By Max Nisen
Nov. 26, 2012
In September 2011, then Olympus CEO Michael Woodford noticed major issues with the company’s acquisitions. He went to the board, which set up a meeting on the issue for the next month.They ended up canceling the discussion and rapidly fired him instead. He writes in his upcoming memoir, excerpted in the Wall Street Journal, that it was “An eight-minute corporate execution…. I rose quietly, left the room and, deliberately holding my head high, walked back to my office.”The result? He turned whistleblower, and fled to England, fearing for his life. Colleagues who he once counted as friends would no longer speak to him. “I have seen the cowardliness of people.” Woodford told the WSJ.
The company’s former chairman, Tsuyoshi Kikukawa, recently pleaded guilty to falsifying financial statements hiding up to $1.7 billion in losses, and faces up to 10 years in prison.
To those who say he could have handled things better, Woodford responds that he had no choice and no other recourse:
“I wrote six letters,” he says, “I begged and pleaded to look at the facts — and they fired me. Some said ‘Michael could have gone to the Japanese authorities.’ That shows their naivety. The only reason the Japanese authorities acted was because of the global spotlight brought about that there was something wrong.”
The Japanese media was so passive that Woodford was forced to go outside. Even after his firing and the Chairman’s ouster, the next CEO insisted the company’s investments were strategically important, and the Japanese media barely blinked an eye.
Woodford was able to become a whistleblower and spark the interest of international media because he had his British passport as a recourse. In the aftermath of the scandal, the hope was that this would spark real reform in Japan. That hasn’t really been the case. If there’s really going to be progress, both the media and protections for whistleblowers need to completely transform.