Corporate DispatchPro ANTONY CURRIE VIA REUTERS BREAKINGVIEWS
Toshiba CEO exit gives better governance a chance Error-prone Toshiba (6502.T) has yet another chance to get things right. Chief Executive Nobuaki Kurumatani resigned on Wednesday after a series of controversial missteps cost him the support of investors and staff. His ties to buyout bidder CVC Capital Partners may have caused problems in the boardroom, too. There’s a chance now to get the corporate governance right.
Kurumatani, who arrived following an accounting scandal and the collapse of the company’s U.S. nuclear business Westinghouse, was already in a precarious position when he only narrowly secured re-election at the company’s annual meeting last year. Some uncounted postal votes caused concern as did reports that Harvard University’s endowment fund was pressured into not casting a ballot. In a rare victory for pushy investors in Japan, Toshiba shareholders voted last month in favour of an independent investigation into the affair. The disarray made Toshiba vulnerable. It has attracted what the company called an unsolicited approach from CVC, at $20 billion as reported by media. Another cause of concern is that the suitor is Kurumatani’s former employer. And according to Toshiba director Osamu Nagayama, the proposal envisioned keeping Kurumatani in charge. Moreover, another CVC executive, Yoshiaki Fujimori, sits on Toshiba’s board, having joined after Kurumatani became the boss. Toshiba could have set up an independent committee to scrutinise the bid, but such chummy relationships look bad. And Kurumatani already had clouds hanging over him. 55
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