Photo: (AP Photo/Shuji Kajiyama)
Within nine months of becoming the president of Olympus, Michael Woodford had exposed a $1.5 billion fraud, crashed the stock price and forced the entire board’s resignation.They should have known this man was trouble.
The British executive had caused a stir in 2005 and 2008 when he forced employees to resign over wrongdoing. He also nearly resigned in 2008 when he came across dubious financial activity.
So what were they thinking when they hired him?
“It’s a very good question. Why take someone who had a known record when he saw wrongdoing of dealing with it, why make him president of the corporation?” Woodford said in an interview with Business Insider.
Woodford attributed the decision to desperation.
“The decision to make me president was made by chairman Tsuyoshi Kikukawa alone. What he needed was an executive who could deliver results. I had taken loss-making businesses in the US and headed the medical business in Europe and I understood the medical business, which was key to Olympus’ profitability. They needed urgently to bring on someone who could increase profitability.”
They thought I would improve results and then the wrongdoing would slip away into history,” Woodford said.
Olympus was at the time the most indebted corporation in Japan, with debt to equity of 600 per cent. Following the stock crash, the corporation is even more screwed and may have to enter a strategic alliance to survive, says Woodford.
Woodford also attributed the decision to hire him to former chairman Kikukawa’s vanity.
“Tsuyoshi Kikukawa would be acclaimed for choosing the first non-Japanese salary man as president. If I had been successful—and I think I would have—Tsuyoshi Kikukawa would have been lauded as having great vision.”
Kikukawa would have got away with it too if not for investigations by a small Japanese magazine, FACTA. And even then the story could easily have disappeared.
“The Japanese media didn’t pick up on it at all. They’ve very self-censoring,” Woodford said. “In Alice In Wonderland Japan people think they can just ride these things out.”
Woodford is publishing an account of his dramatic story in Japanese in April and in English in October. He is also going on a speaking tour and is represented by the Greater Talent Network.
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