Is Alcoholism A Disease?

Is Alcoholism A Disease? This paper explores ten published articles that report about alcoholism. There are two sides: alcoholism is a disease or not a disease. Most of articles agree with a statement alcoholism is a disease. However, some argue that alcoholism is just a treatable addiction and a choice. Also, people think alcoholism was named to help people recognize alcoholism is a serious problem. It can be compared to diabetes in a equal way that over eaters have a reaction to food and alcoholics to liquor. It is time to examine what the alcoholism really is and explains the reason of the result for people who believe that alcoholism as an addiction, not a disease. Alcoholism: Is Alcoholism a Disease? One of the serious problems in the United States is alcoholism. It is the concept of drinking a large amount of an alcoholic beverage and those people who cannot control themselves become alcoholics. Alcoholics should learn how to manage themselves from alcohol to live healthy and to avoid alcoholism. Alcoholism can cause bad habits and it may build to a more serious health problem later such as cancer. Some people argue that alcoholism is a disease concept and other believes alcoholism is a choice. According to Hobbs, the debate on whether alcoholism is a disease or a personal conduct problem has continued for over 200 years (2000). Now, lets discover what alcoholism really is. What is Alcoholism? To intelligently talk about the topic of whether alcoholism is a disease, the definition of alcoholism is necessary. When people talk about disease, they use the following three terms: disease, disorder, and syndrome. Mitchell (2001) explains the definition, symptoms of alcoholism and important way of recovery from alcohol. People who drink and do not become addicted to alcohol wind up suffering more devastating with the abuse of alcohol. According to Gorski, many experts and laypersons disagree about whether alcoholism is a biological disease or merely a bad habit (1998) but he argued that most alcoholics undoubtedly suffering from a biological disease and should to be treated accordingly by the management industry. Mitchell (2001) defined alcoholism as alcohol dependence syndrome and a disease characterized by loss of control, cravings, tolerance, and physical dependence. Glatt (1976) also said in Jellineks view, of his sense because physiopathological changes were involved: the lo ss of control and the inability to abstain varieties. These definitions are founded from Glatt (1976). Loss of control is the inability of stop drinking once it has begun. Craving means a strong need or urge to drink and tolerance is the require drinking greater amounts of alcohol to get high. Physical dependence means withdrawal symptoms. These symptoms were identified before the 20th century and people have been researched ever since. Alcoholics frequently are aware of the disrupting effects that they cannot or not willing to give up the strong physical and emotional dependence on alcohol. Mitchell further states, alcoholism is a treatable disease, the sooner a person is able to acknowledge a need for help, the better are his or her chances for recovery (2001). However, there is no guarantee people will quit drinking but will prove to struggle with alcohol in their everyday life. Alcoholism is a Disease Due to the alcoholism being defined as a fatal and continual disease characterized by physical dependence, tolerance, and pathological organ changes, it is a disease. The disease is many times fatal and progressive. Disease is characterized by uncontrollable over drinking, and alcohol use regardless of any consequence. National Institute on Alcohol Abuse and Alcoholism explained, the craving that an alcoholic feels for alcohol can be as strong as the need for food or water and an alcoholic will continue to drink despite serious family, health, or legal problems (2008). Equal to other diseases, alcoholism is considered to be chronic. According to Gorski (1998), there are few different types of alcoholism. In the modern day, Dr. Benjamin Rush medical researcher studied alcoholism. The idea was discover an alcohol related syndrome of medical problems as a disease. His explanation of the symptoms was unfinished though. However, the inquiry began a procedure of alcoholism medical examination as a disease. In the middle of 1950, the medical examination concluded with the Yale and Rutgers schools of alcohol studies projects. These projects finally ended in a great significant part of information which created a convincing argument that alcoholism was in fact a disease. Congress of the United States seemed to be convinced and created the National Institute of Alcohol Abuse and Alcoholism to implement treatment programs all over the country. Overall, many people treating alcoholics never went back to the original source which clearly demonstrated an understanding of alcoholism; they divided alcoholism into five different subtypes: alpha, beta, gamma, delta, and epsilon. Not all of alcohol problems are with the disease of alcoholism. These definitions are from Gorski (1998). Alpha alcoholics normally depend on psychological but without physical. Beta alcoholics are not physically addicted to the alcohol but related to physical health problems like liver damage. Gamma alcoholics are both physically and psychologically dependent on alcohol. Delta alcoholics are also physically and psychologically dependent on alcohol but drinking intensity does not increase. The epsilon alcoholics are same as the periodic alcoholic, one may have a period of relapses and a binge stays for a long time. Overall, gamma, delta, and epsilon alcoholics are disease. In past three years, the disease concept of alcoholism reviewed by Jellinek. According to Jellineks topology, gamma, delta, and epsilon alcoholisms met the criteria for disease. Therefore, not all but some of alcoholisms are consider as a disease. Alcoholism contains symptoms and the danger of increasing alcoholism is influenced by his or her genes and by lifestyle. According to Pace (2001), Dr. Charles Lieber treated a patient for pancreatitis and a heart problem. If the patient did not experienced from the alcoholism for years, he would not have these problems in his life. Doctors definitely could seek the medical consequences, even though the patient has been through treatment. Dr. Lieber always explains about the metabolism of alcohol to his patients. There are many different ways of breaking down alcohol used by the patient when alcoholic develops to alcoholism. We know that alcohol is eliminated from the body through the liver, which breaks down the alcohol to carbon dioxide and water. A normal liver cell produces two main enzymes. One is called alcohol dehydrogenase; it breaks the alcohol down to acetaldehyde, which is a poison. A good liver takes that acetaldehyde and with the help of a second enzyme called aldehyde dehydrogenase, further oxidizes it, breaking it down with a very complicated metabolic process, to carbon dioxide and water. Thats how the normal liver breaks down alcohol. As long as this system is working there is no problem. (Pace, 2001) Dr. Lieber explained that the enzyme is produced by the nucleus of the liver cell, cytochrome, when anyone develops alcoholism (Pace, 2001). Cytochrome allows the liver to break the alcohol faster but the enzyme produces infinite number of the acetaldehyde which is very toxic to the liver and cannot clear from the body. As the result, not enough second enzyme is available to continue the process of breaking alcohol. Therefore, alcoholics should be educated of how alcohol affects their liver. Patients should realize that they are having metabolic defects which affect their livers due to alcohol. Once a liver loses the ability to breakdown, nobody can put it back to a workable liver. The brain is another organ in our bodies that is very involved with alcohol. According to Waldo, when alcohol or other addictive drugs are introduced into a body predisposed by inherited genetics to addiction, permanent biological changes occur in the brain (2000). Nerve cells that drive messages to the brain about feelings, thoughts, and learning are obstruct by alcohol. Also, alcohol interrupts the neurotransmitters that lead to brain shrinkage and it causes increased tolerances like aggressiveness. Animal studies showed that many brain chemicals intake depletes and those chemicals causes feeling of pleasure. Alcohol looses the chemicals that cause depression and stress at the same time. The imbalance of chemical in the brain may be responsible for alcoholism. Swartzwelder, a professor of psychology and psychiatry at Duke University Medical Center, said alcohol may retard teenagers mental growth (2001). Because teenagers brains are vulnerable, still growing and developing, alcohol is especially dangerous to them if they drink alcohol in that age. Many people believe that the brain stop developing after the birth but the newest research founded the result that the brain keep develops during adolescence until the age of twenty. In experiments of studying brain circuits, alcohol was effective to brain even after the age of twenty. Alcohol was effective on the function of a brain chemical which is critical for mental function. Therefore, alcoholics should understand how unique and important their brains are for themselves and everyone else surrounded them. However, instead of calling it a brain disease, it is more than that because the whole body is affected. For example, if anyone is drunk, his or her cerebellum gets interfered because of alcohol. Some of long-term effects are going on the nervous system. Hepatoma is very widespread on the alcoholic; colon and liver cancer are rare primary diseases. Therefore, Pace is saying that, à ¢Ã¢â€š ¬Ã‚ ¦ alcoholism is a disease that affects not only the brain but also the liver, stomach, kidney, intestines, and pancreas (2001). Alcoholism is not a disease Some people argue that alcoholism is not a disease. Dreyfus said, alcoholism was originally termed a disease in order to help people understand that it is a serious problem for which they should seek help (2003). Now, it is overused to the extent in the world that alcoholics wrongly assume that they have ill physically and require medical help to overcome alcoholism. The following research showed that alcoholism is a choice. According to the Baldwin Research Institute in the following viewpoint, the disease concept, alcoholism is based on fraudulent research and has no scientific basis. This theory has been spread by an alcoholism treatment industry that earns billions of dollars from treatment programs, insists the institute; however, it actually creates a reduced chance of sobriety for alcoholics. In reality, alcoholism is a choice; the best way for alcoholics to recover is to take responsibility for their alcoholism. The BRI is a nonprofit organization that conducts research and develops programs to facilitate recovery from problems associated with alcohol and other drugs. (Baldwin Research Institute, 2007) In addition, science and history proved that the disease of alcoholism is pure speculation. America medical professionals and culture embraced the concept of disease and they related it to all credible behavior from alcohol abuse to lecturing. However, the disease concept was a panacea. Therefore, researchers founded that alcoholism is a choice. According to Fingarette, the alcoholic is a tragic figure and deserves our compassion but the idea that alcoholism is a disease is a harmful myth (2001). The most persistent myth of the disease concept of alcoholism is that when a sober alcoholic gets a first drink, the effect causes a physical inability to quit. This is totally wrong. Alcoholics were deceived on what they are drinking. Those people who drink alcohol in reality, but were think that their beverage was non-alcoholic, got no effort to drink much. None of them drank uncontrollably even after they got alcohol. There is few myths related alcoholism. Hanson explained several myths about drinking alcohol and causes of alcoholism in the following. According to Hanson, alcohol is the cause of alcoholism (2008). The fact is that the governmental alcohol agency clarified, alcohol does not cause alcoholism and he continued. If alcohol causes alcoholism, then all of drinkers would become alcoholics. Additionally, the members of Alcoholics Anonymous (AA) are people who born in alcoholic who never caused by alcohol in their lives. In fact, anyone cannot become an alcoholic without alcohol but the members of Alcoholics Anonymous said that most people born and die alcoholics without having had any of alcohol. Thus, Hansons viewpoint is that alcoholism may present to someone who never had alcohol but alcoholism is a disease that caused by alcohol. Another myth is about the brain cells. Hanson explained the myth: alcohol destroys brain cells. In fact, the alcohol does not destroy brain cells. Alcohol is related with improved mental (cognitive) functioning. Therefore, those myths explained by Hanson might confuse everyone. However, alcohol originally brings bad health overall and one fact that people should know is that alcohol historically used for antiseptic, medicinal, and analgesic properties. Further, people who have emotional difficulties were saying the effects are sick and suffering from calling it a disease. Alcoholism and compulsive overeating are diseases like diabetics react to sugar in a same way as overeaters have a reaction to all kind of food and alcoholics to alcohol. Therefore, the individuals must carefully watch for intake. If people do not rigidly care the respective diets, they will get dire results. For example, if a person does not monitor for food intake, then there will be a chemical imbalance that might take to unmanageable health. Therefore, the theory explained that over eater is not normal but rather a person has a disease, is sick. The diabetic disease is something that the bodys failure to produce sufficient insulin. It is not the individuals fault to continue on the diabetic diet. It is manner of the bodys metabolizing alcohol which may be the disease, leading to the need for dietary control, the substance abuse, and abstinence. There might be a chemical or biological basis for compulsions; the disease model does not count as the compulsive behavior itself. It is accountable for the specific substance. Conclusions Numerous number of scientists and organizations continued work on alcoholism over two hundred years to find out what it is. Some people say that alcoholism was originally named a disease to help people recognize that it is as serious problem in the world for which alcoholics should seek help; however, alcoholism is an alcohol dependence syndrome and a disease characterized by loss of control, cravings, tolerance, and physical dependence. If a person cannot control the amount of drinking alcohol, he or she will get to alcoholism. Alcoholism brings very affective health problem to alcoholics. The brain disease may occur because there are important nerve cells that may destroy due to alcohol. The liver is another organ that is related to alcohol. In fact, not only the brain and liver may devastate, alcohol will spread out into the whole body and an alcoholics health will get worse overall. Alcoholism is a treatable disease though but alcoholics should realize having the alcoholism and s tart the treatment as soon as possible to have an excellent result. Therefore, there is no guarantee that people will deny drinking alcohol but the treatment probably will confirm to struggle with alcohol. Because alcoholism is increasing in the world and causes bad health, everyone should endeavor to prevent people who are reaching alcoholism. The disease concept of alcoholism needs to be over. All the alcoholics should take the best treatment for themselves to make the alcoholism not exist in the world anymore.

WAL-MART Essay -- essays research papers

Over the last few years the cost declines of Radio Frequency Identification (RFID) technology, combined with improvements in sensitivity, range and durability, have enabled widespread RFID use in the logistical planning and operation segments of supply chain management processes. Specifically, areas such as security and access control, tracking, and monitoring/management will strategically be enhanced from the use of this technology. An RFID tag consists of a microchip and an antenna, often in the form of a tiny ribbon that can in turn be packaged into many forms, such as a label, or imbedded in between the cardboard layers in a carton. On the microchip is stored information about the product that the tag is affixed to, which can then be â€Å"read† when the tag passes within proximity of an RFID â€Å"reader†. This information is almost instantly relayed back to a computer system that updates the location status of the associated product. This procedure enables great efficiencies and cost reductions with respect to inventory management and control in a physical product environment, and also enables innovative applications in locating and tracking people and assets in a services environment. (Hagans, Andy, RFID Magazine)   Ã‚  Ã‚  Ã‚  Ã‚  This environment changed dramatically last June when Wal-Mart Stores announced that it would require its top 100 suppliers to put RFID tags on shipping crates and pallets by January 1st 2005. Earlier this month, Wal-Mart announced that i...

bible women :: essays research papers

Rebekah   Ã‚  Ã‚  Ã‚  Ã‚  The values in Genesis are disobeyed by yet another woman who does not conform to the female model of a fertile mother. While fertility is an overriding value in god’s human construct that women in Genesis threaten to undermine women also obstruct the â€Å"natural† course of history which god has set in motion as part of his ideal world. After god reconstructs the world through Noah and then Abraham, the divine element withdraws from the world slightly, and a natural historical course begins to play out through the momentum that god has initiated. The incident in Genesis in which a woman interferes with this momentum involves Rebekah, who intervenes on behalf of her second born son, Jacob. As a result of Rebekah’s manipulative orders, Jacob, the younger son, inherits the divine blessing from Isaac, though it is clear from the text that Jacob’s brother, Esau, had been Isaac’s favored child. Rebekah’s actions are rebellious because they result in the violation of the law of primogeniture that seems to have been the standard practice of inheritance in the book of Genesis. And by reassigning the inheritance, Rebekah threatens to destroy the course of events god has anticipated en route to the creation of his select nation. While the text shows that Rebekah had received a prophecy that â€Å"the older would serve the younger† (25:23), whenever women in Genesis take assertive actions that ramifications, conflict always ensues. Just because Rebekah received a prophecy, there is no indication that sh e was in any position to actively seek its fulfillment. Jacob, as a result of his mother’s initiative, is forced to flee his home for fear that Esau will kill him. The hate between the brothers endures, and just as Sara’s infertility caused family conflict, Rebekah’s actions likewise cause disruption in the house of Isaac and its descendents. Unlike the instances where the men in genesis take the fate of their family’s lives into their own hands under open direction from god, the rare occasions when women, such as Rebekah, take aggressive action, the result is battles and feuds. As in the case of infertility, a women’s inheritance with the divine scheme can be seen as a multiple threat to the thematic framework of Genesis. Rebekah takes assertive, independent action with regard to her family’s development, and this action clearly crosses over the rigid boundaries of the prescribed female role.

The Olympus Scandal

The Olympus Scandal Hot Potatoes and Flying Funds Summary This paper describes the case of Olympus, a Japanese manufacturer of optic equipment, at which in early 2012 a scandal was uncovered which was soon dubbed to be one of the largest loss-concealment schemes of Japan. In the 1990’s, Olympus incurred significant losses on financial investments made. These were subsequently hidden with the aid of investment companies by shifting the investments around. In the 2000’s, these losses were to be repaid by paying exorbitant merger and acquisition fees to these investment companies.After newly-appointed CEO Michael Woodford blew the whistle on these frauds, the company got into trouble. Our research into the events leading to this scandal, as well as an observation of the internal control environment led to some interesting insights regarding possible improvements Olympus might implement. However, we also note that a collusion of board members cannot be prevented by any leve l of internal control, and a renewal of the entire board might be appropriate in order to establish proper internal control within the Olympus Corporation. Table of ContentsTable of Contents2 Chapter 13 1. 1Description of the organization of Olympus3 Organization3 Strategic Analysis3 Management Structure4 1. 2The Olympus Scandal5 Background6 Tobashi Schemes6 Whistleblower7 Legal Actions9 1. 3Analysis of the events9 Chapter 211 2. 1Evaluation of and recommendations for the control environment11 Organizational Structure11 Board of Directors and Audit Committee12 Management Philosophy and Operating Style13 Assignment of Authority and Responsibility15 Human Resource Policy and Practices16 Integrity and Ethical Values17 Commitment and Compliance18 . 2Recommendations for control activities19 Chapter 320 3. 1Conclusion20 Literature Used21 Appendix23 Chapter 1 1. 1Description of the organization of Olympus The organization which we will be discussing in this paper is Olympus, which is a Jap anese company specialized in optical and digital products. Most people will know Olympus from the cameras they make, but they produce a lot more different type of products. This chapter will cover the background of Olympus and a strategic analysis of the company. Organization Olympus was established in 1919 in Tokyo, Japan.At first they specialized in microscopes and thermometers, but in 1936 they introduced their very first camera, the so-called Pen. It is this product for which they are well-known to the public. Nonetheless, it is not their primary product. Olympus is extremely specialized in microscopes and optics. Most of these are used in professional environments, like research centers and hospitals. This links also to another specialty product of Olympus, namely medical equipment. Olympus is an important manufacturer of endoscopic, ultrasound and disinfection equipment.These medical instruments are used worldwide (Olympus Corporation, 2012b). Olympus is even market leader in the endoscopy market, with a market share of almost 70%. Of the net sales of Olympus, 42% are from the medical systems segments. According to the annual report, Olympus operates worldwide, with about 46% of the 2011 fiscal sales from Japan. Other main areas are North America (21,5%), Asia (not including Japan) with 11,5% and Europe with 18,2% (Olympus Corporation, 2011a). Strategic Analysis It is clear that Olympus is a multi-business entity which follows a related diversification strategy.They operate in several markets, namely ‘medical’, ‘life science and industrial’, ‘imaging’ and ‘information and communication’. All these areas require a lot of research and development, but there sure are operational synergies between these markets. Logically, the lenses they use in cameras are also very useful for the medical equipment. In the Annual Report of 2011, Olympus states that the two businesses it wants to focus on most are the †˜endoscopes’ and ‘surgical and endotherapy devices’. Olympus is already market leader in the first category, creating unique, high-resolution equipment.For the second category Olympus is still broadening its market share. An important step in this process was the acquisition of Gyrus, plc in 2005. Later on we will see that the acquisition of this U. S. endoscope company has played a very important role in the fraudulent activities of Olympus. In 2011, Olympus had about 34,391 employees. This number had been decreasing for a while, since in 2009 they had 36,503 employees. But not only the number of employees has decreased in the last few years. Net sales declined in 2011 to ? 847,105 million (about $10,589 million).Operating income declined to ? 35,360 million, about $442 million (Olympus Corporation, 2011a). The development of the results of Olympus in the past few years are shown in these three graphs below: [pic] Figure 1: Olympus Financial Results (Source: Ol ympus Annual Report 2011) Management Structure In the Annual Report of 2011, it is stated that Olympus values an appropriate corporate governance structure from a global perspective. They adopted a corporate structure with an auditor system based in the Japanese Corporation Law.The corporate governance systems consists of a Board of Directors of 15 members, which audits and supervises the performance of directors, and a Board of Auditors consisting of 4 members, which are independent from the Board of Directors and audit the performance of the directors. Two external auditors are members of the Board of Auditors, and also of the Special Committee, which gives advice to the Board of Directors. An interesting fact about the composition of the Board of Directors is that is has always fully consisted of Japanese directors, until April 2011, when the first non-Japanese director was appointed.Because there are a few important and recurring people in this scandal, it is important to know t heir names and position in the company. Tsuyoshi Kikukawa – Chairman of the Board of Directors and CEO Michael Woodford – President of the Board of Directors and COO Hisashi Mori – Director, Executive Vice President Hideo Yamada – Standing Corporate Auditor This is how the positions of the main actors were halfway April 2011, right before the suspicions of the fraud would rise (Olympus Corporation, 2011a). The management structure of Olympus can be visualized as follows: [pic]Figure 2: Olympus Management Structure (Source: Olympus Annual Report 2011) In the Corporate Governance Structure Chart above, some aspects of the Internal Control System can be found. We will discuss this explicitly in Chapter 4. But for now it is enough to know that Olympus has a CSR Commission chaired by the president to set up and evaluate targets with regard to CSR activities. They also have an internal employee code of behavior the so-called Olympus International Standards, and they established a Compliance Department which in case of compliance problems has to report the problems to the Board of Directors and the Board of Auditors.For the Risk management system, the company has established a Risk Management Committee which helps to decide on risk management policies and the evaluation, verification and procedural standards to respond to such risks. In order to reduce the risk of takeovers, they have introduced a plan to prevent large-scale purchases of the company’s shares. The anti-takeover measures are advised on and evaluated by the Special Committee, existing of the two outside auditors and one outside director (Olympus Corporation, 2011a). 1. 2The Olympus ScandalThe scandal surrounding Olympus became known on October 14th, 2011, when Micheal Woodford was fired as the CEO of Olympus. He had been the CEO of Olympus for only two weeks. He was the first non-Japanese person to become a member of the Board. In a press statement, Olympus announced t hat they had fired Woodford because of differences in management style. But according to Woodford, that was not the actual reason. He stated that Olympus had fired him because he questioned some prior acquisitions. This was not something of the most recent years, in fact, the scandal even goes back to the nineties. BackgroundIt all started in the beginning of the nineties. A decade earlier, the dollar was almost worth ? 250 (Board of Governors of the Federal Reserve System, 2012). Due to this undervalued yen Olympus suffered from an enormous operating loss, as imported resources were incredibly expensive. To solve the problem of the extremely undervalued yen, a few countries decided devaluate, and after the implementation of the Plaza Accord in 1987, a dollar was worth about ? 121. The Japanese export market was still expanding, though one can wonder whether it even was a real market, it was actually more a bubble.In the final four years of the 1980’s the stock prices tripled . Many Japanese companies, like Olympus, used speculative investments to boost their income, which was very welcome because of the declining income from normal business due to declining exports. These risky investments worked until 1990, when the Japanese markets collapsed. In that year, Olympus decided to cover the loss of ? 100 billion ($730 million). The reason why such an enormous loss could be hidden was because of the accounting rules in Japan around that time. Investments could be carried at costs.Olympus simply did not write down on the investment, which was worth nothing anymore. They hoped that they could make up for the losses by doing more risky investments. But after a few years, instead of making up for it, the losses only got worse. And then in 1997, the accounting rules changed. Investments had to be marked to market and Olympus now actively had to do something to solve the problem of the losses. And it is this very moment when the real fraudulent practices of Olympu s started, to cover the losses of the last decade of the twentieth century.Tobashi Schemes It was much more difficult now to hide the losses for the public. Hideo Yamada, in that time a former full-time auditing officer at Olympus, was the chief of Olympus’ general affairs and financial department. He consulted, together with his subordinate Hisashi Mori, two officials of an consultancy firm. Together they decided to hide the losses with a Tobashi scheme. They transferred Olympus’ losses to some funds they had established right before March 1998 at the Cayman Islands, named Quick Progress and Central Forest.These companies were not consolidated with the Olympus’ financial statements, so such assets transferred there would not show up on Olympus’ balance sheets. By moving the assets for only short amounts of time, right before the financial year ended, they managed to keep these assets hidden for several years, including the losses they were incurring on t hem. Additionally, rumors are that Olympus reported several non-existing foreign bank accounts in order to conceal it’s usage of fake transactions. Additionally, several of these loss-incurring investments were moved to Axes America and it’s Cayman Islands-based subsidiary AXAM Invest Ltd.Signs of the fraud came to light when Olympus wanted to pay back these losses to AXAM by hiring them as consultants for the takeover of Gyrus. For this takeover, AXAM was paid an exorbitant fee totaling $687 million. This consisted $67 million in cash and another $177 million in preferred shares, which Olympus repurchased two months later for $620 million. This repurchase of shares also increased the goodwill on Olympus’ balance sheet by $435 million (Woodford, 2011). Gyrus was not the only dubious acquisition of Olympus.Throughout the years they had acquired many companies, most of the time for a very high price or by paying exorbitant fees to consultants. Another example is t he acquisition of Altis, Humalabo and News Chef. Between May 2006 and April 2008 Olympus acquired the majority controlling interest in these three companies. They paid approximately $773 million for the companies (? 73,419 million). The purchases were completed in April 2008. In the same fiscal year, ending in March 2009, the investment in these three companies was written down as follows: [pic]Figure 3: Altis, Humalabo and News Chef impairments (source: Letter from Woodford to Olympus Board, 2011) So the total investment in Altis, Humalabo and News Chef was almost $800 million, but within a year is was written down with almost $600 million to only 25% of the original value. This is of course an extraordinary goodwill impairment for such a short amount of time (Woodford, 2011). Whistleblower In April 2011, Michael Woodford became the first ever non-Japanese president and Chief Operating Officer (COO). October 1st 2011 he also became CEO of Olympus, replacing Kikukawa in that positio n.But within two weeks, October 14th, he was fired as CEO of the company. The Japanese Board stated that is was because of the differences in management style, that Woodford as an Englishman could not really understand the Japanese business culture. Woodford himself stated that the story told by the board was not true. According to him he was fired because of the fact that he investigated the M&A fees of several acquisitions, especially the acquisition of Gyrus (Voigt, K. , January 2012). Woodford started questioning some of the M&A fees paid after he read an article in FACTA on July 30th about a dubious acquisition by Olympus, namelyGyrus. Upon this he contacted Kikukawa and Mori and demanded answers about the fees paid. He wrote several letters, explaining his concerns about the governance issues, but he never got any real answers. He threatened to resign if he did not get an explanation about the M&A fees. Little later, he was named the new CEO of the company. Understanding quick ly that this promotion was only done to silence him, he hired PwC to investigate the fees without informing the board about this investigation. After the report of PwC was completed, Woodford sent the report to the Olympus Board and to Ernst&Young, auditors of Olympus.On an emergency board meeting on October 14th he was dismissed (Bacani, 2011). The directors of Olympus denied the accusations of Woodford for a few weeks, even blaming him for the decline of the stock price. On October 26 Kikukawa resigns as CEO and president, and he is replaced by Shuichi Takayama. In the week of 6 November 2011 president Takayama made public that he had been informed by the now-dismissed Mori about the cover-up schemes. He explained that he had known absolutely nothing about these schemes and that Kikukawa, Mori and Yamada were not responsible for the initial losses, but had only tried to hide the losses.Yamada, the auditor of Olympus, had resigned a week earlier. One week after Woodfords firing, on October 21st, the stock price of Olympus had fallen from $32 to $16. The chart below makes clear that the stock price would drop much further. In the week of 6 November, when Olympus admitted the fraud, the stock price declines to $6. 3 per share. The scandal caused the stock price to drop with almost 80% (Yahoo Finance, 2012). [pic] Figure 4: Olympus Stock Price (Source: Yahoo Finance) Legal Actions Of course, these types of fraud with such an impact cannot go unpunished.In February 2012, seven men were arrested for the fraud, including Kikukawa, Mori and Yamada (CNN Voigt, February 2012). They were arrested on suspicion of filing false financial statements to cover up the enormous losses from the past in 2006 and 2007. Kikukawa is seen as the main suspect in this case. Separately from these accusations, the company Olympus as an entity is also charged for the falsification of the financial statements. Later on, four of the seven men were rearrested for falsification in other year s, namely 2009, 2010 and 2011 (Hasegawa, 2012).Japanese lawyers have said that the executives can face up to ten years in prison or a fine of about $125,000. If found guilty, the firm faces a fine of almost $9 million. The trial of the Olympus officers has not started yet, so it cannot be said what the final judgment will be (Reuters, 2012). On April 20th 2012, investors approved of a complete new Board of Directors, hoping that the company now can start with rebuilding its image and shareholders’ trust, and that they can finally leave these rumorous years behind (Olympus Corporation, 2012). 1. 3Analysis of the eventsAlready in 1986, the then-CEO said to press that â€Å"in difficult times, companies will have to use financial engineering in order to make a profit†, referring to the use of Tobashi-schemes to hide incurred losses or even inflate profits. In the Japanese investment climate at the time, there was little regulation on this â€Å"flying away† of loss es incurred on bad investments, and it was in fact even popular in the ‘80’s, with certain production companies come to be nicknamed banks because their financial incomes exceeded their operational incomes (Dymski & Isenberg, 2002).This was made possible by the so-called zaitech (literally: financial engineering) system which was caused by the extremely low interest rates and high accessibility of credit, which made it easy for companies to raise money to invest in speculative market activities. This led to an upward spiral of increasing stock prices, enabling companies to obtain more capital, perform more risky investments, which again led to a increase in stock value enabling the companies to report more (speculative) profits, which closes the circle by increasing the company value and enabling them to obtain more capital (Haramis, 2007).Another factor contributing in this was that a lot of these securities issued were convertible bonds. Japanese investors customarily did not take into account the possible dilution of shares caused by convertible bonds, and thus the emission of convertible bonds did not cause a decline in the price of shares (Smith, 1994). Even if the zaitech would lead to a loss, the system of Tobashi would make it possible for firms to hide the losses. With Tobashi, the investment houses could reimburse the losses to their clients in loan-like constructions which would eventually need to be repaid.These loans often involved moving the loss-giving assets into special purpose vehicles (SPV’s). These SPV’s had non-synchronous financial year-ends, allowing the losses to be kept off the books by moving around the assets. The feeling of being unable to lose was also reinforced by investors. This is described as follows:â€Å"[†¦] the Banking Bureau instructed firms to postpone the introduction of lower cost accounting until April 1, 1988. Because of this, companies did not need to write down the loss and life-ins urance companies did not have to sell stocks in mass quantities.In this way, the MOF succeeded in preventing share prices from declining. After that, stock prices surged remarkably. This was because these measures by the MOF to contain the markets made investors believe that the ministry would never let stock prices slump. † (Kamikawa, February 2010) It was not until the end of 1989 that the Japanese government interceded in this bubble by raising the interest rates, which ultimately led to the collapse of the zaitech-bubble and eventually even the 1990’s recession in Japan (Smith, 1994). Olympus partook in this as well in the 1999’s by hiding the ? 0bn ($241mln) losses incurred while investing in a venture capital fund in 1999 owned by investment house Nomura. One of the owners of Nomura was Nobumasa Yokoo. This loss never showed up in the financial statements, but was uncovered during investigation by external audit firm PwC, which was hired by whistle-blowing director Woodford. ‘Coincidentally’, Yokoo was also shareholder in 3 companies (News Chef, Altis and Humbalabo) which Olympus acquired in the 2007 – 2010 period for ? 73. 4bn. Only 6 months later, these were impaired by ? 55. bn (75%) because â€Å"the business prospect diverged from the assumption at the time of investment†. Investigation into these investments is yet to be launched officially, but suspicions are that this is also another attempt at repayment for a Tobashi scheme. Chapter 2 2. 1Evaluation/recommendations for the control environment The control environment is an essential part and basis for the internal control system within a company. A firm may have enhanced control activities and monitoring procedures but without properly established control environment all the control component would be futile.In 1992 COSO released their Internal Control – Integrated Framework, which states that control environment â€Å"sets the tone of an org anization, influencing the control consciousness of its people† (COSO, 1992), provides foundation for other components of internal control. Control environment includes integrity and ethical values, commitment and competence of the company’s personnel, Board of Directors and Audit Committee participation, management philosophy and operating style, organizational structure and human resource policies, assignment of authority and responsibility by management.In 2004 COSO published Enterprise Risk Management – Integrated Framework, which expands on internal control and focuses more on enterprise risk management. Framework contains definition of internal environment, which â€Å"encompasses the tone of an organization, and sets the basis for how risk is viewed and addresses by an entity’s people† (COSO, 2004). We will address the elements of the control environment and internal environment to the Olympus case under investigation using the seven principl es for control environments as guidance (Streng, 2011).Alongside an evaluation addressing these elements, we will give our recommendations for improving them. Organizational Structure Evaluation The Olympus Corporate Strategic Plan slogan which is actively promoted within the company is â€Å"Advancing to the Next Stage of Globalization† (Olympus Corporation, 2010). Based on this slogan the company rejuvenated its management structure in April 2011 by introducing new management rules, restructuring information-related operations and administration, shifting focus to overseas operations and reviewing the cost structure.These changes can suggest the considerable flexibility of the organization in following the chosen strategy. The overall organization structure described in the part about â€Å"The Board of Directors and Audit Committee† seems quite elaborate for such kind of company as Olympus. Information about the key managers’ responsibility cannot be found in the public sources; therefore we cannot evaluate how adequate they are and whether managers have a proper understanding of them.Nevertheless, this organizational structure which seems to be thoroughly established did not prevent the fraud, because of the involvement of almost all top officials in it – 19 people were sued in covering-up losses and some of them are still the part of the firm’s management (Buerk, 2012) Recommendations The basics of internal controls are all there in Olympus, with collusion being the main reason why the fraud could continue for so long without any detection. The new management rules which were implemented in 2011 were a good start, were it not for that the board did not follow the newly implemented rules themselves.Best would be to completely remove any ties between the internal auditors and the board, so that the internal auditors can audit the board more effectively and without interference by executives. In a construction like this, th e internal audit department would only have their responsibility to the general meeting of shareholders, preventing possible future collusion. Board of Directors and Audit Committee Evaluation The corporate governance structure of Olympus consists of two organs.The first of these is the Board of directors, which meets frequently and is tasked with supervising and auditing the performance of executives and internal auditors. The second is the Board of auditors, tasked with the audit of the performance of the executives and advising the board of directors. The division between executive and non-executive directors is an important internal control procedure in enhancing the separation of duties for monitoring and decision-making, and should increase independence between the board and management.The general meeting of shareholders has the final decision on the appointing of directors, internal and external auditors and remuneration, ensuring a separation of duties. The remuneration of d irectors is based on their performance, which is measured by the balance score card (BSC) system on the degree to which the goals are achieved in four dimensions (financial, customer service, business operation process, growth potential). Concerning the knowledge and expertise of directors, we can conclude that, based on the publicly available information, the directors of the company are highly qualified and experienced.Also this conclusion can be confirmed by the resumes of the directors, who have all been involved with the company for a significant number of years, often a majority of their lifetime. This can however also be a weakness, because they may miss a fresh view on the company. The Olympus scandal showed existence of strong ties and cooperation between the Board of directors, banks, investment bankers and accounting firms in conducting fraud and their attempts to hide it (Yasu, 2012). Proper control environment should include directors who are independent from management , trade partners and other parties (Maitland, 2012).Recommendations In the case of Olympus the chairman of the board of directors was the same man as the CEO. We think this is a part of getting a huge scandal like this one. The Board of directors should determine whether or not the CEO is independent in character and in judgment (Financial Reporting Council, 2010). But in Olympus, the chairman of the board would therefore be required to evaluate himself on his own independence, character and judgment. Seeing as this is impossible the UK CG code proscribes a segregation of duties between these two positions.Even though this would not directly apply to Olympus operating under Japanese law, it is very probable that the Japanese CG code also sports at least an advice for this. Thus we would recommend for Olympus to have two different independent people fulfilling these functions. Furthermore we think that the people within the board and people with other top functions were too long hold ing the same position at the company. This makes the board less independent and will make the chance of fraudulent actions higher, even when some executive people left they came back at the company in another function like Kikukawa did.Kikukawa was first the CEO and president of the board, and returned as an auditing officer after his dismissal. This led him to be able to review his own work as CEO. We recommend that Olympus reassigns its board members and that people within this board should not have other important functions for at least several years. The UKCG Code advises for board members not to stay on for longer than 9 years (Financial Reporting Council, 2010). This makes it harder to perform fraudulent actions because people can't rely on the new people to participate in the fraud. This will also more often give shareholder control over the actions of the board.Additionally, they cannot get â€Å"rusted into habits†. However, as the entire board, including non-executi ves, and the internal auditors were involved in the fraud scheme, we have doubts whether any amount of internal control could have prevented this fraud. Management Philosophy and Operating Style Evaluation In this section we will pay attention to the management philosophy, including risk attitude and management approaches. The Olympus Corporate Social Responsibility (CSR) Report 2011 gives us insight into which management insights considers the most important for the company.It is stated that for the company the main focus is not on the profit but on the â€Å"win-win relationships† with stakeholders based on mutual trust. Management philosophy in the company is based on â€Å"Social IN† through which company incorporate social values into the company’s activities. (Olympus Corporation, 2011b) The CSR Concept of the Olympus Group establishes the ways in which the company can make its contribution to society (through business and other voluntary activities) and s tates the company’s duties responsibilities to society through compliance with laws, regulations and business ethics.Olympus not only states their views on how the business should be conducted but also communicates them but means of policies. For example, to act on behalf of the customer the company established Protection Policy; with respect to human rights the Human Rights and Labor Policy was implemented. These policies and philosophies are incorporated in the daily business activities. All the means and processes mentioned above create an impression that the Olympus Company has a strong attitude towards corporate values and uses strictly stated procedures to bring them into everyday business life.Olympus established a system of committees to employ more comprehensive approach towards risks and to analyze, evaluate and manage them (see Figure 2: Olympus Risk Management System on the next page), such as a Risk Management Committee (to decide on the risk management policies and on proper responses for the risks faced by company, chaired by the president), a Risk Management Bureau (to collect and evaluate information regarding risks, to develop counter measures and ensure their effectiveness) and a Business Continuity Plan (to ensure devotion to its management policy in emergency cases, to be prepared to such cases).Recommendations However, despite all these internal controls, the fraud still managed to occur and persist through collusion of the board of directors. Not any amount of internal controls would be able to prevent such a fraud, as the board can always override these controls. This can especially be seen in Figure 6, where the president is depicted as the Risk Management Leader, all the while it was the president who was the center point of the fraud. However, one can limit the options for fraud by non-executive management significantly.The processes and policies established by Olympus already give a good head start, but key to success of them is support by management. Not in word, but also in deed. Every in-house department and affiliate company should establish its own risk management structure and all the uncovered significant risks should be immediately reported to the president and Risk Management Committee. [pic] Figure 6: Olympus Risk Management System (Source: Olympus CSR Report 2011) Assignment of Authority and Responsibility EvaluationThe company established a thorough corporate governance system with stringent monitoring, auditing, evaluating and reporting responsibilities. There are various committee structures ensuring compliance and effective internal controls in all the business activities and a lot of attention is paid to compliance with norms, laws and regulations. The Boards of directors plays an important role in establishing of company strategy, making decisions about main management issues and monitoring the fulfillment of decisions made and strategies established, while leaving the day-to-day manage ment to the company managers.A special Committee, consisting of outside directors and auditors, takes advisory responsibility concerning the most important deals. Public sources do not provide information about the employee job descriptions, therefore in it hard to evaluate thoroughly appropriateness of the responsibility assignment. The firm documents also do not contain the information regarding the number of people with respect to data processing and accounting functions, which also does not allow us to get a better grasp on the actual situation within the company. RecommendationsThe company already has developed a thorough corporate governance system with stringent responsibilities. There are still some recommendations like competency controls. This is a formal control since it verifies whether organizational activities are conducted in conformity with applicable procedures and requirements (Vaassen, Meuwissen, & Schelleman, 2009). So these controls can be used to prevent unauth orized employees gaining access to certain areas or assets they should not supposed to have access to. For these competency controls to work correctly strict procedures and requirements have to be well formulated and established.We therefore recommend Olympus to have strict procedures and have competence controls using these procedures. For responsibility we think it is important for Olympus to have clear function descriptions in which the responsibilities for that particular function are described. Human Resource Policy and Practices Evaluation The Olympus Corporate Social Responsibility Report 2011 states that human resource management systems are based on the belief that a company’s performance consists not only of its business results but also of the growth gained by each individual employee.The company established a thorough Human Rights and Labor policy stressing the most important issues in this area and developed a CSR Educational Cube (see right) to raise awareness o f compliance, CSR initiatives and enhance communication within the organization. The company introduced various initiatives concerning HRM including internal job-seeking, individual career planning, skill development, newly appointed executives trainings, occupational safety programs, physical and mental health consultations, and a so-called ‘Welfare Cafeteria Plan’.All of these activities serve the goals of enhancing employees performance and their commitment to the company. Concerning the reward systems, there are established procedures for annual paid holidays and bonuses. Company CSR Report states that salaries and bonuses reflect each individual’s activities and contributions; the bonus funds are linked to business results. Company also use a so-called Advanced Technician/Engineer Incentive System to ensure improvements of the technical and practical skills of engineers and serve the innovation basis for the company activities (Olympus Corporation, 2011b).Re commendations Vaassen et al, 2009, p. 203, Describes that Human resource management processes generally consists of recruiting and selecting employees, educating and training employees, assigning tasks to employees, evaluating employee performance, employee remuneration and employee termination. Some of these aspects can be found at Olympus but not all yet. An recommendation on this part is that for each employee there is a personnel file available.This file will consist of data of the employee right before starting at the company such as address, number and contract information, but it is also important to keep this file updated with the employee performance, evaluation, payroll and career advancements. Also when the employee participates in education and training programs this needs to be included. This file needs to be available to managers because managers can use this file to assign tasks to their employees. Another recommendation to Olympus is to evaluate their employees on a regular basis.This evaluation needs to provide feedback to the employee about their job effectiveness and career guidance, because this will motivate the employees. This evaluation needs to be done by the functional manager together with the human resources manager. Then finally it is important for Olympus to have procedures in place for terminating dysfunctional employees. When during the evaluations turns out that the employee is not performing as it should be, there needs to be a plan for improvement made by the superior of the employee and the human resource manager.This plan needs to be communicated to the employee. After this the two officers needs to monitor the employee to see if there is improvement. Integrity and Ethical Values Evaluation The Olympus scandal, and even more the scale of it, points out that ethical values are very important for companies. It is not enough to just have a code of conduct or an ethics committee. The company should also live to the ethical guide lines. And if even the directors do not behave ethically, how could they expect the employees to behave ethically? In theory Olympus has done a good job on the ethical part.They have got several codes on ethical behavior and moral values and there is a committee about this. But just the existence is not enough. It is clear that there was no correct ‘tone at the top’. It could be recommended to start at the top of the company, because once the directors show moral and ethical behavior and give guidance to what is right and wrong, the employees might act the same. Recommendations Part of the board of directors was replaced, but several key figures are still in place after the scandal, even though it is known that they were (or should have been) aware of the fraud going on right in front of them.We would therefore recommend that the remaining directors are also replaced, which would give a good signal to both shareholders and employees alike that it’s time for a fre sh start. It is also important that the attitude to mistakes or misbehavior is reasonable. Of course, the effects of a mistake may be huge, but the reaction to it must be reasonable. Otherwise, people will try to hide their mistakes. Especially in a business culture like the one in Japan, this may be very hard to implement, because it is considered discrediting the company if one makes mistakes or causes significant losses.As such there must be clear and reasonable consequences to misbehavior or overriding established controls in order to diminish the amount of secrecy around losses, mistakes or ethical misbehavior. Furthermore, the code of conduct and the ethical and moral values should be known and implemented. Not only the employees, but especially the directors should be aware of it and behave as demanded, to set an example and prevent scandals like this. Commitment and Compliance Evaluation Overall Olympus developed a thorough approach for recruitment and promotion.They establi shed company Human Rights and a Labor Policy and requires from all the employees high commitment to company values. To promote the company values, Olympus holds meetings with their employees and gives trainings to the employees. This can be seen in the Corporate Social Responsibility Report of 2011 which contains methods for developing a culture based on putting the customer first. To achieve this Olympus has chosen to instill the attitude of thinking from the perspective of the customer in every employee by providing special courses at all the levels in the company including newcomers.So Olympus facilitates skill development (Olympus college, Advanced Engineer Incentive System) to equip their employees with the skills they need to work successfully. At the company group level a Safety & Health and a Ethical Conduct Promotion Committee was established to enhance safety & health and to reduce ethical problems for all the employees within the group. Recommendation Olympus already does a lot to promote their company values as described above. Also by meetings with the employees the commitment will be better.For commitment it is also important to have good guidance by superiors, therefore our recommendations on this part are similar to the ones of human resource policies. Something that can be added in this part is that the education programs employees can perform are specially for those employees, so the programs needs to fit with the employee and their career changes. This will make the employee more committed to the company. 2. 2Recommendations for control activitiesIn this paragraph we will assume that all the recommendations for the control environment has been taken into account and that Olympus has implemented those recommendations. Now we will look at recommendations for the control activities. We first need to know what control activities are. According to Streng, 2011, p. 49: † Control activities are the formal policies and procedures that help an organization ensure that objectives are being achieved and are achievable. The scandal started with speculative investments which caused a loss of $730 million.Therefore Olympus should implement control activities to ensure that this cannot happen again. First of all the company should not invest in investments that are riskier (too speculative) than they prefer. They have to decide for themselves what their risk appetite is and cut out the investments that are too risky. To make sure that such investments will be left out, Olympus needs a risk assessment report for the investment. This report needs to be approved by the management which will make the investment, but also by the higher management of the company.This will make the chance of big losses smaller. Thereby comes the fact that segregation of duties is important. The scandal was caused because higher management approved or even initiated very risky investments, so there must be someone independent to check on the investment s. After having the investment approved the investment still needs to be monitored on a frequent basis. This is because there is still a chance of a loss or that the it actually was a wrong investment. Results of the monitoring activities also need to be communicated to the higher management so that they can intervene if necessary.The decision to intervene needs to be made by someone that is independent of the investment department, so that this decision will not be influenced. Than the auditor needs to check if there are risk assessment reports for the investments which Olympus decided to invest in and also that the higher management approved of these investments. Further the auditor needs to check if monitoring is done frequently and have to look at the decisions made by higher management on the basis of the monitoring activities.So for instance if these decisions are made by a independent person. We also like to advise Olympus to have strict procedures for when to abandon an inve stment, so that it will not be possible that after a loss incurred the investment stays in the portfolio in the hope that this investment will become profitable in the future and actually becomes more loss making. Furthermore it is important that Olympus only has employees in the investment department that are capable of making the right decisions and have the right knowledge of how to monitor and when to intervene.In order to do so, Olympus must have strict recruiting policies and offer education and training to their personnel. Only then they can be sure, to a certain level, that their investors are capable of investing, know what they are doing and what risk they can take. With the continuous stream of new, complex financial products it is very important that the employees of Olympus are highly educated and have up to date knowledge. Apart from the investment department, every employee of Olympus should be aware of the Code of Ethics, including the management.Finally, it is impor tant that there is an effectively working control IT system. A proper working system should be able to detect extraordinary high fees paid to e. g. consultants, extreme impairments on recently acquired companies and the transfer of money or losses to recently set up funds in dubious places (one has to admit that funds on the Cayman Islands should have raised some questions immediately). Once a proper IT control system is implemented it should be very hard for the directors to act as secretive as they did during the scandal. Chapter 3 3. 1ConclusionThe Olympus scandal became one of the largest loss-concealment schemes in Japan, routed back in the 1990’s. We conducted our research regarding this scandal starting from the company's history and organizational issues. Then we gave insight into the scandal itself, followed by the investigation and statements of recommendations for control environment and control activities. The control environment in the Olympus company was forming and developing throughout the years of the company's existence and various control activities were established. Nevertheless, it was not enough to prevent fraudulent actions.Therefore based on our research the following procedures can be recommended regarding the control environment: revision of the company’s organizational structure to guarantee auditor’s independence, reassignment of all board members involved in the scandal, implementation of procedures to ensure â€Å"real† compliance with corporate policies at all levels, enhancement of HRM policies and practices to ensure high qualification and commitment of personnel. Moreover, strict procedures, control activities and regular monitoring over investments should be developed within the company, to eliminate chances of such fraudulent situation in the future.A good ethics lesson can be learnt from the Olympus case. Collusion within the company's top officers could hardly be prevented by internal control me chanisms. Therefore the Olympus scandal is a very representative example for the regulators to direct their efforts. Also it is a great confirmation of the fact that integrity and high ethical values should be followed and embodied by all the employees of the company, from the workers and engineers to the president and chairman. Literature Used Bacani, C. (2011, October 24). The Olympus Scandal: When a Foreign CEO Rebels.Retrieved May 9, 2012, from CFOInnovationAsia: http://www. cfoinnovation. com Board of Governors of the Federal Reserve System. (2012, May 1). Japan / U. S. Foreign Exchange Rate. Retrieved May 9, 2012, from Federal Reserve Bank of St. Louis: http://research. stlouisfed. org Buerk, R. (2012, February 16). Former Olympus Chairman Arrested in Accounting Probe. Retrieved May 9, 2012, from BBC News: http://www. bbc. co. uk COSO. (2004). Enterprise Risk Management – Integrated Framework. New York: AICPA. COSO. (1992). Internal Control – Integrated Framework . New York: AICPA. Dymski, G. , & Isenberg, D. 2002). 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Retrieved May 9, 2012, from Bloomberg: http://www. bloomberg. com Appendix Appendix IOlympus Timeline Appendix IIOlympus Corporate Governance Facts Main facts about the Boards of Directors (BD): †¢ 15 members (incl uding 3 outside directors) Meets once per month to make decisions about the business strategy and other current management issues and to control over the fulfillment of decisions made and strategies established †¢ Outside directors taking part in the BD meetings as members of the Special Committee[1] †¢ Executive Management Committee is formed at the company to facilitate President and COO decision making (meets 3 times per month) †¢ The term of office of directors has been set to 1 year to enhance their accountability (their performance is assessed annually) †¢ To enhance eligibility and expertise inside directors participate in seminars outside the company Main facts about the Board of Auditors: 4 auditors (including 2 outside auditors) †¢ meets 1 time per month †¢ audit management’s daily activities (for instance, director performance) †¢ participate in important company meetings (including BD meetings), they share their opinion concernin g the questions under the discussion with executive officers, subsidiary’s auditors, Internal Audit Department and accounting auditors †¢ The Board of Auditors shares its views with the President four times per year and with all other directors (excluding outside directors) and executive officers once a year. †¢ Outside auditors participate in the Board of Directors meetings as members of Special Committee.They give the company advices concerning the questions of large-scale acquisition of shares (over 20 %). Outside auditors have possibilities to visit the plants and research centers to deepen their knowledge about the company. ———————– [1] Japanese Corporate Law does not require companies with auditor have outside director within the Board of Directors. Olympus appointed Rikiya Fujita (doctor of medicine), Masanobu Chiba (career as a director of Nikkei Inc. and its group companies) and Junichi Hayashi (career as director of investment consulting company) ———————– Figure 5: Zaitech Bubble Figure 7: CSR Educational Cube (Source: Olympus CSR Report 2011)