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Nidec Corp. founder Shigenobu Nagamori is back at the helm as chief executive officer of the motor maker again at the sprightly age of 77. A workaholic, notoriously dismissive of what he sees as slacking-off younger generations, Nagamori can’t seem to stay away from the company he founded with three friends in a shed, overseeing its rise from a maker of tape recorder parts to the leading producer of motors for hard disks. It is now expanding supplying parts for electric cars. 

After luring Jun Seki from Nissan Motor Co. and installing him as successor last year, Nagamori swiftly demoted him with shares down 40% since hitting a high last year. “At a time like this, I will take command in the short-term to improve performance,” Nagamori said on April 21, “as the founder and the person who knows everything.” What would the company do without him?

That’s not a compliment. Market reaction was cautious, with shares closing down Friday. It’s the second time Nagamori has ousted a potential successor, having previously hired, promoted and then sidelined Hiroyuki Yoshimoto, another former Nissan exec. “The management reshuffle underscores Nidec’s key person and succession risks,” analysts from Moody’s Corp. said. 

Nidec is far from the only Japanese company facing this risk — in fact the mindset seems to infect the country’s hardworking billionaires.

SoftBank Group Corp.’s Masayoshi Son, 64, has chewed through potential successors, most recently parting ways with Marcelo Claure after clashing over pay. Uniqlo founder Tadashi Yanai once said he’d retire from Fast Retailing Co. at 65; he’s now 73, and shows no signs of slowing down.

Shareholders are entitled to ask what the plan is. Organizations built around one person have a habit of falling apart when that individual departs, often in a hurry (a feeling that might be familiar to Manchester United fans, having just appointed their fifth full-time manager in the nine years following after the departure of long-serving one-man success story Sir Alex Ferguson.)

Certainly the timing isn’t right to ask Nagamori, Son and Yanai (three of the country’s five richest people) to step away from their companies. Shares in Fast Retailing and SoftBank are both trading at around half their pandemic-era peaks last year. Son said in February that he’s having too much fun to step down. Investors might not share in his sense of glee. 

He had the chance in 2016 to hand off the reins to former Google executive Nikesh Arora, who had been designated his heir apparent. Instead, he decided to stick around and transform SoftBank from a telecoms firm into a venture capital fund. Arora ended up taking over at Palo Alto Networks Inc. where shares have surged 180% since, outperforming the S&P 500.

Japan shouldn’t have to look very far to find the perfect example of key person risk: The country’s most recognizable former CEO, Carlos Ghosn, outstayed his welcome after reforming Nissan, even before his legal troubles. Since Ghosn’s abrupt departure, both Nissan and Renault have struggled. In the meantime, he’s on the most wanted list in Japan and now in France, which issued a warrant for his arrest for allegedly funneling money out of Renault for his personal use.

There are examples of companies where founders have successfully stepped away. At Keyence Corp., Takemitsu Takizaki — Japan’s second-richest man — moved upstairs in 2000 at the age of 55 to become chairman. Since then, the stock is up more than 1,000%, turning it into Japan’s second-biggest company. Succession there has been orderly, with the firm now on its third president; each has been in their 40s when they took over, injecting the firm with new life and vitality. 

Even at 77, Nagamori is hardly lacking for that. He says he’ll hand back the CEO title to Seki in three years. But he and other reluctant billionaire retirees must set an example. Key man risk is endemic to Japan: By 2025, around 2.45 million small- and medium-sized businesses will have owners aged over 70, with more than half of them undecided on successors. It’s time for leadership to come from the rich men at the top: Know when to walk away.

More From This Writer and Others at Bloomberg Opinion:

With Borders Still Shut, Japan Risks Becoming ‘Pure Invention’: Gearoid Reidy

I Caught Omicron. People in China Thought I Was Dying: Shuli Ren

• Hong Kong Expats, Where’s Your Next Destination?: Anjani Trivedi

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Gearoid Reidy is a Bloomberg News senior editor covering Japan. He previously led the breaking news team in North Asia and was the Tokyo deputy bureau chief.

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