The company says Woodford had “largely diverted” from the rest of the management team and that the rift was causing decision-making problems.

Its board of directors met Friday and unanimously demoted Woodford to director, the company said in a statement. It appointed Chairman Tsuyoshi Kikukawa to replace him.

Woodford, a British national, was among a handful of foreigners leading major Japanese companies. His appointment came amid a push by Olympus to make itself more globally competitive.

Woodford did not attend Friday’s board meeting.