Corporate governance lessons from the fall of Toshiba

Toshiba’s downfall holds lessons in corporate governance. Some such lessons have been highlighted by a legal expert, Ibrahim Kitoo, in Business Daily, Africa. Rising to global prominence in the 1980s and 1990s, it took 70 years for Toshiba to reach its peak and only a decade to plummet.

Professor Ulrike Schaede from the University of California, who has extensively researched Japanese conglomerates, describes Toshiba’s culture as one where decisions are made to please the boss rather than pursuing good ideas. The investigation committee set up by Toshiba gave out a 334-page report revealing manipulated profits and non-strategic acquisitions.

Toshiba recently delisted from the Tokyo Stock Exchange after 74 years, going private in an 11 billion-pound deal amid activist investor pressure. This situation prompts a reflection on the need for organisations to transform rapidly or face disruption. The emphasis is on adopting the right strategy, moving from opportunism to evaluating and seizing the right opportunities.