Type
Essay
Pages
8 pages
Word Count
1903 words
School
vietnam international un
Course Code
corporate governance

Corporate governance – solution for case Olympus

January 7, 2020
suggest website
https://www.bloomberg.com/professional/blog/japans-corporate-governance-overhaul-2/
http://myassignmenthelp.info/assignments/corporate-governance-of-olympus/
http://www.rieb.kobe-u.ac.jp/tjar/conference/7th/CD1_MasumiNAKASHIMA.pdf
https://sfmagazine.com/post-entry/november-2018-accounting-fraud-at-japanese-companies/
CG OLYMPUS CASE STUDY:
Question 1: Why did Kikukawa hire Woodford when there was pervasive fraud? What
constraints do you think Woodford could have anticipated before he took on this job?
a. Reason Woodford was hired:
First of all, when Olympus was the most indebted corporation in Japan, Tsuyoshi Kikukawa
made Woodford as president because of his ability (headed the medical business in Europe and
understood the medical business, which was key to Olympus’ profitability). The company needs
an executive who could deliver results, increase the profitability and with that improve in
results, make the wrongdoing slip away into history.
As the chairman of the BOD and the former President of Olympus, Kikukawa knew what was
going on throughout and the new presidents always accepted the decisions made by their
predecessors. With the belief that the financial statement at that time seemed reasonable
(cooked by financial executives), Woodford would not able to know the truth as well as have
time to discover.
Moreover, Kikukawa and his employees didn’t fully trust the foreigner when working because of
their corporate culture characteristics, therefore Kikukawa knew that the fraud of the company
wouldn’t be disclosed.
b. The constraints do you think Woodford could have anticipated before he took on
this job: P.9-10
1. Culture barriers (language, norms and values -p.9):
2. Lack of information about the company in Japan/ information asymmetry
3. Lack of relationship:Woodford did not have any reliable colleague when he just returned
and became President of Olympus.
4. Facing poor general management
Question 2: Do you agree with how Michael Woodford handled the situation at Olympus
when he learned of potential fraud? What, if anything, could he have done differently?
a. Do you agree with how Michael Woodford handled the situation at Olympus when he
learned of potential fraud? ( present in timeline)
Our group agrees with Michael Woodford actions because he did not have any other choice in
this case.
Back to the day when he learned of the potential wrongdoing, on 2 August 2011, and Kikukawa
(the Chairman) admitted the fraud situation, he has tried to investigate the truth, includingAsking
employees
- Having private meetings with the Chairman (Kikukawa) and the Vice President (Mori)
and shareholders
- Sending email demanding answer and explanation
However, he only received
- Denial and unclear answers
- Potential threats from criminals ‘yakuza’
- Criticism from the board for going too far

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