Last week’s high-profile resignations of CEO Hisao Tanaka and eight other Toshiba Corp. executives amid revelations of systemic and prolonged financial misstatements raise questions anew about Japan’s corporate governance culture.
The venerable conglomerate, which makes everything from consumer electronics to nuclear energy technology, was under fire over accounting irregularities and had established an Independent Investigation Committee. That committee’s report concluded that Toshiba overstated profits by 151.8 billion yen (US$1.2 billion) from 2008 to 2014.
The report’s findings and subsequent resignations could set back efforts to reform the Japanese corporate governance culture. Toshiba had been viewed as a pioneer in Japan in adopting an “audit committee” structure more commonly found in Western corporate governance.…