16. January 2013
David Grayson
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One Word of Truth – David Grayson on Michael Woodford’s “Exposure” (Portfolio Penguin, 2012)

“One word of truth outweighs the whole world.” Those words, from the Russian novelist Alexander Solzhenitsyn’s Nobel Prize speech, resonated with me back in the early 1970s as a teenager with an emerging political consciousness. Indeed, geek that I was, I learnt the entire speech by heart!

I was reminded of “One Word of Truth” when I read the new book, “Exposure” by Michael Woodford, ex CEO of the Japanese headquartered company, Olympus. I was given the book by a good friend as a Christmas gift. I had been intending to buy it since it was first published but somehow had not got round to getting it. If you are in a similar “good intentions situation”, don’t delay! Get “Exposure” and read it!

“Exposure” is the story of Woodford’s lonely campaign to expose a massive cover-up at Olympus designed to hide losses on an industrial scale from high-risk trading on financial instruments, which had gone spectacularly wrong.

Reviewers have previously commented that “Exposure” reads like a John Grisham thriller. Indeed, as the scene shifted regularly from Tokyo, to London, to Southend (where Woodford’s family lived) and to New York and back, you could easily imagine the screen-play for the already planned movie.

Michael Woodford experienced a dramatic transformation from Olympus’ golden boy, to CEO, to whistle-blower and outcast. He fought hard to get back the CEO role that the Olympus board had stripped him of for “disruptive management practices”. It was not to be. For now, he is writing and describing his experience in interviews and talks around the world. Will he bounce back into another CEO role or become unemployable, as some previous high-profile whistle-blowers have found? Time will tell. Meantime, “Exposure” provides important lessons for board directors as well as would-be whistle-blowers.

Woodford was ultimately able to expose the fraud and cover-up at Olypmus, by being able to show a meticulously annotated and documented audit trail of memoranda to the Olympus board. A powerful reminder to any NED (non-executive director) about the importance of keeping careful contemporaneous notes of telephone calls, meetings etc.
Woodford’s experience also shows the importance of persistence and of trusting your instincts and not being easily fobbed off by nominal superiors. For Woodford, this was especially hard because it meant confronting the man who had been at Olympus and who had selected Woodford as his successor as CEO.

There are echoes of Greek Tragedy as Woodford wrestles with the realisation that his work father-figure is deeply implicated in a multi-billion fraud and cover-up.

For fans of the transformational potential of social media and the implications that this has for the “Naked Corporation” (Don Tapscott’s argument that the new communication technologies compel organisations to be transparent), “Exposure has some compelling examples of Woodford’s use of social media, such as an on-line chat forum for a Q&A with employees.

Previous reviewers have commented on the stresses and stains that Woodford’s whistle-blowing put on his marriage and his family. Whilst this is true, it is also striking how Woodford emphasises how crucial were old friends in supporting him and his family through the tough times.

Finally, being interested in what makes the “whole person” tick and what individuals think is important to count life a success, it is instructive to see that, even as a busy CEO, Woodford still made time to campaign for road safety. A cause he explains, close to his heart as a result of witnessing a fatal road accident in his youth.
This article was first published at Doughty Centre for Corporate Responsibility at the Cranfield School of Management.

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