Olympus Corp. is planning to double the number of outside directors to constitute as much as half of its board to help reinforce oversight of management, sources said Thursday.
The step is a response to the current board's failure to prevent the coverup of massive investment losses, a scheme that certain board members, including former Chairman and President Tsuyoshi Kikukawa, actually orchestrated, the sources said.
Olympus' board has 11 members, including three outside directors. But the camera and medical equipment maker plans to add five or six outside members who have no ties to the company and who are well-versed in corporate governance and compliance issues, including lawyers and financial industry executives.
The three current outside directors are expected to be replaced, the sources said.
Until now, Olympus had chosen its outside directors from a pool of candidates who had close ties to its businesses, such as retired brokerage house officials and doctors.
Olympus will present a list of candidates for its new board, including outside directors, to its management reform committee of external experts, and seek its approval before presenting it at an extraordinary shareholders' meeting to be convened in March or April, they said.
According to a third-party panel set up by Olympus to probe its accounting scandal, the company used various measures to cover up ¥117.7 billion in investment losses dating back to the 1990s.