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December 2, 2011 5:24 pm
In March, the Japanese highway authority received an unusual letter from Michael Woodford, a 50-year-old Briton who was about to become president of Olympus, the Tokyo-based manufacturer of cameras and endoscopes.
Mr Woodford, a longtime advocate for road safety who had moved to Japan only a month before, had taken a weekend drive with a friend to a hot springs. On the way, he noticed a problem at a rest stop: the large car park contained no stop signs, and vehicles coming off the road were navigating it at dangerous speeds. There could be an accident, he said in his letter, before suggesting ways designers might change the car park to slow down incoming cars. The highway authority has since added signs and speed bumps at the rest stop.
That mix of righteousness and initiative has characterised Mr Woodford’s leadership of Olympus. This summer, alerted by an exposé in a Japanese magazine, he began questioning other executives about more than $1bn that seemed to have disappeared in acquisitions carried out under his predecessor. Olympus fired him on October 14, so he went public, sending its share price into a tailspin.
Eventually, the company admitted using the deals as cover to dispose of investment losses that it had been hiding since Japan’s stock and property bubble burst in the 1990s. Its chairman and two other executives lost their jobs and police and regulators in Japan, the US and the UK are investigating. This week Mr Woodford called for an emergency shareholders meeting, in the hope of winning investor support for an entirely new board.
Koji Miyata, a retired Olympus executive who championed Mr Woodford’s unlikely rise, highlights his “relentlessness”, saying “he is the exact opposite of a consensus-seeking Japanese”.
Mr Woodford left school at 16 in Liverpool, where he and his mother had fallen on hard times after his parents divorced. “We went from being middle class to a house that had no bath and a toilet outside. You had to go to the public baths once a week,” he says. At 21, he was hired by KeyMed, a London firm that distributed Olympus endoscopes and was part-owned by the Japanese group.
Albert Reddihough, KeyMed’s founder, recalls him as quick to learn but sure of his opinions. Mr Reddihough promoted him quickly, and when he retired in 1990 he recommended Mr Woodford, then just 29, as his successor.
“At first Olympus said no, that he was too young, so he went to Japan to make a presentation. He was rigorous in his preparation,” he says. Olympus acquiesced, and Mr Woodford eventually went on to run the group’s European operations, where he slashed costs and made the region Olympus’s most profitable.
Many now wonder why Olympus picked Mr Woodford to come to Japan. He does not speak Japanese, and a prevailing theory – shared by Mr Woodford himself – is that the chairman, Tsuyoshi Kikukawa, saw him as a pliable foreigner from whom it would be easy to keep secrets.
Yet twice in Europe he had reported miscreant Olympus officials to the authorities – once for bribery and once for embezzlement. “If they didn’t know what he was like,” Mr Reddihough says, “then they really were stupid”.
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