When a Japanese president steps down, a common next post is kaicho. The title ranks above shacho, and the kaicho usually remains a director. What it means depends on the company. In some, the kaicho keeps representative director status and the final word on strategy and appointments, and the new shacho runs operations under a predecessor who chose them. In others, the kaicho handles external roles, such as business federations, industry bodies and government councils, and leaves management alone. After kaicho, many move on to adviser posts as sodanyaku or komon.
Kaicho is not a statutory office. The person who chairs board meetings, the gicho, is chosen under the articles or by the board. At traditional companies the kaicho often chairs the board, but a growing number of listed companies separate the roles and have an outside director chair the board. Investors and proxy advisers watch the kaicho closely, because a former chief executive who retains power can blunt the board's supervision of the current one. Since 2018 the Tokyo Stock Exchange has asked listed companies to disclose former presidents who stay on as advisers.
In owner-managed companies the kaicho is often the founder or the head of the family, and the title can carry most of the actual control.
What it means for a foreign employer
- Find out where power sits. In a Japanese partner, customer or acquisition target, the kaicho may decide matters the shacho presents. Ask before assuming the president is the decision-maker.
- Kaicho in a subsidiary is a choice with consequences. Giving a retiring Japan head the chairman title keeps relationships, but can confuse authority for their successor. Define the role in writing.
- Senior candidates read the structure. A shacho candidate will want to know whether a kaicho above them still holds the real decisions.
- Do not translate it as non-executive chair. In many Japanese companies the kaicho is an executive, and the English word misleads.
Sources
- Companies Act, Articles 349 and 366 (representative directors and convening the board); kaicho itself is company practice.
- Tokyo Stock Exchange, corporate governance report guidelines on disclosing former presidents serving as advisers (applying from January 2018).