MUFG-Morgan Stanley Venture Chief Vows to Erase Harassment
(Bloomberg) -- Saburo Araki said he’s giving a high priority to what he describes as the difficult task of stamping out staff harassment since he took over in April as head of Mitsubishi UFJ Financial Group Inc.’s brokerage venture with Morgan Stanley.
“I have come across several harassment complaints from employees since I arrived,” said Araki, chief executive officer at Mitsubishi UFJ Morgan Stanley Securities Co. “I want to eradicate it, but it will be difficult to root out,” he said in an interview in Tokyo.
Banks worldwide are seeking to burnish reputations tarnished by numerous allegations of wrongdoing since the financial crisis, with Standard Chartered Plc’s Bill Winters among the CEOs who have publicly vowed to clean up the culture. In Japan, awareness of power harassment, known locally as “power hara,” has been increasing due to high-profile sports scandals and rising instances of workplace bullying in a country where respect for authority is prized.
Questions over Mitsubishi UFJ Morgan Stanley’s treatment of staff were raised by a former manager at the equity division who sued the firm and gave press conferences claiming he was treated unfairly after becoming a father. MUFG’s U.S. brokerage unit is also embroiled in litigation with a former equity salesmen who alleges he faced harassment and discrimination before being fired. MUFG denies wrongdoing and is contesting both cases.
In the interview, Araki declined to comment on individual cases but said he’s aware of harassment in the equity division and other departments as well.
Power hara came into the spotlight in Japan earlier this year when a college American football player said his coaches ordered him to make an illegal tackle that injured an opponent. Reported cases of bullying in the workplace jumped to a record 72,067 last year, the Labor Ministry said last week. A third of workers experienced power abuse over the three years to 2017, a ministry survey showed last year.
“We didn’t even have a word for harassment in the past,” Araki, 60, said. “Many employees have gone through the ranks under a sports-jock kind of culture.”
Under Araki, the Tokyo-based joint venture is already taking steps to combat the problem. It conducted a round of training in recent weeks that required attendees to watch a 25-minute video and discuss how to avoid harassment. Employees can also use a hotline to air any concerns confidentially.
The firm will investigate complaints and penalize employees who mistreated others, Araki said, adding that he believes the punishment will act as a deterrent. He will also hold town-hall meetings with employees in 20 locations throughout Japan over the next three months to discuss issues including harassment.
“It’s rare to see a top executive express a commitment to combating harassment,” said Masaomi Kaneko, head of the Workplace Harassment Research Institute and a former Tokyo government official. “But it’s not enough to just do training and impose penalties. Companies need to fix their culture and way of working.”
Mitsubishi UFJ Morgan Stanley is majority-owned by MUFG. It’s one of two securities joint ventures that the firms set up in 2010, two years after Japan’s biggest bank bought more than a fifth of the Wall Street firm during the global financial crisis.
Former equity sales manager Glen Wood began legal action against Mitsubishi UFJ Morgan Stanley in Tokyo last year. The single parent, a Canadian whose son was born in October 2015, said managers denied his requests for paternity leave until he took a DNA test to prove he was the father. He also claims that he was excluded from meetings, calls and overseas trips.
The firm, which fired Wood in April, has said his claims are groundless and damaged its reputation.
Shunsuke Fujii, a former equity salesman at MUFG’s U.S. brokerage unit, filed a complaint in March to a New York court alleging his bosses discriminated against him based on his background as a Japanese-American, according to a court filing.
Fujii, who grew up in the U.S., said he was mocked for not understanding Japanese and fired for escalating his claims of discrimination, the document shows. He is seeking reinstatement and $1.5 million in damages. MUFG Securities Americas Inc. has denied the claims.
Araki is also CEO of MUFG’s securities holding company, which is the parent of both the U.S. unit and the venture with Morgan Stanley.
“I’m very serious” about tackling harassment, he said. “This is not something we can change easily. It will be a long-term effort.”
Another challenge for Araki will be restoring the firm’s reputation in credit markets after the nation’s securities watchdog last week found that an employee manipulated Japanese government bond futures prices. The interview with Araki took place before the Securities and Exchange Surveillance Commission announced its recommendation for a $2 million fine.
Bond issuers including KDDI Corp. have since dropped the firm as an underwriter. Its head of debt capital markets, Haruhiro Ikezaki, said Tuesday that Mitsubishi UFJ Morgan Stanley takes clients’ decisions seriously and will make efforts to restore confidence.
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