Japan has suffered from a number of high-profile scandals involving financial fraud in the past 12 months, as AIJ Investment Advisors, SMBC Nikko Securities, and Nomura have all made headlines with investigations leading to criminal charges and executive resignations. Michael Woodford, author of Exposure: Inside the Olympus Scandal, had a key role in one such scandal involving Olympus corporation. In an interview with Business Insider, he discussed whether repeated financial fraud is a problem specific to Japan:
“I’m not going to say greed and wrongdoing is unique to Japan. There are scandals in Europe, Siemens, Worldcom, Enron. Human nature is what human nature is. Individuals will act in a way that is wholly unacceptable. That’s not exclusively Japanese.”
In the Business Insider interview, Woodford went on to note that the “culture of deference and obedience” specific to Japan has created a favorable environment for unethical individuals to commit financial fraud without punishment.
Woodford became CEO of Olympus corporation in September 2011. By October, he had been removed from his position after exposing more than US$1 billion in financial fraud committed by top Olympus executives. Criminal charges were eventually filed against Olympus chairman Tsuyoshi Kikukawa and others, while Woodford and Olympus settled a wrongful dismissal lawsuit out of court.
Woodford has been named the 2011 Business Person of the Year by the Sunday Times, the Independent, and the Sun and was named as one of the “People Who Mattered” in 2011 by TIME. He was also honored by the Association of Certified Fraud Examiners with the Cliff Robertson Sentinel Award for his role in exposing the Olympus financial fraud.
Woodford will be discussing his experience at the 66th CFA Institute Annual Conference in Singapore. You can register to attend the conference and follow this blog for more speaker updates as the event draws closer.