Ten years ago, cor­po­rate Amer­i­ca was rocked by a series of account­ing scan­dals that destroyed one of the world’s largest account­ing firms (Arthur Ander­sen) and led to the pas­sage of the Sar­banes-Oxley Act (Sar­box, or some­times sim­ply referred to as SOX). A num­ber of well-known Amer­i­can com­pa­nies — notably Enron, Tyco, Adel­phia, and World­Com — suf­fered a par­tial or total col­lapse as a result of mis­man­age­ment and breach of fidu­cia­ry duty dur­ing the 1980s and 1990s by their boards and top exec­u­tive, who tried to cov­er up their misdeeds.

Though Enron and its con­tem­po­raries have since fad­ed from the head­lines, it has become clear in suc­ces­sive years that“creative account­ing” was prac­ticed at more than just a few firms. We do not yet know the full extent of the wrong­do­ing com­mit­ted or per­pet­u­at­ed in the board­rooms of the world’s biggest com­pa­nies dur­ing the “Exces­sive Eight­ies” and “Nifty Nineties”.

But with each pass­ing year, we’re learn­ing more.

The lat­est com­pa­ny to be tar­nished by seri­ous, sub­stan­ti­at­ed alle­ga­tions of account­ing fraud is Olym­pus, a Japan­ese-based mak­er of imag­ing and med­ical equip­ment. Orig­i­nal­ly found­ed in 1919, Olym­pus is near­ly one hun­dred years old.

A cou­ple of months ago, Olym­pus unex­pect­ed­ly fired its chief exec­u­tive offi­cer,  Michael C. Wood­ford, after just two weeks on the job, claim­ing he was “unable to under­stand that we need to reflect a man­age­ment style we have built up in our nine­ty-two years as a com­pa­ny.” (Pri­or to Wood­ford’s selec­tion as chief exec­u­tive, which was engi­neered by Tsuyoshi Kikukawa, Olym­pus had been run exclu­sive­ly by a suc­ces­sion of Japan­ese businessmen).

The strange deci­sion sur­prised ana­lysts, because Wood­ford has been billed as the com­pa­ny’s new glob­al face only days ear­li­er. Some­thing seemed wrong.

And indeed, some­thing was wrong.

It turns out that Wood­ford was fired because he start­ed ask­ing too many ques­tions after he was pro­mot­ed — and because he used his author­i­ty as chief exec­u­tive offi­cer to begin inspect­ing the com­pa­ny’s books, which he cor­rect­ly sus­pect­ed were cooked. Wood­ford’s actions cre­at­ed a huge prob­lem for Kikukawa, who hasti­ly arranged for Olym­pus’ board to get rid of Wood­ford. Fol­low­ing Wood­ford’s ouster, Kikukawa had him­self reap­point­ed as pres­i­dent and chief exec­u­tive officer.

But Wood­ford did not go qui­et­ly into the good night. He deliv­ered a trove of incrim­i­nat­ing data to the press and to author­i­ties, in the Unit­ed King­dom, Unit­ed States, and Japan (Olym­pus has hold­ings in all three coun­tries). And he pub­licly assailed Kikukawa and the board for his unjus­ti­fied sacking.

In the wake of his ouster and dis­clo­sure, Olym­pus’ share price dropped like a rock, and sev­er­al invest­ment banks sus­pend­ed their cov­er­age of the company.

Ini­tial­ly, Kikukawa and sev­er­al of Olym­pus’ oth­er direc­tors tried to fight back and refute Wood­ford’s alle­ga­tions; they even threat­ened legal action. Wood­ford dis­missed the threats, telling The New York Times he believed Kikukawa and his cronies were get­ting des­per­ate. And he was correct.

On Octo­ber 26th, Kikukawa resigned as pres­i­dent and CEO, though he con­tin­ued to deny any wrong­do­ing. The com­pa­ny’s board appoint­ed direc­tor Shuichi Takaya­ma as his suc­ces­sor. An out­side com­mit­tee appoint­ed by Olym­pus deter­mined in ear­ly Novem­ber that the exces­sive­ly large merg­er pay­outs that Wood­ford had ques­tioned had indeed been used to cov­er up loss­es on investments.

Olym­pus sub­se­quent­ly fired Hisas­hi Mori, one of Kikukawa’s deputies, who was involved in the account­ing cov­er-up. Takaya­ma admit­ted pub­licly that there had been “inap­pro­pri­ate deal­ings”, but con­tin­ued to down­play the alle­ga­tions, even as the Tokyo Met­ro­pol­i­tan Police launched an inves­ti­ga­tion of the company.

On Novem­ber 10th, Olym­pus dis­closed that the release of its sec­ond-quar­ter earn­ings would be delayed for a sec­ond time while the com­pa­ny com­plet­ed an inves­ti­ga­tion of its own finances. The Tokyo Stock Exchange respond­ed by threat­en­ing to delist Olym­pus’ stock if it failed to sub­mit its report by Decem­ber 14th (which is less than a week from today).

Major share­hold­ers, mean­while, began join­ing Wood­ford in demand­ing that the entire board step down. Wood­ford — who remained a board mem­ber fol­low­ing his ouster, because only share­hold­ers can dis­miss direc­tors — announced in mid-Novem­ber that he would return to Japan to con­front Olym­pus’ board at its next reg­u­lar­ly-sched­uled meeting.

Pri­or to his arrival, Olym­pus announced that Kikukawa, Mori, and Olym­pus audi­tor Hideo Yama­da had all left the board, in addi­tion to hav­ing depart­ed from the com­pa­ny’s exec­u­tive suite. Olym­pus’ remain­ing direc­tors also made pub­lic a pledge to fol­low suit and leave once the com­pa­ny had recov­ered from the scan­dal. But they pro­vid­ed no time­frame for fol­low­ing through on their promise.

After a dis­sat­is­fy­ing meet­ing with the board, Wood­ford announced on Novem­ber 30th that he would resign as a direc­tor of Olym­pus, but vowed to work with stake­hold­ers and share­hold­ers to con­struct a new board. Wood­ford had pre­vi­ous­ly offered to return to Olym­pus as its chief exec­u­tive offi­cer to lead a turn­around, but the board evi­dent­ly had no inter­est in rein­stat­ing him.

On Tues­day of this week, an out­side pan­el appoint­ed by Olym­pus to inves­ti­gate the scan­dal released its find­ings, exco­ri­at­ing Kikukawa and his cronies and vin­di­cat­ing Wood­ford. The report described Olym­pus’ most recent man­age­ment as “rot­ten to the core”. It “infect­ed those around it”, the inves­ti­ga­tors concluded.

Wood­ford praised the report, and renewed his call for change in a state­ment to employ­ees, share­hold­ers, and the press.

Let us hope that the find­ings announced today by the third-par­ty pan­el will help cat­alyze pos­i­tive change at Olym­pus. My over­rid­ing con­cern is the wel­fare of Olym­pus employ­ees and their fam­i­ly mem­bers, of Olym­pus’s long-term share­hold­ers, and of Olym­pus’s cus­tomers. That con­cern will be first in mind as I care­ful­ly eval­u­ate the con­tent of the report that was issued today.

The pan­el’s report has made one thing painful­ly clear: the mas­sive scale of the malfea­sance from which the present direc­tors and statu­to­ry audi­tors per­sis­tent­ly avert­ed their gaze. I sought to call atten­tion to the wrong­do­ing through a series of six let­ters in Eng­lish and Japan­ese, copied to all the mem­bers of the board, and through the sub­mis­sion of a damn­ing report by Price­wa­ter­house­C­oop­ers. Yet not a sin­gle direc­tor stood up in sup­port of my efforts to expose what had tak­en place.

Olym­pus and its share­hold­ers would have incurred far less dam­age if the cur­rent direc­tors had act­ed appro­pri­ate­ly on the clear signs of mis­con­duct that I had explic­it­ly brought to their atten­tion. Now, the work of revi­tal­iz­ing Olym­pus can pro­ceed only under the lead­er­ship of untaint­ed executives.

We at NPI thank Mr. Wood­ford for his courage and his com­mit­ment to Olym­pus’ well-being. NPI has been a loy­al Olym­pus cus­tomer for years, so this scan­dal is of real con­cern to us. (We use Olym­pus cam­eras to pro­duce our pho­to­jour­nal­ism and Olym­pus recorders to cre­ate pod­casts and tran­scribe interviews).

We believe that Mr. Wood­ford is the right per­son to lead a turn­around of Olym­pus. Thanks to his years of expe­ri­ence as a man­ag­er, he knows the com­pa­ny inside out, and he cares about its future. But more impor­tant­ly, he has demon­strat­ed that he is a man of integri­ty. He dared to speak the truth when no oth­er Olym­pus direc­tor would. In choos­ing to chal­lenge Kikukawa, he took a stand for the com­pa­ny’s share­hold­ers and cus­tomers. And last week, he sen­si­bly resigned from Olym­pus’ board after con­clud­ing that it was­n’t going to lis­ten to reason.

We agree with Wood­ford that Olym­pus can recov­er from this dis­as­ter — but only if it rids itself of the crooks and yes men who betrayed its share­hold­ers and customers.

As he put it: “Olym­pus remains a great com­pa­ny that boasts a proud his­to­ry, supe­ri­or human resources, dis­tinc­tive prod­ucts, and unpar­al­leled technology.”

As loy­al and sat­is­fied cus­tomers, we want to see Olym­pus get back up on its feet, rebuild its rep­u­ta­tion, and move for­ward into a new era under new man­age­ment and a com­plete­ly new board of directors.

We will con­tin­ue to mon­i­tor devel­op­ments in the com­ing weeks and months, and sup­port Mr. Wood­ford’s efforts to make Olym­pus whole again.