Toshiba's Accounting Scandal- A Spotlight on Japan Inc’s Corporate Governance Systems

On July 21, 2015, Hisao Tanaka (Tanaka), President and CEO of Toshiba Corporation (Toshiba), resigned from his position for his alleged involvement in encouraging irregular accounting practices at Toshiba. While submitting his resignation, Tanaka apologized to shareholders, but claimed that he had not encouraged such accounting practices. He said, “Increasing profits is important, but it must be grounded in a basis of fair accounting.” Along with Tanaka, two former CEOs, Atsutoshi Nishida (Nishida) and Norio Sasaki (Sasaki), also resigned from their positions for their alleged involvement in the scandal .