The Interview with William Dawkins

(London, 11 August 2006)

[I: the researcher, S: William Dawkins]

I) Your career started at the Westminster Press covering the issues of financial and business area?

S) No, I was a general reporter, covering the local events. That is the things like a crime, clashes, social events, local ***** [unclear - SE] weddings (laughter)

I) and you switch your career in the Financial Times.

S)Yes.

I) In 1983, you started to cover the business issues.

S)Correct.

I) And you quit the job, I mean the journalist job in 2004.

S)That’s right, yes. Two years ago now.

I) You have almost twenty-five-year carrer as a journalist.

S) Yes.

I) Can I ask why you decided to leave a job as a journalist?

S)Oh I see. Because I have got an offer of the very interesting job, being a head hunter.

I) It’s not because… you just feel cynical to the job as a journalist.

S) No, not at all. I had a wonderful career as a journalist. It’s a great job.

I) How do you feel about the current situation of the business/financial journalism in general, as a reader an audience of that kind of journalism? How do you evaluate the current the Financial Times reporting or other financial media’s reporting such as Bloomberg and Reuters in general?

S) I suppose the value of basic news has become much less in recent years, because good quality news is available in real time, anywhere at low cost.

I) Like the Internet?

S) Exactly, the Internet, local radio, television. So…on the other hand, the value of analysis is much greater than it was. We do business in the world where…, the major companies are competing with each other with access to the same information, everybody, the same technology, and the finance with the same cost, which means, the best way for that getting to competitive can differentiate from the rivals is to be able to foretell the future, that means, being able to interpret the data or all around.

I) The audience tends to… in a sense, be confused, because the information is overloaded. The journalists have a role to classify or analyse what is happening…

S) To interpret. Yes. To shine the light through the storm.

I) Make the road clearer.

S) Yes. We know… we have…access to more information that our parents did, but we are not as wise as them. And it’s the job of journalism, talking about the serious business journalism, to add the wisdom. So, that is what the role of serious business journalism should be. Overall market… for newspapers is fragmenting. There is much less…there is less room now for promptable business providing general news than they used to be. Newspapers are responding in two ways…there are, no, three ways. Newspapers are responding becoming niche players. So the serious newspapers are moving up market, the down market newspapers in this country are moving further down market.

I) Like the tabloids?

S) That’s right. They, the British tabloids… I don’t know it’s the same thing in Japan, tend to specify much micro entertainment journalism. They do not offer the truth. They offer gossip, rumour, excitement, sex, thrills…

I) It is almost similar with Japanese tabloids.

S) Yes. I mean, this is the newspapers. This is the new kind of journalism. It’s not the journalism that anybody from Nikkei will recognise as a rep of the journalism. I don’t I detest it completely *****. That wouldn’t work. Rather I have thrown it away in that area. The British newspaper in this period is special because…as unique in the world, I think, because it’s…the top quality papers are among the very best in the world. And it’s…low market newspapers are among the worst in the world. In this country, you will find the best and the worst journalism side by side. So it’s a wonderful place to study journalism.

I) Yes. I am very happy so far to study here (laughter). So have you ever seen the problems in business/financial journalism? I have talked to journalists in this area, and they sometimes complain about the routines to fill in the pages. They have a pressure to fill in the pages so they need to collect the information all the time, and the editors require filling in the pages even if they don’t have the information to write. The thing is, they tend to ask the news sources like “do you have any news?” or “recently what is happening in your company?” To be honest, they feel it’s kind of not so newsworthy, but on the other hand they need to fill in. That’s why they write the articles. Some say routines make them frustrated, or wonder “it is not newsworthy but I need to fill in so that is why I write” or something. Did you feel the same way when you were in the Financial Times or have you ever seen that kind of less newsworthy information put on the newspapers?

S) No, not on the FT. In the FT, we have far more news to put in the paper than space to carry. So what we serve to the job was to filter and profile the news for the print version of the newspaper. And then use the websites to carry all the materials that ***** the newspaper. For example, we used to do we would… everybody had an interview with the prime minister of Japan, we’ve carried short version of the interview in the newspaper, say, a thousand words and then have the full text on the website.

I) Talks about the relation with China on the paper, and may be other domestic issues can be read on the website.

S) Absolutely. So the key problem facing the serious newspaper is not at all to find the news to fill the pages. The problem is the other way around. It’s to decide what to filter out. Your readers are paying you to decide for them what is important to know in the world. You are not being paid to throw stories onto the page.

I) So in a sense, the problem is about how to use their criteria to choose the news?

S) That’s right.

I) Another journalist told me that recently the audience is getting much smarter than ever, so they just want the media to report the accurate information. They don’t need any kind of deep insights or opinions, they just need the information quickly…as quickly as possible, and they can judge by themselves.

S) Yes. The first part of that is true, and the second part is not. It is true that the readers are smarter these days, and require accurate information, that means if they judge it’s much easier for them now to go elsewhere for accurate information. If they are not satisfied with what they’re reading in the Nikkei, it’s much easier than it used to be for them to go and get them somewhere else…

I) Put the word in the Google…

S) Exactly. It makes much more important ***** the serious newspapers rather than Nikkei to be accurate because you lose your readers much more easily now than it would be the case fifteen years ago.

I) Sad to say some corruption happens…

S) Yes. It is not true. Yes the readers are smarter, but it is absolutely not true that readers have no… don’t need analysis. Because of what you are saying before, because of our modern world, we have too much of data and not enough wisdom. We are so surrounded by ***** facts but we don’t know where we are going.

I) As you said, it is necessary to have kind of a light to make the road clear.

S) Yes.

I) Actually, that comment I mention comes from the journalist working for a magazine. He said to me that if they have the feature stories about the ranking of… kind of… for example… the quality of the bank service. With having that kind of ranking, easy to appeal the ordinary readers. If he does not have that kind of ranking system and just write about the analysis features, the sales is obviously smaller than the ranking type. So that is why he explained to me that way.

S) Right, okay.

I) What do you think about the recent journalists? Should learn or study more? On the other hand, journalists tend to be lacking knowledge. That causes a problem. What do you think about this point? Do you think that they need to learn the business or the related law more to be a journalist?

S) A good business journalist now needs to be more skills than the people in my generation keeping the business journalists. I wouldn’t hire myself ***** (laughter). I would think the most useful to study economics and politics to be able to understand trends in the global… in the national and global economies, and also understand how people can shape the world… nations that what the politics is about. Used to be the case you forget to include the jobs as the journalists with ***** short hand, and being able to turn out the ***** story. Well, it’s the premium knowledge on journalists who do more than turn out the ***** story but all same ***** interpretation then they are going to have a good general education in economics and business.

I) Have you ever seen any kinds of problem like journalists tend to be manipulated because of the lack of the knowledge?

S) Yes, all the time.

I) To think of my case, Nikkei, it is absolutely up to individuals to learn something by themselves. There is no study group or education system in a certain area of the market, financial law, how to read the balance sheet, or something like that.

S) It is critical for serious newspapers to train their journalists properly. The Nikkei ’s readers are among the most intelligent people in Japan. And if they sense your stories are of low quality, they will leave and the Nikkei will collapse. It’s critical that you are properly trained.

I) I heard that the Financial Time s provides some kind of training program for the journalists.

S) The FT invests a huge amount on training. They sent me to business school in Seattle in order to learn management. When I went to Japan, I stopped to work for four months to try to learn the language.

I) To understand what they are talking about?

S) Exactly. This is normal. They teach journalists accountancy, financial reporting, balance sheets. The FT puts a huge amount of money into training its journalists and raising their intellectual standard all the time because that is the future of their journalism.

I) And it is a very critical thing. That is totally different from Nikkei, I think. You said that all the time you found the problems are lack of knowledge. Can you give me any examples you can think of?

S) It’s a constant risk. Junior and inexpert reporter will fail to understand the story because they will simply write down what they hear from the experts and be unable to exercise their own judgement. And that way, it is very important to do two things they must be trained. While they are growing up, their stories need to be scrutinised by the expert editors who will spot the problems and inadequacies before they published it in the newspaper.

I) So individually, they need to be trained, and also the articles need to be scrutinised by the experienced expert editors.

S) In a well functioning news where the editor commissions of the article, he will believe the reporter, so well enough, so the reporters set the sort of white line if it inquires to start up with, and then the article comes in, that say the editor will scrutinise it critically and hold the reporter to count, ring it and say “what do you mean by this?”, and “this article could be improved in the following ways, so please do so”.

I) And another journalist mentions the example. He covers the biotechnological medicine area. He got the information from the news sources like company A developed the medicine for a cancer or AIDS or something like… when he got that kind of information, he thought “oh, this is the big news”, but the editor said “we are not sure that the medicine can be authorised and go to the public or can be available for citizens to get that kind of medicine”. So the editor kicked out the information and told him not to write. He was personally frustrated with that decision. It always happen the conflicts between editors and journalists. In this case, what is your opinion? The journalist should persuade the editor or the editor’s decision was right?

S) They are both journalists, okay? Editors are journalists, too. In this case, the reporter should well enough informed to make the case for the story. Reporter should be the expert. He should tell the editor. You have to make the argument. The story is important for the following three reasons. You should sell or inform and the editor might say “Okay, I understand your following three reasons and they are correct. But I still think your story is not important because we’ve got something else which is more important”. But it shouldn’t be the questions of the foundation of the story. What the editor should do is assess the relative merit of the story. We get everything of what is going on the world at the time and the journalist should be good enough and the reporter should be good enough to give the story that is basically right. Something seriously wrong in the newsroom is the editor questionning the fundamentals of the story. You will find out that all three points which we thought made it important are wrong. And any gonna serious problem. It is okay if the editor says “I disagree with the story that is important not because there is wrong in the story, but because there is story B will be here which casts yours into the shade, that is going to top of the page.

I) For example, the Financial Times has much more information, so it is easy to fill in the pages. In a sense, the editors can choose the information which is valuable and more newsworthy.

S) Yes. Absolutely. That choice is very hard to make because there are all kinds of things which can…all kinds of challenges the editor has to meet and that choice the first is… it is very easy to… give too much of the important to the story because it comes from one of your best writers. Or… it’s very easy to… ignore… a small development which might be a part of our trend. It’s very hard for a good editor to spot the stories for representing the beginning of the trend. It’s very hard to make connections that they could be stories that are related to each other, or be put together. Or tell different corners of other story. It’s very easy to… follow the crowd. One problem is that you’ve got the big story like the terrorist threat in London yesterday, you think to yourself and “well, everybody else is going to put that on the front page, so I will, too” (laughter). You have the courage to say, “Oh, we have got something even more important” or “Oh Will, do it in the different way” you know, “okay, let’s take that sense sort of terrorist or something that send it, should go on and move the front page” but every newspaper should treat it in its own way.

I) The Financial Times will talk about the financial or economic impact of the incident…

S) The case of the Financial Times is very hard to get.. again, to get a right balance to the economic impact and the fact as an important story in human terms, you know. It could be…um… you know… it would be very easier, very bad for the Financial Times to write a story that says something like “airline shares went down yesterday because of the terrorist threat”. That’s too financial (laughter).

I) Yes, yes. Maybe…the Financial Times will write that kind of stories?

S) That certainly gives you an angle, yes.

I) The role of the business/financial journalism sometimes, they need to focus on the economical impact or the influence on the stock market…

S) Business journalism should look for the big picture. It should look…business journalism should not be just about the finance and business. It should explain how business and society affect each other. It should place business in the context of society. If you fail to do that, if you are too financial, then you just become your stock market newspaper. For the problem, business newspaper does what business does which is, ***** how financial business event affect the way people behave, how they affect markets. Covering Japan for example, two thirds of Japanese GDP is consumer spending. To understand the Japanese economy is pretty important to understand how the Japanese public feels, how do the Japanese public ***** with earthquakes, educations, weather, politics, fashions, all things come together.

I) Only writing about the data cannot see the society, so it needs to ask or interview the ordinary people about how they feel about the economic situation in reality compared with data. Data indicates the recovery of Japanese economy, on the other hand, people don’t feel the same way, or something like that.

S) Yes. We look for the evidence people behave I mean, I am not saying you should put the kind of a poll of shopper in Ginza on front page. You should be able to write, when you write about the Tankan, you should be able to throw it in the evidence of how consumer is behaving. It might be the financial results of the consumer companies, it might be…I don’t know…some new trends fashion. Look out for the whole picture.

I) In your experience, from 1983 to 1984, you covered UK companies, so you interviewed management teams about their strategies and business.

S) Yes.

I) What was your criteria to choose the news?

S) Oh I see. I was covering quite a few companies. Anything with the listing of the London Stock market. That was very simple. You covered the results or takeovers.

I) Did you enjoy at that time?

S) Yes.

I) Did you feel yourself or your job as just reporting from left side to right side, or that kind of feeling?

S) No, it was not just reporting in those days; great deal of analysis and interpretation was involved trying to… we were about ***** write articles of assessing the companies, strategy whether the share prices was over valued or not, so gave you the fascinating insight how to value the companies and… how to praise the performance of theit management.

I) What was the news for you at that time?

S) It was extremely simple, it was well defined. We had population of the companies we simply have to write about. It was a part of the service that the readers of the FT expected. Every company in the top 100 on the stock exchange needed if you expect to see reported on

I) What kind of strategies they have, or that kind of things you covered.

S) That’s right.

I) Did you write about the strategy like Merger and Acquisition as a scoop? Was it possible for you to do that?

S) To get scoops?

I) Yes.

S) Very difficult.

I) From your experience, can you give me your definition of the scoop in the business/financial journalism?

S) Right, scoops (laughter)… well, there are two kinds of scoops that is a genuine news scoop which is a major event with significant impact on the world and which is only ***** to a few people, or there is a scoop of interpretation which is spotting a small event which apparently doesn’t mean anything very much and explaining that it does mean a lot (laughter). Sign of the trend, you know.

I) Merger and Acquisition, or promotion or resignation of the executive teams, or that kind of things. Can I interpretate them as scoops?

S) Yes, they are very rare. The FT was quite good to be getting them.

I) Did you get that kind of scoops as well?

S) Yes.

I) I know it’s difficult to get that kind of scoops. How can you get that kind of scoops?

S) It’s been building the trust with your sources.

I) Sometimes, people tend to say, “because of the insider dealing or other regulations, the stock market regulations, I can’t say anything to you and please wait for the announcement”. It always happens in the business/financial journalism in general, but you could get the scoops because of building the trust with your news sources.

S) Yes.

I) How did you build the trust with sources?

S) It’s a long term relationship with them…with the sources. You establish your relationship with them. When they continue [to send] lots of information confidentially and you don’t report it. You know I tell you something as your background knowledge on condition if you do not report it, then if you demonstrate to them you could be trusted that way and then I trust you again.

I) That kind of accumulation creates kind of mutual understanding each other and building the trust.

S) That’s right. One of my colleagues contacted a scoop on Exxon taking over Mobile on that basis of building up the relationship and trust with the banks. On the day, the two companies were ready to announce the takeover. The FT has been given so much, a lot of information. It is already written the articles that have done the analysis written thousands of words, then as soon as the companies were ready to go they could put it in the newspaper appeared ***** the morning, they announced the takeover. Twenty four hours ahead of any other newspaper because it was reported on the morning after that.

I) A beautiful scoop.

S) A beautiful scoop. Very nicely timed, you see, because it didn’t contradict any stock exchange rules on disclosure information or insider dealing. The information came out with the FT at the same time with it came out all other investors, but well ahead about other newspapers. And you know, when I was in Japan, I thought I had the trust relationship with the vice finance minister who would tell me about his thoughts on dollar-yen relationship. He would ring me up every month, and what I would do is I would write down exactly what we said and report exactly what he said. And after I had done once, he was happy to do it again.

I) Because he thought…

S) You could trust. Yes. Big fear was being misquoted by foreign newspapers. Quite easy to happen.

I) Japanese newspapers misunderstood his comments or something…

S) No, Japanese newspapers were good and he trusted them, too, but he needed to talk to yen-dollar investors in London and New York. They are not published there.

I) Oh I see. Sakakibara?

S) Yes.

I) I covered once in 2001, always asking him about the currency situation.

S) Sakakibara, a good man.

I) Can I have your experience and example of the scoops? Most memorable, successful…

S) Yes… I think it was…when the European Commission had launched a ***** rate the British Steel for price fixing with the risk of ***** twenty per cent turn over.

I) When was it?

S) That was in 1987, I think. I had an exclusive on that. When the French government was planning to launch the restructuring of its semi-conductor industry, the French industry minister gave me the scoop on that before French press.

I) Kind of a big story, a global issue…

S) Yes.

I) I am working for Nikkei and the news sources evaluate that Nikkei has a value or reputation in the business society, so they approach me with leaking some information. “If I decide to do something, I will tell you” or that kind of talk. They sometimes leak the information. On the other hand, I am just feeling like why he starts telling me. He may have some trust, but on the other hand he may have an intention to manipulate or control or deliver the message to the public. So, what is your tactic not to be manipulated by the news sources through leaking information?

S) To do your homework. To know the story and all the background very well. so you know when you are being abused when you are being lying to you, you can spot a lie. If you are receiving a scoop as a reporter, you should be able to answer the question. The question to yourself. “Why am I been told this?” You should also be able to answer to the question, “am I being lying to?”

I) Yes. You did the self-examining before you wrote those scoops.

S) Yes. I can give you the examples where I was given bad scoops, where I was told only half of the truth, sometimes a lie.

I) Have you ever experienced to write bad scoops?

S) No.

I) Okay. People sometimes say that they need to have two or three sources, independent sources. If the only one source gives the information, the editor cannot trust what the journalist says. Some journalists are asked to collect another source who says the same things, they can start writing. This may be one of the tactics or strategies to protect the journalists from the manipulation of the news sources. Do you have the same way to have several kinds of news sources?

S) Yes, I mean, you have to use the common sense. It depends on who is the source. Normally, if the information is new or in question, you should have at least two other sources. If the information involves other parties, you should talk to the other party. You know, if there is one company taking over another, you have to talk to both companies.

I) In that case, company A sometimes leaks to the journalist about “I am going to buy company B”, and the journalist goes to company B.

S) Yes.

I) A and B has a kind of confidential negotiation. In the middle of the confidential negotiation, if the journalist says “are you keeping in touch with company A?”, B may feel like “How did you get that kind of information? This is the confidential, so the information was leaked by company A”…

S) You have to pay with complete owner, and discuss. Company A tells you “I am taking over company B” then you say “Can I go and talk to company B about it?” (laughter)

I) That’s very reasonable.

S) And they say no, then you don’t. And then you say “Well, do you want me to publish the story or not?” and they say “Yes we do”. And you say “Well, I cannot publish this story unless I have talked to company B ‘what are you going to do about it?’”

I) Okay, in a sense, to take the permission is important of the news sources like “Can I write it right now?” or “I am going to write it some day, so when is the best?” or that kind of the negotiation is necessary.

S) Yes.You can do it within the limits. You have to be independent, but you’ve got to behave with complete integrity. The rule I apply is… do you have children?

I) No, I am single.

S) Imagine you are going to explain to your father or your mother what you looked down, would you feel happy about it? If you don’t feel happy, then something is wrong. Or if the way you behave was reported in your own newspaper, I reported a takeover company A to company B in the following way, you know, I didn’t talk to anybody, I didn’t check. Would you be happy about it? The answer is no, then don’t do it (laughter).

I) In your experience of the European Commission case, so you’ve got the information from…

S) I got it from the European Commissioner for the industry, the competitions were there. They told me they lost the rate British Steel price fixing, so who did I ring next? British Steel. I said “I’ve just been told by the European Commission you’ve been rated for price fixing in you’re running cartel”.

I) You went both.

S) Yes.

I) You performed very carefully not to change the situation, not affect

S) No, no. Pick up the all information available and you need to be fast, of course, because if you are working on the scoop, everytime you ask somebody question, you release the information. As soon as you start asking questions, you lose confidentiality and you lose secrecy. You have to be doing this really fast, get it into the paper quickly before anybody else write down about it.

I) Competition exists, and on the other hand need to collect the information secretly...

S) Yes, you need to get around. It’s the scoop which is going to come out before anybody else. French industry story, for example, that was breaking as I was being told that you are the people ***** on the story building without, so I had a talk to half a dozen of very senior people get their response to really fast get it in the paper. What I did is I send all those story and I thought, when I’ve got it and thought story was really amazing, so went back to my original source who was the industry minister of France at that time, told him what I am planning to write and say “Look, do you really mean this? How would you feel if it exists in the newspaper tomorrow? Do you really want me to publish this?” Then he said, “Yes, go ahead”, and… we’ve got it. There is nothing worse publishing the scoop, and then you pick up the Nikkei and read it. “Shit, ***** are really mean to” (laughter). You’ve got to be really confident, ***** comes from the experiences is good for all the journalists to do it. You have to be very careful, very fast and very professional.

I) To be honest, I am just covering the venture business right now in Japan. The venture business, the start-up business, which already went to the public. They open their stocks, and I talk to the venture business executives. They always open to us because the Nikkei is the only one to cover their business on daily basis, so I can get the information of their

Strategies, their plan to Merger and Acquisition and that kind of information can get before the announcement. I can write as a scoop “company A is under the negotiation with company B”. And after publishing that kind of the articles, the stock price of the company A or B is getting higher, increasing, or sometimes decreasing. The articles affect the market by the articles. I was feeling like am I contributing to their stock prices higher by writing the articles…

S) No, you are just the part of the market. You are the part of the market.

I) That kind of things is not like the journalist job, so basically that kind of experience brings me to study the journalism. In reality to be honest, it sometimes happens in Japan, and what about this country?

S) Yes, a lot.

I) By writing the articles, and then the stock prices…just contribute to the

S) You’re publishing information that is going to be published anyway. It’s not the newspaper. It is not driving the stock prices up. Good business press is the part of the market where distributing the information.

I) So, it’s not a bad thing to be a participant of the market or contribute to the market.

S) That’s a very good thing because it improves the quality of the market. Good business press is a part of good market economy. The Nikkei is the important part of Japan’s financial system. Policy information and corporate **** would be hard to get somewhere else.

I) Apart from the stock price, what do you think about just writing some companies’ strategy or company news, that means kind of free advertisement, or giving the creadibility or reliability of the company under the name of the Financial Times or Nikkei? Putting the article about the company, does that mean giving some credibility of the business? Have you ever thought that kind of things?

S) Oh yes. It’s a constant danger. You have to exercise your independent judgement as a journalist to give the credibility only to the credible companies.

I) Journalists need to have independent mind and judgement, and sometimes kick out the information because it is not newsworthy.

S) Yes, that’s right.

I) As your experience, what is your criteria to judge the information as the newsworthy information? You may have some kind of the criteria of the judgement.

S) What is news? (laughter)

I) Yes, that kind of things.

S) Well, it’s got to be interesting value to your readers, so…it’s Nihon Keizai Shimbun or the FT, ithas got to be economic, or financial or business consequence.

I) Did you think that your audience were economical groups, investors, businessmen, or that kind of people?

S) For the Financial Times?

I) Yes, for the Financial Times.

S) It was market operators, financiers, business people, government figures, public sector and academia.

I) Did you feel that you just contribute to the wealthy people or “elites”, so called?

S) Yes.

I) Just writing for that kind of people.

S) Yes. We are writing for people who influence the world. Definitely writing for the elite, business elite. The Financial Times is not the general newspaper.

I) Yes, correct. According to the journalism theory, the journalist should be one to take the voiceless people’s voice. That’s one of the role of the media.

S) Not the business newspaper. Not the business press. The business press is to help business people and financial people make judgements, understand what this world ***** It’s not the voice of the people, not at all.

I) Not for the person who has no voice.

S) No, no. So the people with *****.

I) In that sense, the business journalism is totally different from other type of journalism.

S) It is. Very different.

I) At this point, how do you feel about it? Is it okay?

S) Yes. It’s very important. A good business press is an important part of successful economy. The US has great business newspapers. Same as Britain, same as Japan. Business people use these newspapers to help and make judgements.

I) They are doing their own business by using that kind of information.

S) Yes, and these are the people who hire, who provide jobs for hundreds of thousands of people who pump wealth back into the economy. It’s very important to the well being of these countries. They perform well in their work. Business newspapers are more helpful if they are doing their jobs properly.

I) We cannot deny the role of the business/financial journalism because, as you said, it has many impacts to the people who work in the business, and it affects a lot society.

S) Yes.

I) The business journalism is sometimes criticised because they just deal about the profitability. The profitable company is good. That kind of atmosphere created by business journalism and the company executives tend to think what they should do to make the profit. For example, medical bio-technology company tries to start the business to sell the irrelevant products to make the profit easily. What do you think about that point? To focus on profitability sometimes make them go the wrong way.

S) Oh I see, what you are suggesting is that the newspapers write stories that is nice about their advertisers…

I) Journalists sometimes tend to focus on profitability, sometimes the company fail to make the profit and go deficit. It shows that profitability is important, and making profit is the most important thing for companies. That kind of article creates the mood that the profitability is important.

S) So it should.

I) Do you think so?

S) Yes.

I) In that case, how do you think that the business executives tend to think to make the profit by selling the irrelevant products?

S) Irrelevant?

I) Irrelevant business. Originally they develop medicines, for example, suddenly, to make the profits, they sell another… like the papers or commodities.

S) Oh I see.

I) Is it really good things for the company?

S) It really depends on the company. It’s a very difficult question to answer. I mean, surely the first duty of the company is to provide a sustainable growth in profit in a kind of ethical and legal way. Whether it does, it might make the chemical selling paper or flying to the moon, it doesn’t matter as long as it’s good business which makes contribution to wealth and contribution to society by employing people. Businesses’ invested duty to society is to make a profit, and from that ***** all other good things like behaving ethically, employing people, treating your suppliers and your customers as well and all that kind of things. But all those soft values can’t happen, it just can’t happen unless the companies are profitable in the first place. I am not saying that the companies should make a profit at any cost, not at all, it should make profit judiciously and wisely.

I) It’s important to have profitability because it creates many employments and opportunities to invest or something like that.

S) That’s right. Exactly. Without money, there is no bread, and if there is no bread, there is no society.

I) What do you think about Enron or WorldCom issues?

S) It always happen these things. Risk is the part of the capitalist system. If you don’t take risk, you cannot make profit, you cannot make business.

I) That’s how it goes.

S) Yes. Now governments try to compensate for that. I’m putting in place strong rules of governance. But however strong your governance rules are, companies will take risks, and people will… sometimes be dishonest. However good your rules are, frauds will happen. And it is always going to be impossible to detect well-organised and well-concealed fraud. In fact, the best way to conceal the fraud is to run a company that appears to be very well governed. That was the case of Enron. The governance standard of Enron was superb.

I) How do you think about the financial journalism role at that time?

S) Poor. It was poor. Nobody detected it. No financial newspapers stood back and asked the basic questions. The standard of reporting was weak. Except for one. I think it was the New York Times. Was it Time magazine? Check. There was one US newspaper which warned that something was going wrong at Enron. Check it. The rest of us completely failed because we weren’t well-trained about it.

I) In a sense, that is the reflection point for the journalists. As a case study why the journalism cannot warn the public about Enron or WorldCom before it happens.

S) Risk is a part of our system. It’s the same in Japan.

I) Yes, Livedoor issues. Is it possible for journalists to say that risk is a part of the capitalism system? Or journalists should mention any kinds of risks before it happens, that’s the journalists’ job? What do you think about this point?

S) Risk is a part of capitalism, and a part of the service of the good journalist is to detect a risk. Just point it out. You don’t need to make judgements, just report it (laughter).

I) As you said, lack of knowledge, or lack of professionalism, they could not find or detect the incidents.

S) Yes.

I) How can the journalists get that kind of ability?

S) Through reading, experience, knowledge, constant questioning to the expert sources, through moral courage, having the ability to say what nobody wants to hear. How many people wrote the height of the Internet bubble? A large number of these companies is going to go bust so that basic rules of the business that you must make profit survive. We’re still all the same. People were writing a lot of rubbish about the new economy, and how the digital world reinvents our business. It was all rubbish. How many people have the courage, stand up and say “Well, these businesses are not going to make a profit” and they have collapsed, haven’t they?

I) Because of the lack of those abilities, the journalists cannot do…

S) Some can. I mean, there are some really great did that but there are very few. They have to know… enough to know what they are talking about, very well-read and experienced and courage to do an honest job.

I) How do you try to get those kinds of abilities by yourself?

S) You always ask yourself what you miss. Question yourself. Apply the high professional standard to yourself.

I) That is what you have done so far.

S) No, I failed (laughter). That’s what I would like to have done.

I) How do you think about if the ownership or sponsorship say stop writing? If you start something to write, and the ownership or advertiser notice that you are trying to write something which makes them bad, and say please stop writing. How do you react on that?

S) Very negatively.

I) Ignore them?

S) Well, it depends on what conditions of your ownerships are. But on the FT, our owner is Pearson, never intervened in what was written on the paper. It was completely unacceptable to do that. They were very good about it. They never did it. And there was a very clear division between the editorial department and the advertisement department. The editorial staffs were never told what the announcement is going in the paper on that day. They didn’t know who they were, the advertisers were.

I) It’s free to access everywhere without caring anything.

S) That’s right. And if the advertiser complained about the story to the editor, he would take quite a tough line with them. If they didn’t like the tone of the story, he would write to them the polite letter saying “Oh I am sorry, we are independent”. If you think ***** the advertisers found something inaccurate, that was different matter, then we would correct it. But they couldn’t complain because they didn’t like the tone of the story, or they didn’t like, ***** it was too short or with a wrong place, absolutely out of question.

I) Once fact is misunderstood, it should be corrected, but the tone or the way of writing nothing to discuss.

S) Yes, exactly.

[1] See OFAC information in US Department of the Treasury website. (http://www.treas.gov/offices/enforcement/ofac/civpen/penalties/05052006.pdf)

[2] http://online.wsj.com/PA2VJBNA4R/article_print/SB1003237924744857040.html. This article is available to read on the website for the registers only.

[3] The article is the Financial Times. URL: http://search.ft.com/searchArticle?page=3&queryText=takafumi+horie+arrested&javascriptEnabled=true&id=060123008023

[4] This line is from the website of Paul Sarbanes. URL: Sarbaneshttp://www.senate.gov/~sarbanes/pages/biography_2004.html

[5] URL: http://media.guardian.co.uk/presspublishing/story/0,,1718726,00.html

[6] The URL: http://www.pcc.org.uk/news/index.html?article=MzkyNA==

[7] Interview was in Japanese. Words were translated by the researcher.

[8] The interview was carried out in Japanese. Words were translated by the researcher.

[9] The interview was carried out in Japanese. Words were translated by the researcher.

[10] This interview was carried out over the telephone without recording.

[11] The interview was carried out in Japanese. The researcher translates his comments into English.

[12] The interview was carried out in Japanese. The researcher translates it into English.

[13] The interview was carried out on 11 August, the next day of the terrorism plot in London.

[14] The interview was carried out in Japanese. The researcher translates it into English.

[15] This comment comes through an email written in Japanese. The researcher translate this into English.

[16] The comments were in Japanese. Translation into English was done by the researcher.

[17] The comments came from a journalist of Bloomberg through email in August 2006.

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