The meaning of our existence is the happiness of all the people involved.

＊This article was originally written in Japanese by our CEO, Yoshihide Arai.

Recently, I’ve been doing a lot of media interviews and speaking engagements, so I’ve been able to get more opportunities to write about my work.

One of the things I often say in various interviews is that a company is a mechanism to make all the people involved happy.

Not so long ago, in business schools in the United States and elsewhere, a stock company was often described as an organization whose purpose was to maximize the interests of its shareholders, and the owners of the stock company were shareholders.

If this phrase is correct, then it means that its working people are trying to increase the interests of shareholders. “If that’s the case, then I don’t want to spend the time of my life doing that”, I frankly thought so when I heard the above description when I was young.

As I gained a little more knowledge and experience, I realized that if we are a company with shareholders, working to maximize the profits of the shareholders will lead to maximizing our own profits. This viewpoint may have a point somewhat.

As I overcame more hardships and gained more experience, I felt that if this is the case, then what is the point of employees who are not shareholders in the future?

It is simple for founders and employees who are shareholders, but what about those who will join in the future not having stocks? For them, it would be the same as when I first thought, “I don’t want to spend my life for that”.

After going through such a thought process the answer that I finally arrived at is this:

A company is a system for making all the people involved happy.

From the time of the East India Company, which was born in the Netherlands in 1600 as the first stock company, the stock company is a system that has maintained an exquisite balance through win-win-win relationships. Merchants in Japan long time ago believed that a good business is one in which both buyers and sellers are satisfied and can also contribute to society in order to gain trust, which is exactly the same spirit of “sampo yoshi”, which in Japanese means win-win-win relationships.

For a modern stock company, the people involved are probably “employees,” “customers,” “shareholders” and “society. Needless to say, partner companies and family members of employees are also involved in the broadest sense of the word.

Even if we increase the number of employees, increase sales, or just expand the business while the people involved are not happy, I doubt the continuity of the company, and I personally doubt the meaning of its existence in the first place.

Rather, I think it’s more meaningful to run a business such as one in which a few people run a great small restaurant with highest level skill, and the people in the neighborhood come to visit every day with pleasure, in the sense that the business realizes happiness of everyone involved.

So why are we taking on the challenge with a high degree of difficulty in realizing it, even though we are listed on the first section of the Tokyo Stock Exchange?

This is just because I thought it would be really cool if we could expand the scope of our work to include much more people involved as a mechanism to make all the people involved happy.

A sushi restaurant that many people frequently visit is great. But people who try to spread such a great sushi culture to the world are also great in their own way. What is important is that the people involved are happy through the business activities and existence. I feel that the broader the scope of its coverage, the more meaningful the organization and its activities are.

I heard that in the Showa era (1926–1989), during the period of rapid economic growth in Japan, there were some such family-oriented corporate organizations. At the time, however, the perspective of customers and employees was too strong, and the concept of achieving shareholder happiness may have been left behind a bit. On the other hand, in recent capitalism, a mindset biased toward maximizing shareholder returns has been prevalent for a long time. The smarter people are, the more deeply they thought it was right.

In recent years, the Business Roundtable (BRT), a group of major U.S. corporate executives, has announced a policy of focusing on all stakeholders, including customers, employees, suppliers, local communities, and shareholders. The world has undoubtedly been forced to go back to the basics.

I feel that the strong interest in the SDGs and the current of the SDGs is a return to the essence of the principles for humanity, and is a close vector to the questioning of the meaning of the corporation.

The world is in a pandemic state due to the new coronavirus, and the economic loss is immeasurable, but in times like these, the leaders of organizations need to do what they can for the happiness of all the people involved.

I don’t know what I can do on my own, but I will do my best to work with my employees to make the world come back to life as quickly as possible.