Strengthening Cyber Risk Management
ACCJ member Ted Sato shares how his new cybersecurity book, written in collaboration with Keidanren, came about and discusses the issues it addresses.
Keidanren collaboration delivers book with practical advice to corporate leaders
As concern about cyber risk grows in Japan, a new book by veteran American Chamber of Commerce in Japan member and Marsh Japan, Inc. Senior Vice President Ted Sato aims to help corporate management find the most effective approach to mitigating risk and effectively responding to events.
Sato authored the book with Toshinori Kajiura, a member of Keidanren (the Japan Business Federation) and a senior researcher for information and communications technology policy at Hitachi. Kajiura was previously chair of Keidanren’s Working Group on Cybersecurity Enhancement.
🔼 Watch the video above for more insights from Sato himself.
Published in February by the Nikkan Kogyo Shimbun, a Japanese industry newspaper, Strengthening Cyber Risk Management: A Keidanren Handbook to Cyber Risk Management is designed to provide corporate managers with practical guidance for dealing with cyber risk.
Not to be confused with cybersecurity, cyber risk is defined by the US Department of Commerce’s National Institute of Standards and Technology as the “risk of financial loss, operational disruption, or damage from the failure of the digital technologies employed for informational and/or operational functions introduced to a manufacturing system via electronic means from the unauthorized access, use, disclosure, disruption, modification, or destruction of the manufacturing system.”
Sato told The ACCJ Journal that the book, which spans more than 200 pages, was written by professionals from the battlefield in easy-to-understand language. “We wanted corporate managers to be able to ask effective questions at the earliest stages of any cyber risk event. That is very important.”
“We wanted corporate managers to be able to ask effective questions at the earliest stages of any cyber risk event. That is very important.”
The idea came after a series of events last May which Sato conceived with Nikkan Kogyo Shimbun. The well-received sessions showed corporate managers how to deal with cyber risk, not solely as a technical issue but to emphasize management and factors related to organizational culture.
Keidanren had been hosting its own events since 2014, working to change the mind-set of corporate management on this critical issue. The organization built on Sato’s efforts to bring together professionals with similar motivation to create the Cyber Risk Management Japan Study Group, which was a supporting contributor to the book.
These efforts were also supported by the late Hiroaki Nakanishi, who was chair of Hitachi and Keidanren and contributed the foreword.
The book’s core advice draws on a 2014 report by the Internet Security Alliance and the National Association of Corporate Directors’ handbook on cyber risk, which recommends a one-team approach to corporate management. Beginning with the importance of expert advice from outside the company, the book advises an “art of science” approach that balances technology, human factor management, and operational excellence to ensure an organization’s readiness, response and recovery, and recurrence prevention.
The book has been well received by reviewers for its practical guidance.
“It is very meaningful to promote cooperation with experienced US firms at this early stage for Japanese companies,” Sato said. “If all goes well, next we plan to make an English version to share in Asia.”
Member Highlight: Kevin McAuliffe
Newport Ltd. President and 27-year ACCJ member Kevin McAuliffe shares his business experience in Japan.
The Newport Ltd. president and 27-year ACCJ member shares his business experience in Japan
Listen to this story:
What path led you to your current role in Japan?
I had worked for multinationals such as Time Inc. and Reuters in Asia from the mid 1970s to the early 1990s, but always wanted to start my own business. The opportunity finally came in late 1993, when I was asked by Reuters to transfer from Tokyo to the New York office. A former colleague from my Time Inc. days in Hong Kong was looking for an entrepreneur interested in importing and distributing a variety of consumer products in Japan that he sourced from China and other markets. This was prior to Don Quixote, Costco, and the ¥100 stores, so it seemed like a great opportunity. In January 1994, I left Reuters and established Newport Ltd.
What challenges is your company or industry facing?
Initially the issue was capital. I had to use a combination of my own savings and generous payment terms from my merchandise suppliers to get through the first few years. Next, it was competition as the above-named businesses and others entered the low-priced consumer product market. Newport then pivoted to branded goods and enjoyed solid growth for many years. However, during the past two years, we have seen major changes in consumer purchase patterns and are now testing strategies for the new normal.
What inspires you?
We strive for win–win outcomes in all our transactions. Providing opportunity to our customers, suppliers, and staff has been the driving force behind our growth and longevity.
“As a small to medium-sized enterprise, we succeed by innovating and executing well. In the constantly changing consumer products space, we have developed the capability to bring new products to market incredibly fast.”
What issues are important to you and how can you make a difference through your work?
Our company strives to be a sustainable corporation. We have been ISO 14001 certified since 2002. That’s the internationally agreed standard that sets the requirements for an environmental management system. From the beginning, all staff have been involved, and everyone is a member of a team working on a number of social, economic, and environmental goals. In addition, each of our brands is focused on several relevant Sustainable Development Goals set by the United Nations. Making positive impacts in these areas allows employees to find meaning beyond just their normal work responsibilities.
What is unique about your business?
As a small to medium-sized enterprise, we succeed by innovating and executing well. In the constantly changing consumer products space, we have developed the capability to bring new products to market incredibly fast. One example from some years ago is going from an initial supplier meeting to having a product in retail stores in less than five weeks. Though there are risks in being first to market, we use a kaizen cycle to constantly improve our ability to bring the right products to our customers.
How do you define success in Japan?
We can have profits while performing poorly and can lose money while doing a great job, so financial performance on its own is not enough. Success is a moving target, but I just ask, “Did we do our best?”
What advice do you have for someone new to the market?
Japan is a wonderful place to do business. There are plenty of challenges in finding capital, talent, and customers, but there are so many pluses. Years ago, I remember someone telling me that the opportunities in the Japanese market were in just avoiding the elephant’s feet. As long as you didn’t compete directly with the big players, there was lots of space to operate—especially if you were agile and creative. That was 30 years ago. Today, I would say that there are now more elephant feet, but there is still plenty of opportunity in between.
Spectrum of Benefits
After nearly a decade as president and chief executive officer of AIG Japan Holdings KK, American Chamber of Commerce in Japan (ACCJ) member Robert Noddin retired this year. Among his numerous contributions as an ACCJ leader, he served as co-chair of the Education Committee, inspired many as a speaker at the ACCJ-Kansai Women in Business Leadership Series, and played a key role in the formation of the F500 CEO Advisory Council, which he served alongside Jonathan Kindred as one of the first co-chairs. As Noddin retires, The ACCJ Journal talked to him about his experiences with the chamber and why he encourages professionals to get involved.
Former AIG chief Robert Noddin shares what the ACCJ has meant to him
After nearly a decade as president and chief executive officer of AIG Japan Holdings KK, American Chamber of Commerce in Japan (ACCJ) member Robert Noddin retired this year. Among his numerous contributions as an ACCJ leader, he served as co-chair of the Education Committee, inspired many as a speaker at the ACCJ-Kansai Women in Business Leadership Series, and played a key role in the formation of the F500 CEO Advisory Council, which he served alongside Jonathan Kindred as one of the first co-chairs. As Noddin retires, The ACCJ Journal talked to him about his experiences with the chamber and why he encourages professionals to get involved.
How did you come to be part of the ACCJ?
During my second assignment to Japan with AIG (2002–06), I was initially introduced to the ACCJ via the annual fundraising gala, as a guest. I wasn’t in a senior position at the time, and folks such as Don Karnak were at the helm of AIG—so there really wasn’t a place for me. When I returned in 2009, to take on a larger role—first as chief operating officer of the American International Insurance Company, followed shortly afterwards as CEO—it made a lot more sense for me to engage. I started attending informational and exchange events, the Ordinary General Meeting, and things like that. Then in 2012, I moved into the AIG Japan CEO role, and that meant a chance to engage more visibly as the AIG representative to the ACCJ. That’s when things started to get interesting.
Why do you feel the ACCJ is important? Why should professionals become involved?
It doesn’t matter whether you’re the head of a small business in Japan or the CEO of a Fortune 500 company, the ACCJ vigorously tries to be of value to all its members in Japan. Whether issues are industry specific or cut across industries, the chamber is constantly striving to bring value to its members and to enhance the overall competitive environment for US companies—and, frankly, any foreign companies—in Japan.
The ACCJ continuously strives to bring value, working both internally with members as well as externally with local, prefectural, or national governments on issues in Japan, with state, embassy, and federal leadership in the United States, and with external advisors. That’s always been powerfully evident to me.
Why was the formation of the F500 CEO Advisory Council important? What was it like to play a role?
The F500 CEO Advisory Council was created in 2018, and several years before that I was approached at an ACCJ event by then-CEO of IBM Japan Paul Yonamine and Jon Kindred, who at the time was CEO of Morgan Stanley. They wanted to get my views on how to help the chamber persuade the large-company CEOs to become more actively engaged. They were of the view that those CEOs had gradually stepped away from direct engagement while folks such as their corporate or government affairs leaders became more active.
Right after that, I was approached about joining a CEO-led DC Doorknock, the annual visit by ACCJ leaders to Washington. I was intrigued and joined. It really impacted me and, to be perfectly honest, was one of the more interesting and fulfilling things I did during my entire 12-plus years as an AIG leader in Japan. That solidified, in my mind, what Paul and Jon had first mentioned to me, so Jon and I agreed to see if we could get the F500 Advisory Council started. The intent was to ensure that the large-company CEOs help bring support and substance to issues bigger than those of concern to any one company or industry. We felt it would help the ACCJ project a powerful leadership presence in advancing strategic agendas from which all members could benefit.
How have you benefited from the ACCJ?
My personal benefit was having the chance to exchange ideas and experiences with leaders from many industries and of several nationalities. It was incredibly helpful for me to understand challenges and opportunities across the spectrum of foreign businesses in Japan. I was also quite heartened during the Doorknocks to see how much support and interest US government leaders have for US interests in Japan. And, truth be told, I developed some fantastic relationships and friendships that, personally and professionally, really made my life and career in Japan so much more fulfilling.
Anything else you would like to share?
I would encourage members to be active on committees and maximize the chances to learn from, and provide assistance to, other members. I can’t imagine where else you could engage and benefit so richly from people who, on a daily basis, come through the ACCJ doors with the depth of experience and lessons they can share—whether virtually, at a function such as those held at Tokyo American Club, or at the ACCJ office.