11.12.2012 | Japan
Michael Woodford is not a typical businessman. In 2011 he became the first Western executive to run a Japanese iconic brand,being elected President and CEO of Olympus after spending three decades with the company. Within a few months he had broken another record, becoming the first CEO to turn against his own employer and expose one of the biggest stories of corruption in Japan.
s a foreign-born samurai, Michael Woodford quit an $8 million salary and risked his life to expose a culture of widespread corruption in the camera and medical equipment maker. In a story reminiscent of the film The Insider, he investigated and disclosed a $1.7 billion accounting fraud aiming to conceal losses going back two decades.
The leak was a major blow for the company, and was also instrumental in prompting a crackdown on corporate corruption in Japan.According to local media, the executives charged with cooking the firm’s books could face up to ten years in jail. Olympus’s shares aslo plunged after the scandal came to the spotlight. That did not make things easier for Michael Woodford, who was fired and had to flee the country. It was his collaboration with The Financial Times and the Serious Fraud Office that probably saved him from worse trouble.
Michael Woodford quit an $8 million salary and risked his life to expose a culture of widespread corruption
Michael Woodford narrated his story in the book Exposure, published on 29 November by Penguin. In an event held at Said Business School last November, he described the hostility he faced when he uncovered the scheme.
Corruption in Japan is a well-kept secret. The country is ranked 17th on the Corruption Perceptions Index 2012, along with the UK and above United States and France. However, the Index only measures perceptions of corruption in the public sector among executives and experts, rather than the real extent of the problem. According to a report published last year by the OECD, ’’Japan is still not actively detecting and investigating foreign bribery cases and, as a result, the enforcement of Japan’s anti-bribery law remains low.’’
According to Michael Woodford, a secretive corporate culture is what has made corruption in Japan such a pressing problem. As he puts it, ’’I thought I was going to run a healthcare and consumer electronics company but found I had walked into a John Grisham novel.’’ He now calls for greater transparency and accountability of senior management in Japan.
by Alex Katsomitros
