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Forward of essential AGM, Toshiba board chairman vows to be ‘agent of optimistic change’ By Reuters 

© Reuters. FILE PHOTO: The brand of Toshiba Corp. is seen on the firm’s facility in Kawasaki, Japan February 13, 2017. REUTERS/Issei Kato/File Picture

By Makiko Yamazaki

TOKYO (Reuters) – Toshiba (OTC:) Corp Board Chairman Osamu Nagayama pledged to be “an agent of optimistic change, not a protector of the established order,” as he sought help from shareholders forward of an important vote on director nominees subsequent week that’s seen as tough to name.

Nagayama has come beneath intense stress to resign after an explosive unbiased investigation this month discovered that Toshiba colluded with the Japanese authorities to dam overseas shareholders from having affect on the board.

“Because the chairperson my precedence is to supply Toshiba with the governance and management that you just deserve,” he mentioned in an open letter to shareholders on Friday.

Shareholder advisory teams Institutional Shareholder Providers Inc and Glass Lewis have each really useful in opposition to his reappointment as has Toshiba’s No. 2 shareholder 3D Funding Companions.

Whereas Nagayama who joined Toshiba in mid-2020 has not personally been implicated in placing stress on overseas shareholders, they argue that as head of the board, he ought to take accountability for what they see as dangerous dealing with of the allegations.

At a rare normal assembly in March, Toshiba shareholders efficiently voted for the probe into the allegations that buyers have been pressured forward of final yr’s annual normal assembly. Gaining 58% of the votes, it was a landmark win for company governance in Japan.

However it’s in no way clear that Toshiba’s giant activist shareholder base will win the day once more subsequent week.

Toshiba’s shareholder base has modified considerably for the reason that conglomerate was reinstated within the Tokyo Inventory Trade’s index in late February, bringing in index-linked funds. Whereas a lot of these passive funds weren’t eligible to vote on the time of the March EGM, they now are.

That has made it tough to evaluate whether or not activist or conventional shareholders could have the higher hand on the June 25 AGM.

Within the letter, Nagayama reiterated plans to start an intensive seek for further unbiased administrators and speed up the choice course of for a brand new CEO. He additionally repeated guarantees to launch a strategic evaluate committee instantly after the AGM and start a brand new inquiry into the allegations.

He additionally mentioned the board has employed Makinson Cowell, an unbiased world investor research agency owned by Lazard (NYSE:), to develop the scope of its survey of shareholder opinions whereas the corporate makes essential strategic choices.

Previous to becoming a member of Toshiba, Nagayama had a well-respected profession as CEO of Chugai Pharmaceutical from 1992 to 2018. Chugai grew to become a part of the Roche Holding AG (OTC:) group in 2002.

He was additionally a member of the board at Sony (NYSE:) Group Corp for 9 years till 2019, coinciding with the digital large’s emergence from a turbulent earnings interval to a pointy restoration. Sony on Friday issued a press release in help of Nagayama’s achievements.

“Nagayama, particularly when he served as board chairman for six years since 2013, contributed to build up a governance system that improved company worth by means of wholesome checks and balances,” it mentioned.

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