Introduction

In what has escalated into a catastrophic scandal for one of Japan's most recognizable entertainment figures, Masahiro Nakai, a former member of the iconic boy band SMAP, has brought the operations of Fuji Media Holdings to its knees. This turmoil has not only dashed Nakai's 30-year career but has also exposed severe deficiencies in corporate governance at one of Japan's leading television networks.

The Scandal Unfolds

The trouble began when Nakai, aged 52, was accused of sexual assault against a Fuji TV employee, an incident reportedly occurring in June 2023. The details of this scandal emerged from tabloids in December 2024, revealing that it was distressingly “common” for executives to facilitate inappropriate meetings between young female staff and male celebrities. Media reports asserted that Nakai paid a staggering 90 million yen (approximately $777,000) to settle the accusations quietly, a sum that raises eyebrows considering the much lower reparations awarded in similar cases in the past.

Nakai's Response and Retirement

In an early attempt to manage the crisis, Nakai acknowledged “trouble” in a statement on January 9, asserting that with the settlement, he could return to his entertainment roles unscathed. This proved to be a naive assumption as the situation rapidly deteriorated. Nakai officially announced his retirement from show business on January 23, offering apologies for the “trouble and damage” caused.

Corporate Accountability Demands

As public scrutiny intensified, foreign activist shareholders, including Dalton Investments, who hold over 7% of Fuji Media’s stock, demanded accountability from the company. In a sharply-worded letter dated January 14, they warned that failure to act decisively could lead to diminished viewer ratings and loss of sponsors, a prediction that soon became reality as nearly 80 of Japan's leading advertisers, including giants such as Toyota and McDonald's, pulled their promotions from Fuji TV.

Leadership Under Fire

Fuji Media’s leadership, particularly President Koichi Minato, came under fire for their handling of the crisis. A January 17 press conference designed to reassure the public instead intensified backlash, as Minato’s remarks were perceived as evasive. Critics noted that the press conference was restrictive; it excluded most media outlets and denied camera access, creating more suspicion about the company's motives.

Privacy vs. Transparency

Moreover, his justification for keeping the incident from disclosure—aiming to protect the victim's privacy—did little to quell outrage, especially when it was revealed that even the compliance department had not been informed. Accusations of a company culture that favors male stars over the rights and dignity of women surged.

Government Intervention

The fallout escalated further, drawing attention from government authorities as well. Internal Affairs Minister Seiichiro Murakami pressed for a swift independent investigation as various partnerships with institutions and high-profile events, including the upcoming Osaka World Expo, began reevaluating their associations with Fuji TV.

Industry Reactions

In light of the growing dismay, Rising Sun Management issued a stinging follow-up letter, describing the January 17 press conference as a “virtual car crash” and criticizing Fuji TV for not taking the threat seriously. It emphasized the urgency for transparent governance to avoid the perception of a cover-up.

Establishment of Investigative Committee

Responding to the increasing pressure, Fuji Media announced on January 23 that an independent third-party committee, free of company interests, would be established to investigate the scandal. On the same day, Minato held a lengthy closed-door meeting with distressed employees, signalling a desperate move to mend internal relations.

A Broader Reckoning

This scandal has initiated a broader reckoning in Japan's entertainment industry, with other media outlets commencing their investigations into potential misconduct within their ranks. Corporate governance experts have been vocal about the necessity for radical reforms in traditional Japanese boardrooms, which have often prioritized opacity over accountability.

Call for Reforms

Shin Ushijima, president of the Japan Corporate Governance Network, remarked on the dire need for diverse perspectives at the board level, which could have potentially mitigated the mismanagement observed in this crisis. Similarly, Parissa Haghirian, an international management professor, highlighted the urgent need for Japanese corporate culture to align with global standards that no longer tolerate the silence surrounding such egregious behaviors.

Conclusion

As the dust settles, it is clear that this episode could serve as a pivotal moment for Japan's media landscape, pushing for reforms that respect individuals' dignity and instill a culture of accountability, amidst a growing chorus of voices demanding change. The repercussions of Nakai’s scandal are set to resonate far beyond the confines of Fuji Media, potentially altering the course of Japanese entertainment governance for years to come.