The Toshiba chair was sacked by a report on alleged government collusion

Toshiba shareholders have removed the chairmanship of the company’s board of directors in a historic vote that tipped one of the country’s most famous corporate names into unfamiliar territory and laid the groundwork for investment activism in Japan.

Friday’s shareholders ’decision to vote against the appointment of Osamu Nagayama as chairman of the annual meeting was described by some of Toshiba’s top investors as an inevitable consequence of the company’s long-standing failure to establish better governance.

The vote against the presidency was not just exceptionally rare in a corporate world where management tends to offer unquestionable support, but it was especially striking as it brought down a widely respected business leader.

The AGM followed the publication this month of a explosive independent report to the events surrounding Toshiba’s 2020 annual meeting. The report was a collusion between the company and the Japanese government to suppress activist shareholders.

In addition to revealing contacts between Toshiba and Japan’s Ministry of Economy, Trade and Industry on how to deal with shareholders, the report’s findings contrasted with the company’s own efforts to investigate the allegations surrounding the AGA.

The report concluded that the 2020 AGM had not been conducted fairly, while Toshiba’s own investigation, under the supervision of its audit committee, found no evidence of pressure from the company. about shareholders.

Since its publication, the independent document has been cited by investors and CEOs as a reason to vote against Nagayama’s new appointment, who has been chairman of the board for the past year and chairs the nomination committee.

Nagayama was nominated for roles after the 2020 AGM and was not criticized in the independent report, but investors argued should be responsible by the way Toshiba’s own research was conducted.

Shareholders also rejected the new appointment to the board of directors of Nobuyuki Kobayashi, another member of the audit committee, at the meeting, which lasted two and a half hours.

Prior to his stint at Toshiba, Nagayama was known to help transform Sony and turn Chugai Pharmaceutical into a global player through its capital bond with Switzerland’s Roche.