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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