Japan’s aging billionaires think they’re indispensable. It is a problem.

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Nidec Corp. founder Shigenobu Nagamori is back at the helm as the automaker’s CEO at the age of 77. away from the company he founded with three friends in a hangar, overseeing his rise from a maker of tape recorder parts to the leading producer of hard drive motors. It is now expanding into the supply of parts for electric cars.

After luring Nissan Motor Co.’s Jun Seki and installing him as his successor last year, Nagamori quickly downgraded him with shares down 40% since hitting a high last year. “At a time like this, I will take command in the short term to improve performance,” Nagamori said on April 21, “as a founder and a know-it-all.” What would the company do without him?

It’s not a compliment. Market reaction was cautious, with stocks closing on Friday. This is the second time Nagamori has ousted a potential successor, having hired, promoted and then sidelined Hiroyuki Yoshimoto, another former Nissan executive. “The management reshuffle highlights Nidec’s key person and succession risks,” Moody’s Corp analysts said.

Nidec is far from the only Japanese company facing this risk – in fact, the mindset seems to infect the country’s hardworking billionaires.

Masayoshi Son, 64, of SoftBank Group Corp., reviewed potential successors, most recently parting ways with Marcelo Claure after clashing over salary. Uniqlo founder Tadashi Yanai once said he would retire from Fast Retailing Co. at age 65; he is now 73 and shows no signs of slowing down.

Shareholders have the right to ask what the plan is. Organizations built around one person have a habit of falling apart when that person leaves, often in a hurry (a sentiment that might be familiar to Manchester United fans, who have just appointed their fifth full-time manager in the nine years after the departure from the success story of one long-time single man, Sir Alex Ferguson.)

Now is certainly not the right time to ask Nagamori, Son and Yanai (three of the five richest people in the country) to retire from their businesses. Shares of Fast Retailing and SoftBank are both trading at around half of their pandemic-era peaks last year. Son said in February he was having too much fun to quit. Investors might not share his sense of joy.

He had the chance in 2016 to pass the reins to former Google executive Nikesh Arora, who had been named his heir apparent. Instead, he decided to stay and transform SoftBank from a telecommunications company into a venture capital fund. Arora eventually took over from Palo Alto Networks Inc., where shares have since jumped 180%, outperforming the S&P 500.

Japan shouldn’t have to look far to find the perfect example of key person risk: the country’s most recognizable former CEO, Carlos Ghosn, overstayed his welcome after reforming Nissan, even before his legal troubles. Since Ghosn’s abrupt departure, Nissan and Renault have struggled. In the meantime, he is on the most wanted list in Japan and now in France, which has issued an arrest warrant for him for allegedly embezzling Renault money for his personal use.

There are examples of companies whose founders have successfully exited. At Keyence Corp., Takemitsu Takizaki – Japan’s second richest man – moved in 2000 at the age of 55 to become chairman. Since then, the stock has risen more than 1,000%, making it the second largest company in Japan. The succession was ordered there, the company being now its third president; each was in their 40s when they took over, breathing new life and vitality into the business.

Even at 77, Nagamori hardly lacks for that. He says he will return the CEO title to Seki in three years. But he and other reluctant retired billionaires must lead by example. Key man risk is endemic in Japan: by 2025, around 2.45 million small and medium-sized businesses will have owners over the age of 70, more than half of whom have yet to decide on successors . It’s time for leadership to come from the rich men at the top: know when to leave.

More from this writer and others on Bloomberg Opinion:

With borders still closed, Japan risks becoming a ‘pure invention’: Gearoid Reidy

I caught Omicron. People in China thought I was dying: Shuli Ren

• Expats from Hong Kong, where is your next destination? : Anjani Trivedi

This column does not necessarily reflect the opinion of the Editorial Board or of Bloomberg LP and its owners.

Gearoid Reidy is a Bloomberg News editor covering Japan. He previously led the breaking news team in North Asia and was the deputy chief of the Tokyo bureau.

More stories like this are available at bloomberg.com/opinion

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