The strong shareholder rebuke on Friday of Toshiba Corp.'s plan to retain two outside directors in charge of overseeing management is set to deepen the woes of the industrial conglomerate tarnished by its alleged collusion with the government.
Toshiba has spent years since its 2015 accounting scandal trying to enhance corporate governance. Introducing directors from outside the company and the appointment of board Chairman Osamu Nagayama, a former outside director at Sony Corp. and currently honorary chairman of Chugai Pharmaceutical Co., were part of its efforts.
The shareholder revolt, led by foreign activist investors, against the approval of Nagayama as chairman and another external director has added to the tumult at Toshiba over the past few months, marked by the abrupt departure of former CEO Nobuaki Kurumatani in a management spat over a buyout offer by a British equity fund.