Elizabeth Stapp, CESR Instructor, comments on the demise of a whistle blower.
In BCOR 3010, Business Applications of Social Responsibility, we begin the semester looking at our values, ethical decision-making, moral relativism, and defining moments.
When former President of Olympus Michael Woodford blew the whistle on corporate fraud, he became acutely aware of the messy, real-world relevance of those concepts.
Woodford, an Englishman, was the first non-Japanese president of Olympus, which produces cameras and medical equipment. He was chosen to run the Japanese company for his strong leadership skills. Yet, it was precisely his strong leadership style and sense of honesty that cost him his job. Further, it was his misunderstanding of moral relativism, local culture, and the Japanese tradition of insular corporate management that led to his demise.
When Woodford discovered three potentially questionable acquisitions and a questionable $700 million payment to the Cayman Islands- ostensibly for advice relating to a transaction occurring 2 years prior- he attempted to alert the board and management. When Woodford entered a board meeting to discuss his concerns, the meeting’s original agenda was scrapped. It was replaced with a singular agenda item: the dismissal of Michael Woodford as president, CEO, and regional director.
Mr. Woodford faced a defining moment at Olympus: a conflict between his values of honesty and leadership and the workplace culture of Olympus, which centered around deference and lack of diversity. He followed his values and blew the whistle on fraud. But, whistle’s blaring fell on deaf ears.
Read his account of the incident here.