Japan's Olympus demotes first-ever foreign chief

Japan's Olympus said Friday it had stripped the company's first ever non-Japanese president of his title, just six months after appointing him and only two weeks after he was also named chief executive. Citing management differences, the camera and precision devices maker said it had demoted Briton Michael Woodford over "a big gap" between him and other board directors on company management and strategy. It argued the discord was hampering business decision making. Olympus said the 51-year-old Woodford had been stripped of his duties and demoted to the post of director without executive authority. Chairman Tsuyoshi Kikukawa replaced Woodford, and will hold two posts. "He ignored our organisational structure and made decisions entirely on his own judgement," Kikukawa told a hurriedly arranged news conference in Tokyo as he announced Woodford's demotion. Kikukawa added that Woodford would often bypass the head of one of the company's divisions to give orders directly to employees, in defiance of efforts to create a Japanese style of global management. "I told him repeatedly he couldn't do that, but he didn't listen," Kikukawa said. Woodford was the firm's first ever non-Japanese president and the only foreign executive on its 15-member board. Public boardroom spats are extremely rare in Japan, but all the more virulent when they emerge. In cases where tensions do erupt, problems are often rooted in efforts by incoming management to make a significant break with past practices, sometimes involving restructuring. Olympus shares tumbled 14.1 percent to 2,132 yen in early afternoon trade, after initially plunging more than 17 percent on the news. "(His stepping down) came out of the blue," Naoki Fujiwara, a fund manager at Shinkin Asset Management, told Dow Jones Newswires. Investors were selling due to increased uncertainty over the company's management direction, he said, adding that some may also be disappointed since foreign executives are rare at Japanese firms. A handful of high-profile foreign chief executives at Japanese companies include Howard Stringer at Sony and Carlos Ghosn at Nissan. The decision was also surprising because two weeks ago, Olympus said "the board have been extremely pleased with the progress made under Mr Woodford's leadership," in comments just six months after his appointment as president. His work has "exceeded the expectations at the time of his appointment," the company said earlier, adding that the board had met to appoint him as CEO in addition to his responsibilities as president. Olympus said the decision on his removal as president and chief executive was approved unanimously by directors at Friday's board meeting. Woodford was previously executive managing director of Olympus Medical Systems Europa, after joining a British subsidiary of the Japanese firm in 1981.