Ben DiPietro, The Wall Street Journal’s Risk & Compliance Journal, June 19, 2017

Fujifilm Holdings announced that losses from accounting irregularities in New Zealand were much larger than first thought and extended to the company’s Australian office-equipment unit. The announcement left some to wonder how much control the company has over its overseas units.

The company said it conducted a review and found the losses would widen further but did say it found “a problem” with controls at its Fuji Xerox subsidiary. Fujifilm said inappropriate accounting occurred in part because of commission and bonus “incentives” for managers and employees that “placed an emphasis on sales.” It said six board members at Fuji Xerox would resign to take responsibility for the losses that now total around $340 million. It also docked the pay of all Fuji Xerox board members and two other senior executives.

Using Fujifilm’s statements and those of its executives, the experts break down the company’s crisis management performance in this instance.

“Fujifilm’s public response to its ‘inappropriate accounting’ crisis was enough to be effective as witnessed by the fact the story lasted no more than a few days in the global news cycle,” said Davia Temin. “While the company’s public responses were terse, minimal and occasionally odd, they were unprecedented in their openness and disclosure.” […read more]