Mizuho Financial Group Inc. is doing away with the kind of opaque leadership selection process that's common in the nation, vowing to ensure its next chief executive is chosen openly and fairly.

The successor to CEO Yasuhiro Sato will be determined by a group of external directors rather than past leaders, said Hiroko Ota, chairman of the board of Japan's third-largest lender by market value. The former economy minister is one of four outsiders who sit on the nomination panel that Tokyo-based Mizuho set up as part of a three-committee governance system in 2014.

Mizuho became one of the few Japanese firms to adopt such a model for oversight after it sought to bolster transparency and supervision following years of regulatory infractions and criticism for internal factionalism. Prime Minister Shinzo Abe is pushing firms to improve governance and cater more to shareholder interests, including by opening up how they choose leaders and elevating more women to management roles.