Report: Analysis of TEPCO's Corporate Governance and its Failures

This report provides a comprehensive analysis of the corporate governance structure of the Tokyo Electric Power Company (TEPCO), focusing on the failures that led to the Fukushima Daiichi nuclear disaster. The report examines the composition of the board of directors, highlighting the dominance of internal members and the limited external perspectives, which contributed to poor risk management and decision-making. It discusses the discrepancies between TEPCO's stated commitment to corporate governance and its actual practices, particularly in relation to environmental protection and stakeholder safety. The report suggests recommendations for improvement, including the incorporation of external directors, and emphasizes the importance of ethical leadership and a focus on environmental and social responsibilities. The analysis draws upon the case study to provide insights into how corporate governance failures can impact a company's operations and its relationship with society, and provides a detailed analysis of the failures and their potential impact. The report aims to provide a comprehensive understanding of the issues surrounding TEPCO's governance and offer practical recommendations for improvement.

Assessment 1: 2. Stewardship
and Governance

TABLE OF CONTENTS
REFERENCES................................................................................................................................4

1) It can be stated that from above discussion and analysis of case study that structure of board
of directors of Tokyo electric power have contributed towards failure of operation of business.
The company was mainly dominated by internal directors that are high qualified in terms of
seniority within firm. Therefore, only 2 directors are appointed from outside whereas all 18
directors are from inside company such as Tomijirou Morita was financial directors in TEPCO
that was a chairman of Dailchi life insurances. Tsuneshisa Katsumata was replaced by masataka
Shimizu that was long term employee within organisation so firm have always recruit or select
board of directors from inside organisation than outside (Tokyo Electric power and the disaster at
Fusushima Daiichi, 2019). Most of the Japanese think that much intervention from outside can
adversely impact on company operation and security of information. Thus company have
minimum number of directors from outside that lead to less knowledge of external changes and
the way company can contribute more to society.
2) Company have stated in its official website that it is highly committed and dedicated to sound
corporate governances and have make various policies and procedure so that firm can grow and
sustain its operation for longer time frame. The content on website also included that TEPCO
belief in mutual trust and providing more benefits to all stakeholders of company such as
employees, customers, suppliers and investors. Organisation is highly working towards
enhancing its organisational structure, abiding to legal laws and ethical audit practices so that no
harm can be caused to other individuals that are living in society. Regular meeting are been held
by directors on various management issues so that accurate decision can be find to resolve
problem and delivered best services to customers.
But it has been founded that due to failure of risk management system all such problem
have to be faced by company as well as society. In appropriate decision have caused damaged to
agriculture by promoting more radio activities in soil and sea, there was high concerned related
to long term strategies of firm. Due to ratio supply of power there was much disruption in
manufacturing of products that have adversely impacted on operation and growth of firm. It can
also be stated that TEPCO has history of safety violence that have caused threat to life of various
individuals or following earthquake. Therefore, it can be stated that there is high discrepancies
between company alleged concern for corporate governances in its websites and catastrophic
failure.
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3) It can be suggested or advices to chairman of TEPCO is that it needs to select directors outside
the company in order to have mix combination of both internal and external for expansion of
business in future circumstances. Directors need to think more about that management styles
and decision making so that no harm can be caused to other individual that reside in society
(Keay, 2017). Chairman in its decision making have to select director that are concerned about
environment protection or health, security of local residents for smooth operation of business.
Therefore, company by making certain changes can enhance its market operation and adhere to
corporate social responsibilities.
REFERENCES
Books and Journals
Keay, A., 2017. Stewardship theory: is board accountability necessary?. International Journal of
Law and Management.
Online
Tokyo Electric power and the disaster at Fusushima Daiichi, 2019, [Online] Available Through:
<https://corporategovernanceoup.wordpress.com/2011/04/20/tokyo-electric-power-and-
the-disaster-at-fukushima-daiichi/>.
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