Japanese companies have never been good at dealing with activist shareholders, but Toshiba Corp. appears to have taken that fight up several notches by colluding with the government to fend off activists' influence.

This time, the industrial giant may have gone too far, and the scandal has raised key questions about the firm's governance.

Now, an annual general shareholders meeting on Friday is set to be a showdown between Toshiba’s board of directors, who are pushing to retain their chairman, Osamu Nagayama, and investors who want him out.