Toshiba proposes outsider-heavy board; interim CEO to stay

TOKYO (REUTERS) - Toshiba Corp proposed a new slate of outsiders to take a majority of seats on its board of directors, aiming to bolster governance of the laptops-to-nuclear conglomerate following a US$1.2 billion (S$1.68 billion) accounting scandal.

A new board lineup proposed on Tuesday also kept interim President Masashi Muromachi in his role on a more permanent basis, confirming media reports, maintaining stability but possibly disappointing some investors who hoped for a new leader.

Toshiba's board overhaul follows criticisms over the scandal and coincides with government efforts to make Japanese companies more attractive to foreign investors by adopting governance guidelines for listed firms, including appointing multiple independent directors.

The company previously had four outside directors including two former diplomats, but analysts said they likely lacked the experience and collective confidence to question top executives. Investigators last month blamed Toshiba's accounting irregularities on a corporate culture that rarely challenged authority figures.

Toshiba said it would now have seven external directors on its 11-member board.

The new members include Mitsubishi Chemical Holdings Corp Chairman Yoshimitsu Kobayashi, who is also leader of the influential Keizai Doyukai group of corporate executives, as well as former Asahi Breweries President Koichi Ikeda and former Shiseido Co Chief Executive Shinzo Maeda.

Toshiba will seek approval of the candidates at an extraordinary shareholders' meeting in late September.

The company also said it was likely to report a net loss for its latest financial year ended in March, as it takes 127 billion yen (S$1.43 billion) in impairment charges to reflect writedowns in its nuclear business as well as semiconductor and appliance units.

Toshiba had originally projected a net profit of 120 billion yen for the last fiscal year but withdrew that forecast in May and delayed its earnings announcement pending the results of an investigation into its accounting irregularities.

It also estimated on Tuesday an operating profit of 170 billion yen for the latest financial year.

Shares of Toshiba ended flat ahead of the announcement of the board changes, which had already been reported in domestic media.