HR & Management

Executive Julie Hamp's drug arrest poses a threat to Toyota's diversity push

3 min read

02 July 2015

Toyota has seen its first female executive resign after 90 days in the job after she was arrested by the Japanese police. This has hurt both the company's push for diversity and prime minister Shinzo Abe's plan to have 30 per cent women in leadership roles by the end of the decade.

In order to create a more diverse workforce, Toyota appointed a foreign vice-president and promoted a woman into its top ranks – both are firsts for the Japanese firm in its nearly 80-year history.

However, the carmaker announced the resignation of its first senior western female executive following her arrest in Japan on June 18.

Julie Hamp, the company’s chief communications officer, was detained on suspicion of illegally importing a prescription drug from the US. The case currently centres on Hamp’s misunderstanding of Japan’s rules. Even with a prescription, it’s illegal to bring many drugs into Japan from the US.

A package sent to her, labelled as “necklaces” and containing 57 Oxycodone pills – a painkiller which requires prescription in both the US and Japan – had been intervened at Narita airport, suggested Automotive News. 

“Japan will suffer from this,” said Jeff Kingston, professor of Asian Studies at Temple University’s Japan Campus in Tokyo. Hamp’s treatment by the police and local media “sends a chilling message to other foreign managers who might be considering a posting to Japan”.

Read more about the latest arrests:

Toyota announced that she notified the company of her intent to resign. Having previously expressed support for Hamp, the company said it accepted her resignation in view of “the concerns and inconvenience that recent events have caused our stakeholders”.

Crisis management experts said Hamp’s resignation was inevitable regardless of the outcome of the police investigation, considering the reputational damage.

“The PR division is a place to promote compliance,” said Tatsumi Tanaka, CEO of Risk Hedge. “The fact that the suspicion of illegally importing a restricted drug was held is in itself a problem.” 

Tanaka claimed that Toyota needed to teach its executives about cultural practices and laws when assigning them to foreign territories.

It also deals a setback to prime minister Shinzo Abe, who has made empowering women a priority to help modernise the nation’s economy – including calling on Japan to have women in 30 per cent of leadership roles by 2020.

There were eight per cent of women in such roles in 2014, compared with 21 per cent of senior roles in the FTSE 100 alone. 

Toyota has said it remains committed to its diversity push, repeating a pledge by CEO Akio Toyoda to appoint people regardless of nationality, gender or age.