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Business trends

Japan Post scandal shows external directors unable to do their jobs

Lack of communication, skepticism and risk management put Japan Inc in harsh light

The resignations of group presidents Kunio Yokoyama, left, Masatsugu Nagato, and Mitsuhiko Uehira have done little to explain how the Kampo insurance scandal was allowed to fester. (Photo by Arisa Moriyama)

TOKYO -- The insurance sales scandal that this week chased three presidents from Japan's postal services group has cast a harsh light on external directors' ability to spot illicit corporate activities.

On Dec. 27, the Financial Services Agency ordered Japan Post units to suspend parts of their operations for three months. The group later announced the resignations of three company presidents, including Masatsugu Nagato, president and chief executive of Japan Post Holdings.

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