Anthony Fensom

Anthony Fensom


What made you pursue this story about reform in the Japanese corporate world, and how does it relate to your whaling article, which is beloved in the Diplomat’s editorial office?

Olympus has been the biggest business story to hit Japan in the past year. A foreign CEO blowing the whistle; an intransigent board blaming cultural issues; and finally the probe by the police and financial authorities to unveil massive fraud at a once-proud company. For anyone interested in Japanese corporate governance, it’s been a gripping story that’s still being played out.

Whaling is obviously a completely different issue, but again—like the Olympus story—both issues have strong opinions on both sides and the challenge as a writer is to provide a balanced approach.

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Given the money involved at Olympus, this is somewhere between Bernie Madoff and Marc Drier, in terms of size, and in terms of the economy playing in. But maybe there’s another precedent you thought of?

Enron comes to mind in this regard – obviously a completely different scale, but also of great significance to the corporate governance debate. Prior to the Enron scandal, the US system was held up as a model for Japan and other countries to follow. Unfortunately no system is perfect and the experts are generally agreed that there is much to learn from both the US and Japanese models.

How does Woodford’s brand, so to speak, come off at the end of all this?

It’s probably too early to judge the impact on Michael Woodford’s “brand.” In some circles he was portrayed as a crusading reformer, but in others as a hapless foreigner not aware of Japanese cultural issues. The main concern is whether the affair will discourage other Japanese companies from appointing foreign CEOs, or reformers of any ilk.

You write, “[T]the jury remains out as to whether Olympus showed a systemic failure of the system.” What’s your take on that?

The evidence would suggest that Olympus was an isolated case and not representative of systemic failure. However, as both Japanese and foreign commentators have asserted, further reform is necessary to address the conditions that allowed such a scandal to eventuate.

What should the takeaway be for corporate governance inside and outside Japan?

Further reform is required in Japan, but it’s also important not to throw the baby out with the bathwater. Japan in many ways is legally more “shareholder friendly” than the US system and has a number of advantages. Generally, reformers both inside and outside Japan should learn from all models of corporate governance – a “one size fits all” approach is counterproductive.

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