Toshiba scandal exposes Japan Inc's governance flaws

Tokyo

TOSHIBA'S billion-dollar accounting scandal has shone a light on a corporate culture in Japan still beset by collusion in its senior ranks, unquestioning employees and poor external controls, experts say.

The vast 140-year-old conglomerate was hammered this week by embarrassing revelations that top executives pressured underlings to inflate profits by about US$1.2 billion since the 2008 global financial crisis.

An independent report, which found senior managers complicit in the affair, pointed to the rigid system that powered Japan's post-war boom - lifetime employment in exchange for complete loyalty to the company.

"If you look at management, you generally find people over 50 who have spent their career at the company, climbing up through the ranks," said Keio University guest…