Are Olympus Corp. shareholders stupid, xenophobic or both? It's an entirely valid question as the company's chief-executive-turned-whistleblower was sent packing for the last time.
Michael Woodford's first departure came in October, when the Briton questioned a $1.7 billion accounting fraud that's now the center of criminal investigations. You would think that he'd be hailed as a hero. But in Japan, where foreign CEOs are still exceedingly rare, the 51-year-old was fired on vague charges of cultural insensitivity.
After being vindicated in the news media, Woodford raised his hand to return to Olympus and try to salvage a little credibility. Last week, shareholders gave him a definitive "no."
What in the world are these people thinking? They would rather stick with the board that presided over one of corporate Japan's most shameful scandals than a chief executive -- Woodford -- who's shown the courage and transparency Olympus needs to survive this affair? Oddly, yes.
The explanation may lie in shame itself. In 1946, Ruth Benedict, author of the influential book "The Chrysanthemum and the Sword," famously dubbed Japan a "shame culture." Failing, either in the political or corporate realm, can carry a debilitating level of embarrassment, one many Japanese try at all costs to avoid.
It explains Japan's lack of entrepreneurship. Huge Japanese companies can be plenty innovative and long prided themselves on being a world-leader in new patents. Less common is a few young Japanese sitting in a garage, Steve Jobs-style, with a laptop, a dream and ambitions of starting their own game-changing company. Fear of failure is a powerful thing in Japan.
At Olympus, it wasn't greed or enriching cronies that had executives hiding losses, but fear of losing face. How fascinating it is that Olympus executives would rather risk jail and the total destruction of a 92-year-old company than simply fess up that they, like so many before them, got suckered on some toxic bonds. Consider, too, how Tokyo Electric Power Co. executives hid safety infractions over the years in ways that led to today's radiation crisis.
We will leave the dynamics behind the economics of shame to the psychoanalysis set. It's clear, though, that in Olympus's case, it played a dominant role in ways the news media has yet to explore.
(William Pesek is a Bloomberg View columnist.)