Few Japanese companies are as old as Toshiba, or even apologize these days. The most well-known technological conglomerate with a vast history of 145 years, it was once one of the best known in the world. 20 most valued companies..

However, due to the accounting scandal and the collapse of the US nuclear industry, Toshiba was demoted from the main section of the Tokyo Stock Exchange. Issuance of $ 5.4 billion in new shares It brought together activist foreign investors who wanted to strengthen accountability and improve returns as the government of Japan promoted governance reform as a way to boost growth.

Toshiba responded, at least on paper. Appointed foreign independent director for the first time in around 80 years, and in JanuaryTransform your corporate culture“.

A Fucking new poll Make it clear that these promises were empty. Instead of working with investor criticism, management turned to dark art to defeat them. When Nobuaki Kurumatani, then CEO, and other directors faced a close vote for re-election at last year’s annual meeting of shareholders, the company clashed with senior government officials and made pressure on major shareholders. Gift of Harvard University – Don’t vote against them. He also revealed that 5 million votes belonging to Singapore-based 3D, one of the largest shareholders, had not been counted.

The company has faced the current humiliation by turning down another large investor, Effissimo, by calling for an independent investigation into the AGM vote. Toshiba claimed that its own investigation did not reveal any fraudulent activity. At the extraordinary general meeting of shareholders in March, the majority of shareholders Voted for an independent poll, A rare defeat for Japanese management.

Now, the report of the result has put Toshiba in crisis. He resigned in April and was already gone. Osamu Nagayama’s chair Faced with a call for his resignation..Meanwhile, private equity funds are running: CVC $ 20 billion supply KKR and Brookfield were reportedly puzzled by the acceleration of Kurumatani’s dismissal in April.

Neither the company nor the credibility of Japanese corporate reforms can get things done like Toshiba. The total return of Topix Core30, the largest company in the country, is 44% to 134% in 20 years, far behind the larger index. Critics say they operate for management and establishment, not for shareholders.

At Toshiba, stocks are finally back to what they were before the 2015 accounting scandal, hoping that activist pressure would encourage reforms or private equity sales. Four executives were kicked out on Sunday, including one who called on the government to “beat” annoying Toshiba shareholders and the chairman of the audit committee, who allegedly misunderstood the board of directors over the first internal investigation. It was. It barely scratches the surface.

Toshiba has seen three financial scandals in the past six years, and the government has stepped in at least twice to help management dodge investor challenges. If this was a transformed corporate culture, what was the old one?

Investors have another opportunity to show Japan the implications of putting shareholders first at next week’s annual shareholders meeting. This year, with the ISS Interim Advisor Lewis Glass We encourage the chairman and several other directors to vote against.

Toshiba shareholders are expected to vote against the entire board. A third investigation is promised. Once it becomes clear who the board knows what, investors should demand a new list with clean hands. We have to include five candidates backed by 3D and Effissimo, who lost in the Dark Art campaign last year. With the support of shareholders, they should have a backbone to meet the management challenge.

After that, the new board must seriously consider the private equity offers. If they are scarce, Toshiba needs a new CEO who is confident that he will stop seeking industrial skills and government protection to reduce costs and increase profits. Like Takeda, Mitsubishi Chemical, and JSR, it may be necessary to search outside of Japan. “Foreign CEOs can do things other CEOs can’t,” said Alicia Ogawa, head of the Japan Corporate Governance Project at Columbia University.

In Japan, fund managers rarely revolt for fear of disrupting government and corporate pension funds. BlackRock voted against Japanese-style management 6% of the time last year, 9% of the world. In March, he was Toshiba’s largest shareholder to support the direction of the research team. It is not time to be careful now.

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