Toshiba shareholders have prolonged “instability and uncertainty” in turbulent agglomeration With them Shocked vote To dismiss the company’s chairman, said one director who had no choice but to resign after last Friday’s investor revolution.
In exclusive comments he gave to the Financial Times following his surprise resignation on Friday, George Olcott expressed his grave concerns about the vote to be ousted. Osamu Nagayama A man he described as one of the few Japanese business leaders able to oversee a turnaround on the scale now required by Toshiba.
His removal from the position of president will only perpetuate instability and uncertainty as well as deprive the board of a prominent leader. “I cannot understand how this development represents a good outcome for the company or any of its shareholders,” said Olcott, a former investment banker at SG Warburg and a member of the boards of several Japanese companies.
His comments come on the heels of Toshiba’s annual general meeting (AGM) last Friday – which was held after months of deepening turmoil for the company and a period of unprecedented triumphs for shareholder activists operating in Japan.
Nagayama was removed by shareholders at the AGM following calls by some investors to impeach the entire board as a result of repeated leadership failures in a company many see as rich in valuable technology and growth potential.
“I believe Mr. Nagayama’s plan to chart a new path for Toshiba to improve its corporate value was ambitious, but achievable, and I looked forward to helping him and the Board of Directors in this endeavour,” Olcott said.
But others vehemently dismissed Olcott’s warning of instability at Toshiba, stressing instead that despite the chaos of the process, the past two weeks have removed major thunderbolts of shareholder distrust of Toshiba’s leadership.
Raymond Zag, Toshiba’s non-executive director, said that following last Friday’s AGM, it put the board of directors in a state of unity and clarity on issues that need attention.
“The root cause of the instability in Toshiba is the result of a loss of trust from our shareholders, and the independent investigation has confirmed that this loss of trust is justified. We are fully focused on the need to restore that trust and also on the importance of providing stability and certainty to our employees and customers,” Zag told the Financial Times.
Friday’s dismissal of Nagayama forces the company’s interim CEO, Satoshi Tsunakawa, to step in as interim chairman of the board so that Toshiba can convene an extraordinary general meeting to appoint a new leadership team that includes at least four new non-executive board members.
The General Assembly followed this month’s issue of Explosive independent report In the events surrounding Toshiba’s 2020 annual meeting, the report alleged collusion between the company and the Japanese government to suppress activist shareholders.
In the days leading up to last Friday’s general meeting, a growing number of major institutional shareholders told the Financial Times they could not justify a vote on Nagayama’s reappointment.
While Nagayama took on his roles as Chairman of the Board of Directors and Chairman of the Nominating Committee after the 2020 AGM, they argued that he should take responsibility for handling Toshiba’s own investigation, which concluded that there were no problems.
But other figures have also entered the controversy in his defense, including John Ross, Barack Obama’s former ambassador to Tokyo, who issued a statement before the Ordinary General Assembly praising Nagayama as “a positive agent of change, not a protector of the status quo.”