Michael Woodford's Olympus Book a Must-Read for Japan Inc.

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By William Pesek

If there's any name Japan Inc. never wants to hear again it's Michael Woodford. Good luck with that as the former Olympus Corp. president's memoirs, "Exposure," makes the rounds.

Rather than sweeping Woodford's take on one of history's most audacious frauds under the tatami mat, it should be a must-read for businesspeople, politicians and would-be movers and shakers making their way through high-learning institutions. It's not just about the travails of one Briton leading a 93-year-old corporate icon; it's also about much of what ails the third-biggest economy.

Some quick background: In April 2011, Woodford, a 30-year company veteran, became the camera maker's first-ever non-Japanese leader. He acted on press reports of a massive fraud and raised questions about $1.7 billion in questionable transactions. When he kept pushing, he was fired and then became a whistleblower. When Woodford was vindicated and Olympus bigwigs, including former Chairman Tsuyoshi Kikukawa, were arrested, the company's board denied his request to return and fix Olympus.

Woodford's eminently readable first-person account is about settling scores, but also connecting the dots in an economy that often resembles an M.C. Escher drawing more than what Harvard MBAs are taught. He explains why Japan is standing still as the rest of the world races forward. He confronts the opacity that destroys dynamism and wealth; the groupthink that prizes the status quo over change; how a compliant Japanese media doesn't hold leaders accountable; the lack of women in places of power; the antipathy toward foreign ideas; and a culture that believes a public apology for missteps is punishment enough. All this could be applied as much to Japanese politics as corporate life.

"It's why the world looks on and continues to think that Japan works in a completely different way," Woodford wrote. "It's 'Alice in Wonderland.'"

Most troubling about this tale is that Olympus shareholders were less perturbed by the fraud itself than by Woodford going public. That must change if Japan is to raise its economic game amid China's rise. Ahead of Sunday's national election, Woodford's book should be required reading all around Tokyo.

(William Pesek is a Bloomberg View columnist. Follow him on Twitter.)

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-0- Dec/10/2012 15:17 GMT