“I would say my two biggest priorities from day one were: how to create a legal and compliance infrastructure on a global level, and a culture around that. Obviously that’s not something that happens in four years, or maybe 10, but I think in terms of putting together the elements of a global compliance program—a unified global hotline for whistleblowing concerns; global, not local, policies in each of the risk areas; an investigation mindset, learning from the results of those investigations and making improvements in process; assigning responsibility through appropriate disciplinary structures—we made progress on all of those things, creating ownership in a more positive way. To me, that’s kind of the bread and butter of how to create that global compliance infrastructure.
“The other of my priorities was people, the team, building the right combination. I learned from Ben Heineman that you almost have to create a law firm within the company, with the right combination of specializations in these areas who support everybody and generalists who really understand the business that they’re supporting. Of course, that’s a never-ending process. But that’s what I spent my time on.”
Bates says he can’t claim to have been a visionary as an advocate of LGBT issues in the workplace. Rather, his openness evolved slowly. However the result, he says, was that he felt more authentic as a leader, knowing his marriage was accepted.
“Certainly by the time our first son was born in 2011, there was no doubt that we were totally open as gay parents, for the sake of the children as much as ourselves,” Bates says. “We popped open a bottle of champagne in June 2013, the year I was leaving GE, when the US Supreme Court overturned the Defense of Marriage Act and recognized retroactively our 2008 marriage in California.
“I grew up in an environment where I could not acknowledge myself or talk about these issues. It took me many years, even in a Western context, to be able to do that. So, Japan is not completely unique in that regard. But it is the reality that as the world has changed, most of Europe and the Americas have moved to recognize same-sex partnerships—generally, moving in a positive direction. Here, we still don’t see those types of legal changes.
“Part of the problem is that in Japan, even for a straight couple, you don’t talk about your family relationship very much in a Japanese company context. It’s kind of, to a large extent, separate worlds.”
That lack of openness affects LGBT employees more strongly, he says, and their contribution suffers as a result.
“How I talk about my personal life, in a way that’s credible to the people who are working for me, that affects my influencing skills and people’s level of trust in me as a leader,” he says. “The fairness aside, I think companies are probably relying on people who cannot feel comfortable being who they are and cannot contribute their great ideas as the companies need to change.”
Japanese businesses are slowly coming to a recognition that diversity is crucial to any transformation, he says. But without “a strong legal driver,” it remains a question of mindset rather than policy.
“There’s a much greater awareness and understanding than there used to be when I first came to Japan,” Bates says. “But I don’t think that’s translated yet into enough concrete policies that require progress or laws to actually make it happen. As a result, ahead of regulatory policy, we’re starting at the company level, as I see in those I’ve been working in.”
Bates is in the process of relocating to the US, where his family has been based since last year, and eyeing his prospects for the future. As he sees it, that future is likely to involve China and Japan.
“As somebody who loves cross-cultural interaction in the business world, I want to be where I can continue to contribute,” he says. “What I see going on in the world right now is dismaying in many respects. I understand why people would talk about things like decoupling. But personally, I don’t think that’s possible or wise because from a business perspective, whether you’re a global Japanese company or a US company or a European company, China is a reality that is going to be there. We may have a responsibility to figure out how to address the social or human rights policies we don’t agree with. But I don’t think it’s going to be in our own interests to decouple and lose scale.
“So personally, what does that mean for me yet? I don’t know exactly. But I want to be engaged from a business perspective in some way.”
David Ashton is a Partner and founded Brunswick’s research arm Brunswick Insight in Asia. Formerly in Hong Kong, he is now based in the firm’s Tokyo office.