Toshiba Accounting Scandal Essay

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MGMT 512 – Exam I Naci Yüksel - 0037094

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Toshiba’s Accounting Scandal

Toshiba is a leading Japanese multinational conglomerate which provides diversified products

and services such as electronics, home appliances, information & communications systems, medical

equipment and power systems. The company was founded in 1875 to pioneer in high technology not

only in Japan but also anywhere in the world (“About Toshiba”). Unfortunately, an independent

investigation had revealed one of Japan’s biggest accounting scandals in 2015 just after the 2011

Olympus scandal – another major technology company concealed $1.7 billion losses starting from the

early 1990s. It was also a surprising news in the face of Japanese Prime
…show more content…
The company had announced that it was

considering to appoint directors from outside of the company into the half of board seats. 294 page

report was published to point out the culture of pressure on employees to meet aggressive targets

originated from three generations of chief executives (“Toshiba : IR News, including Disclosures on the

Inappropriate Accounting Issue. Toshiba Corporation”). Muromachi’s salary was cut by 90 percent

along with a considerable drop in several remaining senior executives’ salaries. In addition to these,

Toshiba had also established a six member panel to correct the corporation’s governance framework.

MGMT 512 – Exam I Naci Yüksel - 0037094

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I strongly believe that the case is another example of the weakness of Japanese corporate

governance considering the timing of occurrence immediately after Olympus scandal. Although Toshiba

had been succeeded to pass new governance code coming from Abenomics, requiring publicly traded

companies in Japan to appoint at last two independent outside members, it did not work to prevent

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