Scandal-hit Toshiba Corp. appointed new board members Wednesday at an extraordinary shareholders meeting, vowing to improve its corporate culture and governance in the wake of a massive accounting scandal. Shareholders voiced anger over the revelations, and some experts remained skeptical of the Tokyo-based electronics giant’s ability to overhaul its corporate governance.

“We deeply apologize for betraying the trust of shareholders, investors and other stakeholders and causing troubles that brought confusion to the market,” Toshiba President Masashi Muromachi told the meeting in the city of Chiba.

He stressed that the company will do its best to reform.

Many shareholders present expressed frustration with the events that have hammered their investments.

“Toshiba stock went below ¥300 yesterday. I’m beyond being angry — now astounded,” one said.

Others called for the involvement of former presidents in the accounting scandal to be investigated further, expressing doubt that the firm will successfully strengthen its corporate governance.

Toshiba’s new management includes 11 board members, with the number of outside directors increased from four to seven.

The firm will also create new divisions and put more resources into strengthening its governance and internal controls. But experts pointed out that reappointing three members of the previous board was likely to hamper the reform efforts. This made it tough to completely refresh the corporate culture even if new measures were adopted, they said.”Toshiba’s approach to reform its management seems still too soft,” said Masatoshi Yasuda, executive director at the Tokyo-based Institute of Corporate Governance.

The three reappointed board members are Muromachi, fellow company insider Fumiaki Ushio, and Hiroyuki Itami, a professor at the Tokyo University of Science.

Yasuda said the reappointments, especially Muromachi, seemed to show that Toshiba was not really eager to change the corporate culture that led to the accounting scandal.

From fiscal 2009 to 2014, the firm manipulated its accounting to produce a ¥152 billion net profit.

A third-party investigation committee found that Toshiba’s president and two former presidents pressured subordinates to produce a profit. It also found that Toshiba’s corporate culture prevented subordinates from standing up to their bosses.

In July, the three — Atsutoshi Nishida, Norio Sasaki and Hisao Tanaka — resigned from their posts at the time. Muromachi, who was then chairman, took over as president.

The report did not allege Muromachi’s involvement in the accounting manipulation.

Still, Yasuda said Muromachi and others from the previous board should not have joined the new management, as they were senior managers when the profit-padding took place. “The atmosphere, sense of morals and corporate culture that come from the company’s top affect the entire company and its internal controls,” Yasuda said.

He said the fact that Muromachi was staying on will make it harder for Toshiba to abandon its old culture.

“I think it will be best to bring in professional business managers who have no ties with Toshiba’s corporate culture,” Yasuda said.

Institutional Shareholder Services Inc., a U.S.-based corporate governance consultancy, released a statement in which it urged shareholders to reject Toshiba’s proposal to reappoint the three directors.

“The company’s explanation as to why continuity needs to be maintained does not sound convincing, as a thorough change in the corporate culture is urgently needed in order to break away from the past,” ISS said in the statement.

Some media reported that Muromachi intended to step down but was persuaded to stay by past Toshiba executive Taizo Nishimuro, a former president who currently heads Japan Post Holdings Co.

The reports have also alleged strong continuing influence by former Toshiba executives on the company’s senior management. For that reason, Muromachi’s reappointment gives an impression that the firm is still controlled behind the scenes by powerful former executives, experts said.

Muromachi has said he will step down once the firm finds its feet on the path to reform.

Kazuhiko Toyama, vice chairman of Japan Association of Corporate Directors, a body which aims to improve Japanese companies’ corporate governance, said choosing a president was a critical part of corporate governance.

He said it was common in many Japanese firms that the current president and powerful former executives decide who will lead a company, which he said was a risky practice.

“Former executives, they are not with the company anymore. . . . They can’t be responsible for the future, so it is nonsense that such people are involved with appointing the top management personnel, which is the most strategic decision a firm can take in five or 10 years (of its life),” said Toyama.

He added that a nominating committee of outside directors should handle the appointments of senior personnel because they could do the job in a more objective manner. If Toshiba was serious about changing its corporate culture, he said, it should work closely with outside directors, especially on the question of top personnel.

For more information on Toshiba’s accounting scandal, read our Q&A story bit.ly/1ReV2IV.

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