The Journal The Authority on Global Business in Japan

Charles D. Lake II is a president emeritus of the American Chamber of Commerce in Japan (ACCJ), president of Aflac International, and chairman and representative director of Aflac Life Insurance Japan.

On April 29, the Government of Japan announced that he would be awarded the Order of the Rising Sun, Gold Rays with Neck Ribbon, in the 2018 Spring Conferment of Decorations on Foreign Nationals, for his contributions to the development of Japan’s insurance and financial services industry and to US–Japan relations and friendship.

Created in 1875 by Emperor Meiji and first awarded to non-Japanese in 1981, the Order of the Rising Sun is bestowed upon those who have made distinguished achievements in international relations, promotion of Japanese culture, advancements in their field, development in welfare, or preservation of the environment.

The ACCJ Journal sat down with Lake to learn more about the path that led to this honor and about his views on the US–Japan partnership.

Congratulations on receiving one of Japan’s most prestigious awards. How did you feel when you learned the news?
Of course, I was very honored and humbled. At the same time, I immediately thought that this would not be possible without the support of so many people over the years. I thought the best way to thank all those who have helped me is to keep doing whatever I can to contribute to furthering mutual understanding between the United States and Japan.

Please tell us about your personal journey to this point. How did your background growing up in Japan and beginning your professional career in the United States shape your perspective and prepare you to contribute in ways that led to your receiving this award?
I was born in Charleston, South Carolina, to an American father and Japanese mother. My family moved to Japan when I was three and a half, and we lived with my Japanese grandparents. I attended Japanese elementary and junior high schools and was the only American in my class. Because my parents and grandparents were of the generation that lived through World War II, the subject of US–Japan relations—and the history of what our two countries went through—was a big part of frequent family discussions, including the postwar economic miracle of the 1960s and 1970s.

My family taught me the importance of understanding multiple perspectives and having mutual respect, so it has always been very important to me to try to understand both countries’ histories and cultures. While I am a proud US citizen, I also take tremendous pride in my Japanese roots. Given this background, I recall that, at a very early age, I developed aspirations to want to work in some diplomatic aspect of US–Japan relations, and that took me to law school in Washington, DC.

I went to Washington because I was interested in working in the Office of the United States Trade Representative, which was right in the center of difficult trade negotiations with Japan at a time of heightened bilateral trade tensions in the late 1980s and early 1990s. After government service, I moved to private legal practice in Washington representing US companies.

Then, in 1999, I joined Aflac and transferred to Tokyo, initially to serve as its first in-house counsel within the Japan operations. I then moved to business operations in 2001. I feel very fortunate to be working for a great company that plays a critical role in Japan’s insurance market, and feel privileged to be part of its tremendous growth in Japan. When I became Aflac Japan’s president in 2003, the total revenues were $7.7 billion with 15.2 million policyholders in force and 2,340 employees as of December 2002. In 15 years, the revenues doubled to $15 billion with 24.2 million policy­holders in force and 4,734 employees as of December 2017.

I believe that this award was in recognition of the contri­butions that Aflac has made to the Japanese insurance industry and society in general, going beyond what I have done as an individual.

What lessons have you learned?
Representing the United States as a government negotiator, in private legal practice, or as a business executive, I have always believed that win–win solutions can be found in a principled fashion while maintaining one’s core beliefs. However, such win–win solutions can only be found through fact-based and intellectually honest analysis of the issues that one confronts, and only through creative thinking, hard work, and with mutual respect. I think that I learned this from my family and the many great leaders that I worked with from the United States and Japan throughout my career, as well as through the successes and mistakes of my professional career.

Custom Media Publisher Simon Farrell interviewed Charles Lake for the ACCJ Journal in 2006.

How has the role of the ACCJ changed over the years?
The ACCJ’s role has changed with the times, particularly in terms of how advocacy on business and economic issues is addressed. I think the ACCJ has been tested during times of trade friction in the 1970s and 1980s, and even into the 1990s, and its role has continued to evolve. At times, some in Japan have criticized the ACCJ as a gaiatsu [foreign pressure] organization for aggressively representing US business. By virtue of the role the ACCJ has played working with the US government in providing input on real business issues with the on-the-ground perspective, the ACCJ has been the target of attacks at times from anti-reform sources in Japan. But, over the years, the ACCJ has established its standing in Japan as an organization that provides an important international perspective, a standing that ACCJ leaders noted in the early 2000s as that of a role “inside the castle.”

When I became ACCJ president in 2006, I asked the board to adopt a Japanese slogan, 相利共生 (sori-kyosei; Working together, winning together) and worked to further transform the public perception of the ACCJ and to establish a seat at the table in Japan’s domestic policymaking as a business group consisting of great corporate citizens. We also advocated in Washington for the importance of Japan to US interests in Asia during the era of “Japan-passing.” Today, trade and economic issues are again taking center stage in US politics, as well as between the United States and Japan. The ACCJ can play a critical role in this context to provide its on-the-ground perspective of doing busi­ness in Japan to ensure that US officials are well informed, based on intellectually honest and fact-based analysis, to pro­mote free and open international trade and investment. More than ever, the ACCJ should leverage its “advocacy principles” that the board formally adopted.

What is your assessment of the Government of Japan’s reform efforts that are underway?
I give tremendous credit to Prime Minister Shinzo Abe and Abenomics and the effort that’s been expended over the past five or six years. Before Prime Minister Abe, Japan had gone through an extended period of short-term leaders and annual change of prime ministers. With stable leadership in place, the Abe administration has been able to put forward reforms that have had a substantive and positive impact on the business environment.

In addition to regulatory reform, one key example is corporate governance, which is truly a critical component of creating a positive business environment that contributes to economic growth. The combination of the Stewardship Code, the Corporate Governance Code, the JPX–Nikkei Index 400, among other things, has created the synergistic effect of fostering a positive business environment that is pro-growth. When market-based incentives and disincentives are deployed effectively, they motivate business executives to behave appropriately, to use capital efficiently, to invest for the long term to enhance global competitiveness, and to take rational risks to grow the business profitably. I believe that we are seeing the transformation of many Japanese companies as demonstrated by the fact that the average return on equity of companies listed on the Tokyo Stock Exchange has surpassed 10 percent for the first time since the 1980s.

In the financial regulatory area, Japan’s Financial Services Agency is viewed by most informed observers as a world-class regulator that is playing a critical leadership role in the development of international financial standards and regulatory best practices. The United States and Japan stand together on many critical issues in developing these global standards.

What areas do you see for further cooperation between the United States and Japan?
I believe that the US–Japan alliance is critical to US interests in the Asia–Pacific region. It took more than 70 years to build this complex and important relationship. We must exercise exceptional care to strengthen and deepen it in the coming years. Like many friendships, at times we may have disagreements and friction. But, if we believe in this bilateral relationship, we can work through our issues and find that win–win solution. My hope is that, although this relationship may be challenged from time to time, the peoples of both countries can remember how it is mutually beneficial and strategic and do the hard work to solve problems so that this bilateral relationship is made stronger than ever over the long term.

I remain committed to fostering strong ties between the two countries that I call home and look forward to continuing my work.

Christopher Bryan Jones is Editor-in-Chief of The ACCJ Journal. Originally from Birmingham, Alabama, he has lived in Japan since 1997.
I have always believed that win–win solutions can be found in a principled fashion while maintaining one’s core beliefs.