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Corporate Blog

Optimizing Corporate Value: A Strategic Outlook on the Legal Department's Dual Role
– In Conversation with Tomokazu Usagawa, Chief Legal Officer, and Head of Legal Affairs.

January 05, 2024

Coca-Cola Bottlers Japan was established in April 2017 through the merger of twelve bottler companies across Japan. As one of over 225 global Coca-Cola Bottlers producing and selling The Coca-Cola Company’s products, our company stands firm not only as one of the largest Coca-Cola bottlers in Asia, but also as one of the largest in the world in terms of sales revenue. Adapting to evolving business landscapes, we have prioritized the establishment of a robust legal organization. In 2021 Tomokazu Usagawa, a legal expert with experience in automobile manufacturing and advertising, joined us as Chief Legal Officer and Head of the Legal Department. In our conversation with Tomokazu, he shares his vision and sheds light on the department's key initiatives, emphasizing the legal team's role as a 'family doctor'.

■ The Legal Department as a 'Family Doctor': Understanding and Navigating Varied Company Realities

Tomokazu began his career at an automobile manufacturer, gaining six years of diverse legal experience, including involvement in shareholder relations and mergers and acquisitions (M&A). Subsequently, he spent 17 years at an advertising agency, specializing in sports law and overseas M&A. His international exposure was expanded through studies abroad and assignments in Singapore and Beijing, before joining our company in 2021.

Upon joining, management highlighted to him the numerous legal challenges, especially in the context of transformation post-merger of the twelve bottlers and amid the challenges posed by the COVID-19 pandemic.

"When I joined the company, there were indeed challenges. However, the legal department exhibited a keen awareness of the issues, proactively addressing them. I felt a cooperative atmosphere among members and noted a positive attitude towards legal matters from other business departments. Additionally, there was a palpable sense of expectation and respect for the legal department from management. Tomokazu expressed his determination, stating: “I resolved to overcome these challenges and advance step by step, confident that I could do it with these colleagues."
After the integration of bottler companies from various regions of Japan, our company evolved into a nationwide organization. Naturally, cultural and methodological differences arose. Even though rules and internal systems were in place, there was a lack of common understanding and operations. Furthermore, awareness of ethics, compliance, risks, and legal matters was inconsistent. ”One of the reasons for the lack of progress in solving these challenges was insufficient communication from the legal department. I felt the need to strengthen communication by increasing contact points with each department through newsletters, posts, training, and e-learning. It is important to ensure that everyone in the company understands what the legal department is doing, what rules and policies the company has, and to create an environment where these are adhered to."

Tomokazu emphasizes, "The in-house legal department serves as the company's exclusive 'family doctor.' A family physician will know their regular patients well, including their usual condition. This allows them to provide appropriate and prompt initial responses when the patient shows symptoms and if necessary, refer them to medical specialists or general hospitals. In the context of a company's legal affairs, the in-house legal department plays the same role, identifying external specialists when necessary. However, Tomokazu notes that the legal department often tends to isolate itself in its expertise, potentially becoming a barrier to communication."

"Just like there are cases where people are unaware of their illnesses and others where they have symptoms but cannot diagnose themselves, the same is true for legal issues in the field; people may not be able to judge whether there is a legal problem. That's why it's crucial for the legal department to proactively communicate and create an environment where others can easily consult with us. If the legal department is too focused on its expertise, it creates an environment where it's difficult to consult. I also realized in my youth that I had such a tendency, but as I gained more experience, I started to emphasize communication more."

Tomokazu, who prioritizes communication, has actively worked to strengthen both vertical and horizontal connections within the organization since joining. Vertical connections involve communication within the legal department. When Tomokazu joined during the COVID-19 pandemic, with everyone working remotely, he was concerned about the reduced opportunities for team members to engage in conversation. To address this, he initiated regular ”Connection Meetings,” In these bimonthly meetings, all legal department members would gather online to discuss a predetermined topic. Since 2023, they have begun meeting in person every six months. In addition, Tomokazu ensures he has one-on-one conversations with legal department members every month to bridge any communication gaps.

To develop horizontal communication, Tomokazu has been conducting "Learning Meetings” to strengthen relations between legal, other departments, and external stakeholders. These meetings are also held every two months, alternating with the Connection Meetings. Learning Meetings involve other departments and external parties to facilitate knowledge exchange.

Additionally, the legal team actively engages in departmental meetings to communicate legal news and information. The Ethics and Compliance Promotion Department holds monthly working groups with other departments, facilitating the exchange of ethics, compliance, and legal information. This includes hosting various training sessions, distributing regular newsletters, and posting on the intranet. Notably, intranet posts are not limited to legal information; they include factory visits and updates about the Connection Meetings to make the legal department more approachable and accessible. Tomokazu reported positive feedback from other departments regarding these communication efforts.

■ Fueling Business Growth through Passionate Communication and Mutual Understanding

Tomokazu's focus on communication as a legal professional is rooted in the dynamic landscape of changing social conditions and the evolving functions required in legal affairs.

"I’ve observed a significant transformation in legal affairs throughout my career. Initially, it was a more passive role, mainly dealing with troubles and lawsuits. However, there has been a shift towards proactive, preventive legal measures such as contract reviews. Recently, the legal department’s role has expanded to actively contribute to establishing a sustainable corporate foundation. Additionally, there’s a growing emphasis on compliance as a prevailing trend. The frequency of major corporations being embroiled in scandals underscores the critical role of legal affairs. With the rise of the internet and increased media coverage, compliance violations now pose a substantial business risk. Regulatory bodies such as supervisory authorities and the Tokyo Stock Exchange acknowledge the importance of compliance and corporate governance. Investors, too, are raising their expectations concerning legal aspects and corporate governance. The realms of legal affairs, ethics, compliance, and corporate governance are increasingly vital for managing and enhancing corporate value."

Tomokazu emphasized that the role of the legal department extends beyond a mere back office conducting contract reviews. He advocates for the legal department to embody a corporate culture of 'doing the right thing.' He believes it is essential to foster a corporate environment where the department actively contributes to business objectives and fearlessly addresses wrongdoing.

“In essence, the primary mission of the legal department is to enhance corporate value, necessitating the establishment of a trustworthy organization. Striking a balance is essential; the legal department must manage risks effectively, discerning which risks are controllable, and supporting prudent risk-taking.”

Tomokazu also underscores the importance of 'passion’ among legal department members in fulfilling their responsibilities. "We consider it part of our vision to take pride in creating a company that is growing sustainably, and to approach our work with passion. This includes taking a pride in our products, immersing ourselves in our tasks, researching operations of the departments under our responsibility, and studying cases from other companies—all aspects of being passionate in every aspect of our work."

“Engaging in thorough research and serving as a business solution partner for each department, we proactively offer legal perspectives, occasionally acting as guardians to ensure compliance and overall optimization.” Tomokazu explains that balancing both offensive and defensive stances is key to fulfilling their mission.

While the defensive role of legal affairs is commonly understood, when asked about the offensive aspect, characterized by passionate business solutions in legal affairs, Tomokazu explained, " Rather than merely evaluating issues presented by other departments from a legal standpoint, we act as business solution partners. We delve into the real situation, offering our own suggestions. Legal involvement has the potential to achieve what may seem impossible or previously unattainable. I encourage our team members to approach their work with this perspective in mind."

■ Legal Department Enhances Business via Operational Improvements and Data Utilization

The legal department, now prioritizing communication for business contribution, faces a current challenge related to knowledge sharing. Despite possessing specialized legal knowledge, there are inefficiencies, such as responding individually to frequent, similar inquiries. There are also inefficiencies in processes within the legal department and with field departments. Moreover, the evolution of legal technology, such as AI-powered contract review tools, is remarkable, and their utilization will become essential in the future. In response to this, Tomokazu has established a new 'Legal Operations Promotion Division'.

"Going forward, the plan is to enhance the overall efficiency and capability of the organization while leveraging our high legal skills. The initiatives of the Legal Operations Promotion Division are deemed essential, with similar movements to create legal operations departments in Coca-Cola bottler companies abroad, indicating its global recognition as a necessary function."

The establishment of the Legal Operations Promotion Division is a significant step towards solving the legal department’s challenges. Consequently, the perception and accessibility of the legal department has steadily improved, leading to an increase in consultation. The department is gradually assuming the role of 'family doctor.' While it is challenging for a legal department (unlike a typical sales department) to set clear profit goals, the Legal Operations Promotion Division has initiated improvement activities based on KPIs such as contract processing numbers, lead times, and attorney fees.

Concerning the future outlook of the department, Tomokazu commented, "In the future, we will persist in contributing to the enhancement of corporate value. We aspire to be a department that establishes a trustworthy foundation for the company in the eyes of customers and the market, becoming a reliable entity for internal clients by utilizing our high specialization and communication skills."

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