won't go under if corporate cards are used for personal expenses to some extent. A company won't go under if a duplicate payment occurs. A company won't go under if the wrong person is hired.

However, whether the company will go bankrupt immediately is not the sole criterion for judging the appropriateness of the conduct.

A discrepancy of one million yen has different meanings depending on whether it was an accidental data entry error, a continuous accounting mistake, or fraudulent expenditure. The personal use of a corporate credit card is not just an issue of the amount involved; it also encompasses problems regarding organizational discipline, fairness, tax processing, and the proper utilization of shareholder assets.

Even if each individual amount is small, if every department accumulates decisions that "a little bit is fine," it will result in a major incident for the company as a whole.

The company says it will take responsibility, but the person themselves is not the one paying.

Makoto Watanabe stated that even if legal issues or accidents occur, management will take responsibility and handle everything.

Even if some trouble occurs, if it increases operating profit, we will take full responsibility for it.

At first glance, it sounds like the powerful statement of an executive who takes responsibility and protects their employees.

However, the ones who actually pay the litigation costs, damages, administrative response, system modifications, customer service, and the losses from diminished trust are not Makoto Watanabe as an individual. It is Last One Mile Co., Ltd.

The company's funds are not the sole property of Makoto Watanabe. They are corporate assets formed by shareholder investments, employee labor, and customer payments.

A manager choosing risky transactions themselves and then using company funds to resolve any resulting problems while calling it "taking responsibility" is obfuscating where responsibility lies.

What he is taking is the initiative in decision-making, while the burden is borne by the shareholders, employees, and customers.

In labor management, you decide the company's convenience first and then "make up the reasons."

During the labor training session, a proposal was presented to delay the initiation of social insurance and employment insurance procedures by about one month in order to reduce the administrative costs associated with employees who leave within a short period.

We could have just delayed the start of the social insurance and employment insurance procedures by a month in the first place.

Furthermore, there are also statements aimed at creating a facade by making the excuse that it takes time to confirm administrative procedures.

We will make up a reason that confirmation is necessary for administrative procedures.

"Just make sure you follow the proper procedures. Just make sure you don't violate the law."

What is serious about this statement is that, rather than checking the statutory notification deadline and considering the most efficient method within that timeframe, the policy to delay the procedure in order to reduce company costs was decided first, and reasons for external consumption were manufactured afterwards.

If the operation is truly lawful and rational, there is no need to "fabricate a reason." It is sufficient to simply explain the actual purpose and legal basis to employees and administrative agencies.

HR pushes organizational problems onto individual employees.

During HR training, while questioning the necessity of conducting employee satisfaction surveys every month, employee emotional changes are described as emotional instability.

Every single month, you change your mind like that? There's no one as emotionally unstable as you.

There is rationality in the discussion to review the survey frequency itself. However, describing changes in employee satisfaction over a short period as personal emotional instability obscures systemic causes within the workplace, such as the work environment, supervisors, workload, evaluations, and harassment.

Furthermore, it also states that the interviewer will bear full responsibility if an employed worker causes trouble after joining the company.

If a hired person causes a problem, the person who interviewed them has to take responsibility. All of it.

Employee behavior after hiring is influenced by training, placement, supervisors, the work environment, evaluation systems, and company culture. Even so, if all future problems are blamed entirely on the individual interviewer, the responsibility of the systems and workplace environment created by management disappears.

We are transforming the administrative department into an organization that does not challenge management.

Through the seven training sessions, the most serious issue is that Makoto Watanabe is attempting to assign a common role to each administrative department of the company.

The legal department does not stop a project by saying it cannot be done because it is illegal or prohibited; it calculates the probability of losing in court. The IT department does not stop a project by saying it is too dangerous to execute; it reports the probability of a data leak. The accounting department does not pursue perfection; it handles the margin of error that the company can withstand.

The Labor Relations Department thinks of ways to reduce procedural costs rather than protecting employees' rights. The General Affairs Department punishes those who are caught rather than preventing fraudulent use. The Human Resources Department shifts the responsibility for problems onto the interviewers rather than improving the work environment.

The department that should serve as a brake to protect the company is being transformed into a subsidiary unit that calculates risks and makes dangerous actions feasible, rather than stopping management's decisions.

Under these circumstances, if Makoto Watanabe makes a wrong decision, who within the company is going to stop him?

As a result of searching for the biggest risk, the Representative Director himself remained.

Makoto Watanabe has asked each department to reduce unnecessary work and identify risks that could harm the company in order to increase the company's operating profit.

That awareness of the issue itself is not wrong. Eliminating meaningless approvals, redundant checks, unused documents, and tasks that have lost their purpose is a necessary job for management.

However, as a result of reviewing the seven training sessions, the biggest risk for Last One Mile Co., Ltd. does not appear to be the workload of the administrative department, erroneous ordering by on-site employees, or the private use of company credit cards.

The Representative Director himself spans legal, accounting, labor, information security, personal data protection, and customer service, establishing company-wide dangerous judgment criteria and attempting to instill them into each department as mandatory training.

If an employee accidentally buys a 10,000-yen mouse, the damage to the company is 10,000 yen. However, if the representative director misunderstands the concepts of compliance and internal control, the decision-making of the entire company will tilt in the same direction.

The damage won't stop at 10,000 or 100,000 yen. It will spread to customer loss, administrative penalties, lawsuits, information leaks, employee resignations, hiring difficulties, stock price declines, and the loss of credibility as a listed company.

Candid evaluation of the Last One Mile Labor Union

The Last One Mile Labor Union does not assert, based solely on this training video, that Makoto Watanabe committed a crime or that all instructions were actually carried out.

It is also possible that some of the content discussed in the training was explained using extreme examples. At the actual implementation stage, it is also possible that the legal, accounting, human resources, and audit departments made corrections and that the hazardous policy was not introduced.

However, if the original video is preserved and the statements as transcribed are used for formal employee training, the following assessment is unavoidable.

Makoto Watanabe appears to be an executive who has a strong tendency to dismiss compliance, internal controls, customer protection, and employee protection—all of which are essential for listed companies—as costs that hinder operating profits.

Furthermore, that mindset was not just a one-off slip of the tongue; it is being taught to multiple administrative departments as a common criterion for judgment.

It is not appropriate to label a person entirely as either a "good person" or a "bad person" in a single word. However, based on the materials presented here, Makoto Watanabe does not appear to be someone to whom shareholders, employees, and customers can safely entrust broad authority, at least not as the representative director of a publicly traded company.

I ask the Board of Directors and the Audit and Supervisory Committee

1. Were the directors and Audit and Supervisory Committee members aware of the seven training videos and the content of the statements?
2. Do you evaluate the criteria presented by Mr. Makoto Watanabe, centered on "probability of detection," "the minimum threshold to withstand an audit," and "whether the company can pay for damages," as appropriate management policies?
3. Were the legal, accounting, labor, general affairs, human resources, and information systems departments in a position to refuse instructions from the Representative Director or report directly to the Board of Directors?
4. Have you investigated which of the policies presented during the training were actually implemented?
5. Will you conduct an investigation involving a third party regarding the resale of customer information, social insurance procedures, company cards, accounting discrepancies, commission pay, document retention, and connection to external systems?
6. Can you explain to shareholders and employees the specific grounds for determining that Mr. Makoto Watanabe remains qualified as Representative Director, Chairman, and CEO?

Should the person who removed the company's brakes be allowed to keep holding the company's steering wheel?

A great executive is not someone who avoids action out of fear of risk. It is someone who takes necessary risks while clearly distinguishing the laws, contracts, ethics, and rights of customers and employees that must never be crossed.

Taking risks is different from thinking it is fine as long as you do not get caught. Reducing management costs is different from hollowing out internal controls. Taking responsibility is different from paying for damages with the company's money.

The management philosophy presented by Makoto Watanabe in the training session seems to emphasize only the power to step on the gas pedal while weakening the brakes of legal affairs, accounting, human resources, and information systems.

And the person who ordered those brakes to be loosened is still at the wheel of the company today.

The biggest management risk that the Board of Directors and the Audit and Supervisory Committee of Last Mile Inc. really need to manage is not minor mistakes made by frontline employees.

Isn't it Makoto Watanabe himself, who is the Representative Director, Chairman, and CEO?