The Financial Services Agency has ordered the Mizuho Financial Group, whose computer system crashed spectacularly on the occasion of its integration last April, to improve its internal management setup so as to prevent any recurrence of the bungle. Mizuho itself has decided to cut the pay of all of its 107 directors as a punishment. This has confirmed our suspicion that although there were certainly technical reasons for the glitch, it was in fact a man-made disaster. Human misjudgments and poor understanding exacerbated the problem and resulted in huge inconvenience to customers.

The causes of the error can be summarized as (1) a delay in management's decision-making relating to the computer system; (2) inadequate preparations, such as preliminary tests that should have been considered the minimum necessary; (3) a failure to relay important negative information to the top; and (4) a lack of recognition of the risks involved in system integration.

Among these causes, the third factor is the most important. Even though people understood at the test stage that the system was not functioning properly, the negative information remained in the development section and was not transmitted to the top management. Why on earth did the people on the floor not report such important information to the top? Mr. Terunobu Maeda, president of Mizuho Holdings Inc. and chief executive officer of the Mizuho Financial Group, recognized that there was an "atmosphere" in the group that made people hesitant to report negative information to the top. The point that should be severely criticized here is that this atmosphere and ethos in the group, which made it so difficult for employees to directly relay awkward information to their bosses, was ignored by management.