“This is the biggest crisis in Toshiba’s 140-year history, and the first thing we have to do is improve corporate governance, internal controls and corporate culture”, Muromachi told a news conference on Tuesday. Still some investors doubt the restructuring measures as how far these would deliver dividends after the $1.2-billion accounting fraud. “It’s doubtful that they’ll think of themselves as people with skin in the game”, opines Yasuo Sakuma, Executive Officer (Equity investment management) at Bayview Asset Management.
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Toshiba said it would keep interim President Masashi Muromachi in his role for a longer period, maintaining stability but possibly disappointing some investors who hoped for a new leader.
The proportion of outsiders is unusual among Japanese companies.
The restructuring exercise came at a time when Toshiba is reeling under a severe pressure of fraud.
The appointments drew reward for tapping company heavy-hitters, together with one with a document on governance reforms, though some buyers remained skeptical whether or not they would have the power or the motivation to make a distinction. Analysts, though, said that the independent directors lacked the experience and collective confidence to question Toshiba’s top executives.
Reuters adds that the new members would include Mitsubishi Chemical Holdings Corp’s Chairman Yoshimitsu Kobayashi, Asahi Breweries’ former President Koichi Ikeda, and Shiseido Co’s former CEO Shinzo Maeda.
The total number of the company’s board members will be reduced to around 11.
During the last financial year, Toshiba revised its forecast of 120 billion yen profit and postponed its earnings results as an investigation into accounting fraud was going on.
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Toshiba said the size of its expected net loss is not yet known, but it will book an asset devaluation loss of 127 billion yen ($1.0 billion) and 48 billion yen in costs related to litigation and withdrawal from some of its operations.
