Tokyo Electric Power Company (TEPCO) Case Study and Governance

This case study analyzes the failures of the Tokyo Electric Power Company (TEPCO), focusing on its corporate governance structure and the role of the board of directors. The analysis examines how the board's composition, with a significant number of directors and auditors, contributed to organizational failures. It also explores the discrepancies between the company's stated commitment to corporate governance and the catastrophic outcomes, highlighting the emphasis on management over governance and the lack of independence among board members. The study offers advice to the TEPCO chairman, emphasizing the need for improved communication, transparency, and the development of a new corporate governance framework to foster teamwork within the organization. The assignment is based on the provided case study and video, providing a detailed understanding of the issues.

Running Head: STEWARSDHIP AND GOVERNANCE 1
Stewarsdhip and governance
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How did the board structure contribute to the failures?
For the success of an organization, corporate structure plays a major role. However, for
the case of the TEPCO the board of the directors is composed of the 20 directors and 7 auditors.
Besides, it has 2 external directors and also 4 external auditors (Tricker, 2015). This organization
shows that unstable opinions and decisions are making in the organization. Moreover, the
meeting between the directors is conducted just once in a month. All the promotions and
establishments are made based on the discussion of the outsiders. This is poor construction and
this has lead to failure of the organization (Tricker, 2015). This failure of the organization as well
led to the failure of the supervision process in the organization. The outcome effects have led to
damage to Japan's many aspects such as the agriculture sector, fishing among others.
How do you account for the discrepancies between the company’s alleged concerns for
corporate governance on its website and the catastrophic failure?
Firstly, it is seen that the company has a stiff commitment to the governance but some
evidence evident can be pointed out just from the official webpage of the organization based on
the issues of the organizational governance. It seems the organization has invested much in
management than governance. All the 18 directors are on top and they focus on the tenure
process instead of the quality of performance (Tricker, 2015). The other 2 are not independent
and no executive. This leads to confusion to outsiders as they may not understand the functioning
of the organization. This raises the red flag and doubts on the loyalty of the company hence the
catastrophic failure.
What advice would you give to the chairman of TEPCO?
I would advise the chairman of the TEPCO to improve on communication within the
organization and the public. The problem arises when they leave the public on long awaiting

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time of getting the information regarding the organization. They should as well check on precise
of the information provided because they give too much information that ends up confusing the
public. I would further advise the Chairman of TEPCO that there is a need for the generation of
the new governance corporate that will assist in having teamwork from the top rank officials to
lower-level officials.

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Reference
Tricker, B. (2015). Corporate governance: Principles, policies, and practices. Oxford
University Press.
https://www.youtube.com/watch?v=qXXc6eT1cPo&feature=youtu.be