The causes and consequences of the long-running inflation of profits by Toshiba reflect some uniquely Japanese cultural norms. So, inevitably, did the 2011 scandal at Olympus , where successive leaders covered up accounting manipulation.
When it comes to companies, the less murk, the better.
In the new edition of London Review of Books, author and journalist John Lanchester points out that three recent corporate “outrages” – the sale of UK lender Northern Rock to Virgin Money, the collapse of MF Global, and the Olympus scandal – share “a crucial similarity”:
An interested outside party, paying the closest of attention, and immersing herself in all the publicly available information, would have had no chance of knowing what was really going on.
Michael Woodford has undoubtedly done a service to Japanese capitalism by exposing the accounting scandal at Olympus. But is the former president and chief executive the right man to lead the camera and medical equipment maker out of the mire? I think not.
The British executive is now back in Japan and due to meet the directors who fired him on Friday. Three executives formally resigned as directors on Thursday ahead of the encounter, but I would still love to be a fly on the boardroom wall for it. Read more
You know a corporate scandal is serious when prime ministers and heads of state start to mention it. The fact that Japan’s premier Yoshihiko Noda took time in an FT interview on Monday to talk about the problems at Olympus is doubly significant, therefore. As our correspondents Michiyo Nakamoto and Mure Dickie point out, it’s “highly unusual for a Japanese prime minister to comment on events involving a private company”. Here’s what Mr Noda said:
What worries me is that it will be a problem if people take the events at this one Japanese company and generalise from that to say Japan is a country that [does not follow] the rules of capitalism. Japanese society is not that kind of society.