Japan's Toshiba proposed a new board on Tuesday dominated by outsiders, including three former chiefs of big Japanese companies, that it hopes will help to reform the conglomerate after a $1.2 billion accounting scandal.
The appointments drew praise for tapping corporate heavy-hitters, including one with a record on governance reforms, although some investors remained skeptical whether they would have the ability or the motivation to make a difference.
"The impression one gets is that these newly appointed outsiders are simply taking a turn doing a task for the business community," said Yasuo Sakuma, executive officer of equity investment management at Bayview Asset Management.
"It's doubtful that they will think of themselves as people with skin in the game," he said. "They're stuck with the hot potato and must be at a loss as to what to do."
Toshiba has drawn fire for Japan's biggest accounting scandal since endoscope and camera maker Olympus was caught four years ago in a $1.7 billion scheme to conceal two decades of investment losses. Olympus also responded by appointing outsiders as a majority of its board.
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.
"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. He did not say how long he would remain president but said it would not be a long time and the company would look for a younger replacement.
The new board members include Mitsubishi Chemical Chairman Yoshimitsu Kobayashi, 68, who is also leader of the influential Keizai Doyukai group of corporate executives, as well as former Asahi Breweries President Koichi Ikeda, 75, and former Shiseido Chief Executive Shinzo Maeda, 68.
Maeda, who served as president of the cosmetics giant until 2014, oversaw the establishment of a board nomination advisory committee, increased the number of outside auditors and hired outside directors.
Toshiba named six new outsiders, replacing three who had come under criticism for lacking the experience or confidence to question top executives.
Following approval of the candidates at an extraordinary shareholders' meeting in late September, Toshiba will have seven external directors on its 11-member board.
The Japanese government is trying to make companies more attractive to foreign investors by adopting governance guidelines for listed firms, including appointing multiple independent directors.
Toshiba shares ended flat ahead of the announcement of the board changes, which had already been reported in domestic media. They have fallen nearly 30 percent since the start of the year, hovering near a two-and-a-half year low hit last month after Reuters reported that the company would face up to $3 billion in charges over the scandal.
Toshiba said on Tuesday that it would take 127 billion yen ($1.02 billion) in impairment charges for the latest financial year ended in March to reflect writedowns in its nuclear business as well as semiconductor and appliance units.
That will result in a net loss for the full year and an estimated 170 billion yen operating profit, below a previous projection of 330 billion yen that was pulled in May when it widened its accounting probe.