Toshiba - Corporate Governance Failure.pdf
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Toshiba faced a major corporate governance failure due to inappropriate accounting practices that overstated profits by billions of yen over several years. An investigation found accounting misconduct across multiple business units dating back to 2008 that ultimately led the resignation of three top executives. Weak internal controls and auditing failures allowed this misconduct to continue unchecked for years. The scandal had widespread implications, damaging trust with stakeholders and resulting in a major loss, lawsuits, job cuts and other fallout for the company.
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Toshiba - Corporate Governance Failure.pdf
- 2. Table of Content Trouble Timeline 06 How it Started 07 Pressure 09 Ethical Responsibilities 11 Audit Failure 15 Whistleblower 18 Company Culture 20 Stakeholder Implication 24 Conclusion 26
- 3. 9 About the Company Japanese Multinational Conglomerate Founded in 1875 9th Largest Semi Conductor Manufacturer Japan's largest producer of Electronic Goods
- 5. 17th Mar Toshiba reveals use of inappropriate accounting practices in relation to infrastructure project; establishes special Investigative committee 3rd April 21st July 28th Sept 21st Dec 4th Jan TOSHIBA TROUBLES Timeline President and CEO Hisao Tanaka, Vice Chairman Norio Sasaki, adviser Atsutoshi Nishida resign Toshiba announces sale of Toshiba Medical Systems to Canon for 665.5 billion yen Westinghouse Electric announces acquisition of CB&I Stone & Webster completed on Dec. 31 Toshiba announces estimated net loss of 550 billion yen, its largest ever, for year through March 2016 Toshiba sells entire stake in Topcon for 49.1 billion yen ($435 million). 16th May Toshiba announces nomination of Satoshi Tsunakawa as president, CEO, former WH President Shigenori Shiga as chairman 14th Feb 27th Jan 18th Jan 27th Dec Toshiba announces 712.5 billion yen impairment charge on its nuclear operations. Toshiba officially announces spinoff, nuclear business dropped as area of focus. Toshiba confirms media reports that it plans to spin off memory business Toshiba announces possibility goodwill impairment for U.S. nuclear business will reach hundreds of billions of yen. 2015 2016 2017
- 7. Overview On July 2015, Toshiba CEO Hisao Tanaka announced his resignation in the face of an accounting scandal tied to about $1.2 Billion in overstated operating profits. Investigators found direct evidence of inappropriate accounting practices and overstated profits in multiple Toshiba business units, including the visual products unit, the PCC unit and semiconductor unit. This accounting misconduct began under CEO Atsutoshi Nishida in 2008 amid a GFC out deeply into Toshiba profitability. continued also under Norio Sasaki and ended under Tanaka.
- 8. 02 Pressure
- 11. Where do Ethical Responsibilities Lie ?
- 14. 04 Audit Failure
- 15. Failures
- 16. Failures
- 18. Whistleblower
- 20. Company Culture
- 21. Company Culture
- 22. Company Culture
- 24. Implications Shareholders Lack of trust Stock Price decreased by 40% Removed from Japan Stock Index Lawsuits Employees Loss of jobs Headcount from 2,17,000 to 1,83,000 Cut 30% jobs from customer electronic.
- 25. 08 Conclusion
- 26. Conclusion
- 27. THANK YOU.