The FT comments on what seems to be a string of scandals in Japan. It is our opinion that such governance or compliance issues are not necessarily more frequent than in other developed nations – it is difficult to compare – , but (1) they arise from different gaps in governance and management structures; and (2) whistle-blowing is becoming more frequent in Japan.
”From carmakers and electronics groups to housebuilders and the constructors of the nation’s roads and runways, a government-led transparency drive has accelerated a record surge of accounting and data fraud scandals across corporate Japan.
In the five years since a $1.7bn accounting scandal was uncovered at Olympus, the number of improper accounting cases exposed each year in Japan has nearly doubled. It hit an alltime high of 58 cases in the 2015-16 fiscal year, according to Tokyo Shoko Research, which provides data on corporate failures.
In many cases, the revelations have shone a light on malpractice and subterfuge dating back years — the legacy of management terrified of failure but left fighting decades of economic stagnation, squeezed costs and a shrinking domestic market……….”
Read full article here.
Source: Financial Times
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