Keep the CEO in the picture

December 11, 2012 3:41 PM

When Michael Woodford discovered a staggering level of fraud in the optical multinational, Olympus, he was determined to expose it. As CEO of the company he was promptly fired for his efforts, and believed his life was in danger.

His story is a fascinating one, highlighting two unique worlds; the hermetic environment of business elites and the insular world of Japan Inc.

Woodford himself is quite atypical as a CEO: "I'm quite leftwing, you know. I could be a communist, if that worked any better than capitalism.", but the whole experience has left him with some familiar, if not controversial opinions about Japanese culture and business.

posted by smoke (16 comments total)

He was interviewed on the BBC's HardTalk, which is a good thing to listen to if you enjoy hearing an ill-informed interviewer constantly interrupt her guest.
posted by 1adam12 at 3:46 PM on December 11, 2012 [3 favorites]

Interesting. Thanks for posting it.
posted by Tell Me No Lies at 3:49 PM on December 11, 2012

Olympus Cons
posted by East Manitoba Regional Junior Kabaddi Champion '94 at 3:57 PM on December 11, 2012 [4 favorites]

It wasn't just any tuna sandwich – it was a tuna sandwich that would have made British Rail in 1981 proud.

This guy sounds alright.
posted by Blazecock Pileon at 4:18 PM on December 11, 2012

Businessweek had an article on this in February with a lot of details and background. It's well worth the read. Apart from anything else, I had no idea Olympus manufactured medical equipment.
posted by figurant at 4:26 PM on December 11, 2012 [2 favorites]

This is a pretty standard role as sacrificial lamb, even if Woodford wasn't specifically hired for it. Sometimes struggling companies hire a gaijin CEO or other high executive position because they know the shit is going to hit the fan, and they need an "outsider" to take the fall for them (e.g. Howard Stringer at Sony). But it looks like he was in a strong enough position to stand his ground, he had decades at Olympus and was actually an insider.

>"I'm quite leftwing, you know. I could be a communist, if that worked any better than capitalism."

I am always amused by Japanese political groups. The way I see it, the Liberal Democratic Party isn't liberal, they are the conservatives. The Socialist Party isn't leftist, it's the Liberal party. The Communist Party is the leftist socialist party. The conservative parties like the Sunrise Party are nationalistic ultra-rightists. It's like every group is totally lying about their political position.
posted by charlie don't surf at 4:37 PM on December 11, 2012

This case is fucking nuts. 5ish billion is unaccounted for, of which 2ish billion was just hush money to the yakuza.

It's also scary to think about how much an imploding Olympus could have hurt the health care world.

Also, 4/3 DSLRs. What was up with that? (Kidding.)
posted by Sticherbeast at 5:06 PM on December 11, 2012

When Michael Woodford discovered was tipped to a staggering level of fraud in the optical multinational, Olympus...

It shocks me a little that, even now, Woodford apparently does not grasp that he-- as a complete outsider and utter naif-- was chosen and in the process of being set up to take the fall for this scandal:

As others are left to tie up the loose ends - perhaps adding a yet-to-be-written final chapter to the whistleblower's 250-page account - Woodford's personal role in exposing the story has reached a full stop.

As far as the public is concerned, though, there is a further, unresolved mystery to mull over.

Who was the original whistleblower who tipped off journalists at Facta magazine?

Anonymous source

Woodford is determined to protect the identity of the Facta source, refusing even to say if they are male or female.

If that person had not approached Facta, or if Woodford had chosen to go along with the status quo - and not ruffle any corporate feathers - the ex-CEO would have simply served out his four-year contract and no-one would have been any the wiser.

‘The dirty secret would have gone, lost in history and Mori would have taken over. And Kikukawa would have been applauded for his vision in choosing a western salary-man, and being the first to do that.'

Woodford said he developed a bond with the Facta source after a contact organised for the pair to meet discreetly - an experience he describes as ‘humbling'.

‘That's the hero. That person is the hero.' [my emphasis]

Yes, more than you may realize, Mr. Woodford, but you are a pretty dam good person in your own right, as well.
posted by jamjam at 5:09 PM on December 11, 2012 [1 favorite]

This case is fucking nuts. 5ish billion is unaccounted for

So is missing money makes it nuts? Because other larger groups can not account for over 2 trillion and not much happens over 10 years later.
posted by rough ashlar at 5:17 PM on December 11, 2012 [1 favorite]

This case is fucking nuts. 5ish billion is unaccounted for

The optics are certainly not good.
posted by Flashman at 5:39 PM on December 11, 2012 [7 favorites]

I had some fond feelings for this company from my days of owning an Olympus OM-1 SLR. That camera is one of the all-time classics, and Olympus made (makes?) great lenses. So I was sad when this story first broke. Olympus was one of the good guys: they combined great design and great technology to make great consumer products. It was such a shame to see them trashed by the money men.
posted by alms at 6:12 PM on December 11, 2012

I'm glad this story made it as an FPP. Thanks smoke!
posted by infini at 6:13 PM on December 11, 2012

Thank you for the link.
posted by Alexandra Kitty at 6:38 PM on December 11, 2012

This is why I bought from Zeiss.

(Not really, but it doesn't make me feel bad that I bought from Zeiss)
posted by caution live frogs at 9:04 PM on December 11, 2012

This guy sounds alright.

Ya, but does he sound alright, or does he sound alright? Because, if he sounds alright, then that's alright, but if he sounds alright....
posted by Chuckles at 9:26 PM on December 11, 2012

Thanks for the Businessweek article, figurant. That is a fascinating story.
posted by Potsy at 10:02 PM on December 11, 2012