engelberg - Toshiba

V.   FUTURE RECOMMENDATIONS 

While  Japan has taken some crucial steps towards improving corporate 

governance, additional reform must be done in order to effectively change 
current corporate practices and legitimize regulators enforcement efforts of the 
SC and CGC. In order to stop future accounting fraud, the current corporate 
power structure must be abolished through powerful incentives. 

As previously discussed, the concept of makoto  and groupthink deter 

whistleblowers. Thus, offering an incentive may help increase reporting of 
misconduct and decrease abuses of power. Currently, Japan does not offer 
much protection for whistleblowers and has done little to prevent employers 
from retaliating.91  The current law for whistleblower protection does not 
penalize or punish companies for retaliation against employees, and any fine 
levied is minimal.92 

With the potential negative backlash involved with becoming a 

whistleblower, employees often choose not to report corporate misconduct in 
exchange for advancing their careers.93  Japan should consider methods 
employed by the United States, such as rewarding corporate whistleblowers 

89  See  Taiga Uranaka,  Japan Securities Watchdog Recommends Record $60 Million Fine for Toshiba, 

REUTERS 

(Dec. 7, 2015, 10:06 AM), 

http://uk.reuters.com/article/ustoshibaaccountingfineidUKKBN0TQ0IY20151207.  
 

90  Id.  

91  See  Akihisa Shiozaki & Peter Coney, The Olympus Effect? Recent Changes to Whistleblower Law 

Regime,  INT’L  LAW  OFF.  (Aug. 3, 2015), http://www.internationallawoffice.com/Newsletters/White-Collar-
Crime/Japan/Nagashima-Ohno-Tsunematsu/The-Olympus-effect-Recent-changes-to-whistleblower-law-
regime.  
 

92  Morgan, supra note 7, at 179. 

93  See  Anna Kitanaka & Isabel Reynolds, Toshiba Case Points to Whistleblower Law’s Shortcomings, 

JAPAN TIMES (Jul. 24, 2015), http://www.japantimes.co.jp/news/2015/07/24/national/crime-legal/toshiba-case-
points-whistleblower-laws-shortcomings/#.VsC1WPIrKVM.