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Toshiba's then-President Hisao Tanaka bows at a news conference in 2015 after the release of a third-party commission's report pointing to problems with internal controls. (Photo by Keiichiro Asahara)
Business trends

How Toshiba's closed culture bred systematic cover-ups

The failure of internal controls to function properly has cost the company dearly

TAKAFUMI HOTTA and KAZUE YASUHARA, Nikkei staff writers | Japan

TOKYO -- Toshiba has proved an inspiration for oversight at listed companies, just not in the way the conglomerate might have hoped.

In February 2016, the Japan Exchange Regulation, part of the Japan Exchange Group, laid out principles regarding how Japanese corporations should behave when faced with a corporate scandal. One of them states that: "Companies should avoid dressing up a shoddy and insufficient investigation to give it the appearance of objectivity and neutrality."

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