Corporate Governance Problems at Seibu, Japan's Major Private Railway: Board to be Blamed?



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Code : GOV0019

Year :
2005

Industry : Transportation

Region : Japan

Teaching Note: Not Available

Structured Assignment : Not Available

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Abstract: Seibu Group is a giant Japanese conglomerate with assets estimated at 1.8 trillion yen, with its principal business operations in railways, tourism and real estate. The group's flagship company, the Seibu Railway Company is Japan's major private railway company. Though Seibu has grown into a major group, due to poor corporate governance, it was mired in losses and scandals in 2004. As a result, many board members including the chairman Yoshiaki Tsutsumi quit the company. In addition, the Tokyo Stock Exchange de-listed the company, which resulted in the major decline of its share value. To revive its fortunes, the company established a reform committee with outside members and decided to improve corporate governance practices.

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Pedagogical Objectives:

  • To understand the evolution of Seibu over the decades, the scandals and the efforts of revival by the reform committee of the company
  • To discuss corporate governance issues like role of board, chief executive officer's intervention, restructuring plans and the future of Seibu.

    Keywords :Corporate Governance Case Study, Seibu Group Seibu Railway Company Kokudo, Japan’s major private railway, Japanese corporate governance practices, Board’s role family owned business, Restructuring plan revival options, Yoshiaki Tsutsumi, Tokyo Stock Exchange (TSE), Diversification expansion strategies, Scandals and controversies, Incompetent management and poor decisions, Reform committee future of Seibu, Chief executive officers (CEO’s) intervention, Delisting and bankruptcy, Japanese Security Exchange Commission (JSEC)

    Contents :
    » Seibu: A Brief Profile
    » Troubles at Seibu
    » Seibu’s Corporate Governance and Constitution of the Board
    » Reviving Seibu and Reforming Corporate Governance at Seibu


    Case Introduction >>


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