kobe steel corporate governance failures

“These executive officers did not themselves engage in the misconduct,” Kobe Steel stated.Risk management revisited.

In a recent statement, Kobe Steel admitted as much: “Considering the facts relating to the misconduct that were found by the group’s quality self-inspections and the IIC’s investigation, together with multiple compliance incidents in which the company was involved in the past, we must acknowledge that the company is facing deep-seated issues concerning its organizational culture and awareness of its officers and employees, as well as its compliance systems.”In the process of investigating what caused the misconduct, Kobe Steel said it realized the need to perform a complete overhaul concerning its governance, executive team, and operational processes relating to its quality assurance. Are whistleblowing employees treated as nuisance troublemakers or an early warning system and a valuable part of the feedback loop?While the resignation itself sends a strong message about ultimate responsibility, there are still huge questions to be answered, not least of which is: what has been done to ensure that the falsification practices, which date back to the 1970s, have actually stopped?The Kobe Steel crisis should not be viewed in isolation. Kobe Steel is one of the pillars of the Japanese industrial establishment. Kobe Steel, which is a company with an audit and supervisory committee, has five members on its Audit & Supervisory Committee: two inside and three outside members. Estimates suggest that the falsification of data has been on-going for circa 10 years, if not longer.What is impossible to accurately assess is, to paraphrase one of the most famous lines from Watergate, “what the board knew and when the board knew it.”Hi, I'm Richard, the Editor for our Online Content. Falsified quality inspection data for aluminium, copper and steel parts has been supplied to a range of industries across the world, including aircraft manufacturers, carmakers and the construction industry. This is a cultural issue, which also falls under operational governance, because it is the responsibility of the board to set the standard for organisational culture and to know that it is being adhered to.The existing Open Comments threads will continue to exist for those who do not subscribe to Independent Premium. To cite just a few examples, Kobe Steel admitted in 2006 to falsifying soot emissions data from blast furnaces at two of its factories and further was found to have exceeded established limits for ground and water pollution that same year. Consequently, the board at a meeting held March 9 appointed Mitsugu Yamaguchi as the new CEO and president.The company’s troubles have only just begun: Kobe Steel CEO Hiroya Kawasaki has resigned, effective April 1. According to Kobe Steel, the misconduct was provoked by certain issues relating to quality management processes, such as inspection processes enabling data falsification or fabrication, isolated and rigid operational systems, and the establishment of internal standards to which it was impossible to conform.Kobe Steel announced its intent to make other governance changes as well, including ensuring that at least one-third of its board members are independent outside directors.

Due to the sheer scale of this comment community, we are not able to give each post the same level of attention, but we have preserved this area in the interests of open debate. One of Japan’s largest companies is now on its knees, with enormous damage to its corporate reputation, a collapsed share price and the potential for decades of costly litigation.

Kobe and the Japan Codes of Corporate Governance and Stewardship.

That is a cultural issue, which falls under operational governance.CEO Today Online and CEO Today magazine are dedicated to providing CEOs and C-level executives with the latest corporate developments, business news and technological innovations.It is clear is that there has been chronic institutional failure and the board must take ultimate responsibility.

What’s more, The European Aviation Safety Agency has already advised aircraft makers to buy steel from alternative sources and the United States Department of Justice is investigating.Crucially, can whistleblowers bring matters to senior managers and the board without fear of losing their job or being denied promotion?Welcome, Login to your account.For those who haven’t been following the story, the facts are these.
Kobe Steel revealed almost 700 instances of "misconduct" and admitted it had "deep-seated issues" around corporate culture and compliance, though no safety issues have been reported.

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