About
How our management philosophy evolved ― immediate aftermath of the Recruit scandal
The shares-for-favors Recruit scandal was the starting point of establishing our current Management Philosophy. This page provides information on how the Recruit scandal was perceived within our company at the time and how it has helped us become what we are today.
What was the Recruit scandal?
The Recruit scandal first came to light on June 18, 1988, when it was revealed that shares of a Recruit subsidiary, Recruit Cosmos, had been transferred to the deputy mayor of Kawasaki City shortly before Cosmos went public. The Tokyo District Public Prosecutors' Office prosecuted a total of 12 people, including eight people connected to the Ministry of Labour, the Ministry of Education, political circles, and NTT for taking bribes and four people for offering bribes, all of whom were found guilty.
The lengthy trial associated with the Recruit scandal came to a close on March 4, 2003, with the conviction of Recruit's founder.
The Recruit scandal had a broad impact on society, which we took very seriously. In the wake of the Recruit scandal, we reviewed how we should interact with society and used it as an opportunity to start enhancing our compliance program through such initiatives as re-establishing our Management Philosophy and Code of Ethics as well as developing company regulations.
Re-establishing our management philosophy (1989)
Above all, efforts to drastically revise the operations of our company and our relationship with society in the wake of the Recruit scandal led to development of our Management Philosophy, which details our vision of the social significance, purpose, and future management trajectory of Recruit.
Recruit's Company Creed was first established in 1968. Almost 20 years later, we revised it as our Management Philosophy. Our Management Philosophy below consists of our Corporate Philosophy and Three Management Principles. It was established and announced in June 1989, the year following the Recruit scandal, after almost one year of discussion.
Corporate philosophy (1989)
We are determined to help establish a free, dynamic human community by creating new value through information and continuously working toward harmony with society
Three management principles (1989)
Create new value Respect each individual Contribute to society
Company-wide slogan (announced January 4, 1989)
"Management Philosophy and Code of Ethics" booklet
In the aftermath of the Recruit scandal, we engaged in extensive internal discussion to explore several key questions. We examined whether we had the ability to take a step back and objectively consider how our corporate attitude and activities were viewed by society. We also examined our awareness of the fact that companies are public entities with responsibilities as such.
Before the Recruit scandal, the Three Management Principles that formed our Corporate Creed were: quest for commercial rationality, contributions to society, and respect for individuals.
Of these, we eventually decided to stop using "quest for commercial rationality" and instead adopt "contributions to society (by creating new value through information)." While we understand that the quest for commercial rationality is vital to the existence of a company, this decision was made after examining why we are needed in society and how we can contribute to society following the Recruit scandal.
From the perspective of life planning, we offer new value to the world by pursuing ways to help enrich the heart. We are focused on continuing to be a conscientious, sincere company that is embraced by and consistently moves hand in hand with society.
Even after more than 20 years, our Management Philosophy established in the wake of the Recruit scandal and our subsequently established Code of Ethics both help define the purpose and reason for our existence as a company and provide direction for our business.
Our efforts following the Recruit scandal
The shares-for-favors Recruit scandal was the starting point of establishing our current Management Philosophy. This page provides information on how the Recruit scandal was perceived within our company at the time and how it has helped us become what we are today.
Proposals for transforming our company into a new Recruit
While the Recruit scandal made headlines day and night, we strove to regain the confidence of our clients and society. In an attempt to re-invent ourselves as a company, in December 1988 we asked employees for proposals on how to transform our company into a new Recruit. This was a company-wide effort that involved a wide-ranging call for suggestions from employees.
Amid the harsh reality we faced after the Recruit scandal, this effort reflected our commitment to use it as an opportunity to transform ourselves into a new Recruit by encouraging each employee to confront the situation, think, make suggestions, and take action with a sense of ownership rather than waiting passively based on the assumption that the management team would rectify the situation. All proposals were welcomed, including those concerning new business undertakings and business improvements, provided they were forward looking. The effort represented a key opportunity for employees to demonstrate their own initiative in considering and discussing the future direction of Recruit.
Original announcement asking employees to submit proposals
At a company-wide managers meeting in 1989, we discussed establishing a new Recruit and reaffirmed our commitment to remain firmly aware of our position as a member of society. Additionally, in the process of transforming into a new Recruit, we used our in-house newsletter, round-table discussions, and other forms of communication to share our intentions and thoughts on how to restore public confidence and develop new business.
These proposals for transforming ourselves into a new Recruit still serve as the cornerstone of Recruit's Management Philosophy and Code of Ethics today.
