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Toshiba in turmoil

Toshiba to make 80% of its board independent

Four foreign members to be seated amid mounting activist pressure

Chairman and CEO Nobuaki Kurumatani speaks during a press conference in Tokyo on May 13. (Photo by Yoichi Iwata)

TOKYO -- Toshiba will shake up its board so that 80% of the directors come from outside the company, a rare move for a Japanese corporation. It will also name foreigners to the board, which is currently 100% Japanese.

The struggling industrial conglomerate is banking on a revamped board to speed up its reconstruction. The move comes amid mounting pressure from overseas activists and other investors.

The new directors are expected to include Paul Brough, chairman of Noble Group, a Hong Kong-based commodities trader. The group underwent restructuring of $3.5 billion of debt.

After a crisis stemming from the bankruptcy of Westinghouse, its U.S. nuclear power subsidiary, the group last year sold its key semiconductor maker, which has left the conglomerate without a significant profit earner.

Toshiba expects the moves to improve the board's oversight function and allow management to receive better advice on selling subsidiaries and on mergers.

Toshiba's 12-member board will include 10 outside directors after the shake-up, up from the current seven.

The group on Monday announced the newly nominated director candidates, who are expected to be approved at a general shareholders meeting in June. Chairman and CEO Nobuaki Kurumatani as well as President and Chief Operating Officer Satoshi Tsunakawa will retain their positions on the board.

Four of the 10 independent directors will be foreigners; the current seven independent directors are Japanese.

Toshiba expects its annual operating profit to surge to 140 billion yen ($1.2 billion) for the fiscal year through March 2020, up fourfold from the previous year, helped by a series of restructuring moves made last year.

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