TOKYO/NAGOYA, Japan -- Nearly four years ago, a 28-year-old engineer at Toyota Motor was driven to suicide after relentless bullying and abuse from his boss, who told him that he "should die," mocked his educational background and prevented him from taking time off.
On Monday, the automaker announced a set of measures aimed at addressing what Japan terms "power harassment."
The move underscores the growing risks of inaction as the rise in socially conscious investing means that companies that let such conduct continue risk a hit to not only their reputations, but also their valuations.
Soon after President Akio Toyoda learned about the 2017 incident from news reports in November 2019, he visited the engineer's family and promised action to ensure that nothing similar would happen again.
He spearheaded the implementation last July of "360-degree feedback" for about 10,000 managers and executives, a process that includes anonymous reviews from subordinates and peers, as part of an effort to change the company's culture.
The additional measures announced this week include making it easier for workers to report harassment, reworking the transition back into the office for employees returning from leave, and writing an explicit ban on bullying into the company's rulebook.
Toyota initially denied a connection between the harassment and the engineer's suicide, but a later ruling that his death was job-related put responsibility on the company's shoulders, and Toyota reached a settlement with the family on April 7.
The incident was not reported to Toyoda initially because of a "lack of urgency," said an executive, who noted that "things have moved along very quickly since the president got involved."
As investors pay closer attention to social and governance issues, they are growing less willing to tolerate misconduct seen as violating employees' human rights.
Executives at such corporate giants as Google and McDonald's have been forced out over allegations of sexual misconduct toward employees or inappropriate workplace relationships, likely in part out of concern about the consequences if they failed to act. Companies found to cover up such incidents could face investor flight that would drag down their value.
This comes on top of a changing legal environment in Japan. Revised legislation that took effect in June 2020 requires companies to take action to discourage power harassment -- defined as actions that take advantage of a superior position, exceed what is necessary and reasonable for work, and harm employees' working environment.
Companies that fail to do so can be named and shamed, risking enormous damage to their image.
The issue of workplace bullying was brought into the spotlight in 2015 with a 24-year old Dentsu employee's death by suicide that was linked to extreme overtime, driven by directives from superiors that could be considered power harassment.
The advertising agency faced widespread condemnation over the incident, and the president at the time resigned in response. Dentsu worked to reform its culture, helping to lay the groundwork for later legislation to tackle the overwork problem with such measures as limiting overtime.
Yet reports of bullying continue to rise. Japan's individual labor dispute resolution system handled consultations on about 88,000 cases involving bullying or harassment in fiscal 2019, double the total a decade earlier, according to the labor ministry. After the Dentsu case, harassment-related suicides came to light at other big-name companies, including Mitsubishi Electric and Yamaha.
"Bosses have more power in Japan, with its lifetime employment model, than overseas, where changing jobs is the norm," said Akiko Yamakawa, an attorney and expert on labor issues, adding that "victims often hesitate to report" harassment.
The anti-bullying legislation does not include concrete penalties for violators, and the labor ministry's implementation guidelines provide a broad range of examples of conduct falling short of harassment. Many smaller businesses are not even aware of the law.
The legislation will not be truly effective "unless perpetrators and companies are subject to fines or other penalties," attorney Shoichi Ibusuki said.
An International Labor Organization convention on work-related violence and harassment -- which explicitly covers job searching and business travel -- is set to take effect in late June. While most countries, including Japan, have yet to ratify it, the measure reflects global momentum that risks leaving slow-moving companies behind.