Months after the Olympus’ ex-CEO-turned-whistleblower began demanding their resignations, the entire board of directors of the scandal-ridden Japanese electronics maker is finally stepping down, the company said today.
“[A]ll the current directors and corporate auditors express their intentions to resign at the end of the extraordinary general shareholders meeting and have submitted letters of resignation to the Company,” Olympus announced in a statement.
The company also said that it was proposing a slate of eleven individuals to be ratified by shareholders as the new board of directors. Fifty-six year old Hiroyuki Sasa, who currently serves as the chief marketing officer for Olympus’ medical imaging unit, has been tapped to serve as the company’s new president.
If the proposed new board is elected, the number of what Olympus terms “outside directors” will double, from three to six.
But major Olympus shareholders say the new slate isn’t independent enough. “The clear creditor orientation of the board is unacceptable,” Southeastern Asset Management, which owns more than five percent of Olympus’ shares, said in its own statement, attributed to vice president Josh Shore. “We are extremely disappointed with the composition of the proposed board.”
Olympus’ former chief executive, Michael Woodford, who uncovered the accounting scandal that has wiped out much of the value of the company’s stock and led to the arrests of several former Olympus directors and auditors, told Reuters that he agreed with Southeastern’s concerns.
“Looking at capital raising, to have a representative of the bank there as the chairman will only frustrate and alienate any independent foreign shareholder, and I’m sure shareholders in Japan… It’s completely and utterly wrong,” he said.
In a statement posted to Olympus Grassroots earlier this month, Woodford said he was keeping a close eye on the current disgraced and discredited board, but criticized its members (who are finally quitting Olympus) for not being more open about their plans to replace themselves.
I am monitoring events at Olympus extremely closely. Over recent days there have been many rumours about the company forming a so called ‘strategic alliance’, but the name of any such external party has not been confirmed by the company. Equally, we remain unclear in definitive terms as to whether any of the current directors plan to put themselves forward again on a new slate and also the names and backgrounds of new candidates. I have strong opinions on both these issues, as I’m sure do many thousands of other shareholders.
In relation to today’s announcement of an extraordinary shareholders meeting on April 20, my intention is currently to attend this and, I believe it will be attended by large numbers of small shareholders including company employees.
In this respect, I trust the company will make arrangements for a suitably large venue (not as in previous years at the Keio Plaza) to allow all shareholders small, large, domestic and from overseas, to have a forum in which to speak out openly as they feel fit.
This will be the first formal opportunity for all the company’s shareholders to question and hold its management to account. Of course investigations on three continents are ongoing and we are therefore still not in a position to know the full extent of what took place but before the extraordinary general meeting, I believe it is highly likely there will be further revelations and all interested parties should continue to closely scrutinise events.
– Michael Woodford, February 5th, 2012
The departure of Olympus’ current, corrupt board is long overdue. The company needs fresh blood at its helm to begin rebuilding investor and customer confidence. And it needs to take seriously the concerns of foreign shareholders, not ignore them simply because they do not own a major stake in the company.
It is our hope, as loyal Olympus customers, that the company will emerge from this dark chapter in its history by listening to stakeholders, stamping out cronyism, and triple-checking the veracity of its financial statements. More than anything else, Olympus needs accountable management to get it back on track.