The messy firing of Olympus CEO Michael Woodford provides another example of the challenges in communicating an executive exit.
The Japanese camera and medical-imaging company last week fired Woodford, its first non-Japanese CEO, after less than a year. In announcing his dismissal, Olympus cited Woodford’s inability to work effectively with Japanese managers and chairman Tsuyoshi Kikukawa, the former CEO. Woodford countered today, saying he was fired for raising questions about advisory fees paid by Olympus when it bought Gyrus Group, a UK company, three years ago.
It’s been a rough few months for CEOs. Since the beginning of the year, 922 CEOs have left their posts, according to data from Challenger, Gray & Christmas. September saw the departure of 108 CEOs, a 12-month high that included high-profile oustings at HP, Yahoo and Bank of New York Mellon.
But what makes the Olympus situation different from the norm is Woodford’s allegations of wrongdoing when Kikukawa was at the helm and the existence of an independent report by PriceWaterhouseCoopers that appears to support Woodford’s assertions. Woodford has reported the matter to UK regulators.
For Olympus, which as seen its stock plunge by more than a third since the announcement of Woodford’s departure, the crisis shows no sign of easing. It was unable to answer analyst and investor questions satisfactorily in a private call, so pressure on the stock will continue. And the clash between an entrenched Japanese chairman and a brash outsider is a familiar narrative that will keep the story in the news. Olympus probably will need to communicate more, not less, to end the crisis – a course seldom taken by Japanese companies.