Excerpt:Audit Committee under scrutiny
Toshiba was considered a reform pioneer, first appointing independent directors in 2001. But the company's five-person audit committee – of which two members were former Toshiba executives and two others lacked any business experience whatsover – was a classic study of Japan's corporate insider culture that can often create compliant committees under the thumb of management. …..While the accounting errors probably would have been hard for any audit committee to spot if managers wanted to keep them hidden, this committee composition could not possibly have helped, say Nicholas Benes, Representative Director of the Board Director Training Institute of Japan.
Excerpt: “….. It will be interesting to see what lessons are drawn from Toshiba's failure. Problems with Toshiba's seemingly well-considered hybrid approach to governance clearly illustrate the tension and difficult tradeoffs between insider and outsider perspectives.
Excerpt: “The vast firm, which had sales of 600 billion yen last fiscal year, hired outside directors and adopted a 16-member board a decade ago, among other changes, to “enhance management efficiency and improve transparency”.