Corporate governance in Japan : the case of Olympus

The problem most companies face in the modern corporate world is that of maintaining the trust and confidence shareholders and investors have in them. When Michael C. Woodford, the former president and CEO of Olympus Corp, blew the whistle on corporat emalpractices that led to hiding billions in losses, corporate integrity and internal control systems in Japan were once again questioned. The outside directors of the company, as Woodford recalls, acted "like children in a classroom" when they were being asked to vote on the ousting of the investigative president and CEO. Woodford was then expelled through a board resolution. He described this experience as a "black comedy" that would not happen in any other developed market. Woodford also stressed that Japanese boardrooms "need more assertive shareholders and regulators, and more independent directors".