Toshiba has announced the resignation of the chief executive and seven other board members in the wake of an accounting scandal. An independent report found that the company had overstated earnings by $1.2 billion over seven years.
In a news conference, Chief Executive Hisao Tanaka said, "I apologize from my heart to all our stakeholders. To clarify management responsibility, I resign my posts as president and member of the board of directors as of today."
In the Japanese culture, it is traditional to bow deeply, particularly when admitting wrongdoing. Tanaka also said, "The responsibility lies in the management, including myself. As a response, I am stepping down from the post as the CEO and president."
The committee that issued the report found "systematic involvement, including by top management, with the goal of intentionally inflating the appearance of net profits." The committee also wrote, "Within Toshiba, there was a corporate culture in which one could not go against the wishes of superiors."
In a company statement, Toshiba promises changes as a result of the committee's findings, including disclosing the investigation report and correcting past financial statements.
- What differences do you see in Toshiba and Toyota's news conferences (in 2010) compared to American companies' public hearings, such as GM's?
- How much confidence do you have in Toshiba after hearing this news? What can the company do to rebuild the brand?