THIS MONTH / November 2025

Founded in 1887, shortly after Japan opened to Western nations and the restoration of imperial power ended more than two centuries of Tokugawa Shogunate rule (Meiji Restoration), Kao Corporation focuses on hygiene, food safety, sustainable development, and beauty. In its financial communications, the company emphasizes order, harmony, beauty, and financial metrics such as ROIC and EVA! Since 2020, Kao has held the triple-A rating from CDP, an award given to only 8 companies out of more than 20,000 analyzed. Its financial performance suffered from inflation, which penalized its operating margin, but it remained committed to its sustainable development principles while also allocating significant weight to financial metrics in executive compensation. Furthermore, the firm, whose shares are held by leading Anglo-Saxon institutional investors, is very conservative in its financial policy and does not appear to be seeking to improve its financial profitability through leverage. Finally, growth objectives are “measured” and effortlessly financed by a robust balance sheet. Paradoxes or harmony? Can sustainable development, positive stakeholder interaction, and long-term shareholder value creation be reconciled?

This month’s blog post takes us back 40 years to observe behaviors paralyzed by the emergence of a competing and feared technology. Any analogy with AI…