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Toshiba shareholders have prolonged the “instability and uncertainty” in Toshiba conglomerate with problems with his shock vote to remove the chairman of the company’s board of directors, said a director who saw no choice but to resign after last Friday’s investor revolt.
In exclusive statements to the Financial Times following his sudden resignation on Friday, George Olcott expressed strong suspicions about the vote to dismiss Osamu Nagayama – A man he described as one of the few Japanese business leaders able to oversee a change in scale that Toshiba now requires.
“Removing him as president only serves to prolong instability and uncertainty, as well as depriving the board of a prominent leader. I can’t understand how this development represents a good outcome for the company or any of its stakeholders, ”said Olcott, a former SG Warburg investment banker who serves on the boards of several Japanese companies.
His statements came after Toshiba’s annual general meeting (AGM) last Friday, held after months of deep turmoil for the company and a period of unprecedented victories for shareholder activists operating in Japan.
The withdrawal of Nagayama by shareholders in the AGM followed the request of some investors to withdraw the entire board as a result of the repeated leadership failures of a company that many see as rich with valuable technology and growth potential. .
“I think Nagayama’s plan to raise a new course for Toshiba to improve its corporate value was ambitious but achievable and I was looking forward to helping him and the board in that endeavor,” Olcott said.
But others strongly rejected Olcott’s warning of instability to Toshiba, saying instead that despite the disorderly process, the past two weeks had removed the main lightning rods of shareholder distrust of Toshiba’s leadership.
Raymond Zage, non-executive director of Toshiba, said the immediate aftermath of last Friday’s AGA had put the board 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 confidence in our shareholders and independent investigation confirmed that this loss of confidence was justified. We are fully focused on the need to restore that confidence and also on the importance to provide stability and certainty to our employees and customers, ”Zage told FT.
Nagayama’s withdrawal on Friday forces Satoshi Tsunakawa, the company’s interim chief executive, to act as chairman of the interim board until Toshiba can convene an extraordinary general meeting to appoint a new management team that includes at least four new board members. non-executive.
The AGM followed the publication this month of a explosive independent report to the events surrounding Toshiba’s 2020 annual meeting. The report was a 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 large institutional shareholders told the FT that they could not justify voting for Nagayama’s new appointment.
Although Nagayama took over as chairman of the board and head of the nomination committee after the 2020 AGM, they argued that he should be responsible for handling Toshiba’s investigation, which concluded that there was no there were problems.
But other figures have also entered the debate in his defense, including John Roos, Barack Obama’s former ambassador to Tokyo, who issued a statement to the AGA praising Nagayama as “an agent of positive change, not a protector. of the status quo. ”
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