It all started from a boardroom battle.

This Olympus scandal had cost both men their jobs,

company’s stock market value, it put a spotlight on the weak corporate governance at a top-tier
Japanese company. Going into details of the Olympus scandal we figured out that there were
some room for decisions, if we were the decision makers. Let’s look into some of them:

Analyzing company’s corporate governance

Prior to Mr. Woodford’s appointment as a president he dint discuss about any terms or anything
with Kikukawa. And soon realized that he lacked the power to make fundamental decisions. Not
only this, Mr. Kikukawa used to control all the top management and board members like a
puppet master. These are all results of weak corporate governance and before accepting the offer
for any such position we would have analyzed the company’s corporate governance and culture
precisely. It helps a CEO/COO to forecast his performance according to the board member’s
expectation and what are the challenges he will face or changes he needs to make within the
organization.
Creating democratic and freely speak up culture:
Olympus had a corporate culture where employees could not freely speak up. Woodford’s
employees were strictly asked not to disclose anything to him by Kikukawa. A democratic and
free work environment for employees were needed to take decisions, raise flag, saying NO to
any wrongdoings and everything for the betterment of organization.
Reducing communication block between employee and top management
The gap of power between Top management and employee was wide. It was not easy to
employee to object and correct such misuse practice from their “boss”. However, we would have
taken decision to increase power of employees to correct and raise objections to their “boss” and
reduce the abusing power in the top management.
Brushing up Long term employment culture
The noble concept behind long term employment was converted according to the management’s
interest. Long term employment culture tend to be misused by the top management to create no
democracy culture, they could easily pressure the employees to not speak-up. We would have
revamped the long term concept in front of employees and motivated for the organization’s to
healthy & honest growth.

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Incentivizing top managements
Giving incentives to the top management, would compel them to work harder to improve
corporate performance and take shareholders' interests more to heart.
Bringing in Outside directors
Olympus’s board was typically stacked with insiders. It is said that that too much control was
given to internal members. To avoid these problems of members’s having their own interests in
mind, above company interests, the Board should be dominated by a majority of external
members.
Deploying external auditors
Kikukawa allowed few employees from accounting & investment dept. to commit the fraud. It is
clear that the internal company auditors did not discover and rectify the wrong. They spoiled
proper audits by providing incomplete documents and statements to its external auditors. Our
decision would be deploying experienced external audit firms and closely monitoring the
process. Also, making sure the audit process takes place half yearly.