Hitachi Ltd.’s board of directors will contain a majority of members from outside the company, including two new foreigners, the company announced April 24.
The 13 candidates for the board, including seven outsiders, are expected to receive approval at the company’s general shareholders meeting in late June.
Hitachi will be the second major electronics manufacturer in Japan to have a majority of outsiders on its board, following Sony Corp.
Hitachi’s move was aimed at improving corporate governance and demarcating management responsibility for the execution of business operations, the company said. Currently, four of Hitachi's 12 directors are outsiders. One foreigner on the board is expected to maintain the post.
The two new non-Japanese candidates are George Buckley, executive chairman of the board at 3M Co. in the United States, and Philip Yeo, chairman of SPRING Singapore.
Hitachi adopted the “Company with Committee” system in 2003 to reflect outside members’ views in personnel decisions and management audits.
Only 50 companies, or 2 percent of those listed on the Tokyo Stock Exchange, have adopted such a system, and about 20 of them have a majority of outside board members.
Companies are strengthening their corporate governance amid a sense of distrust toward management at Japanese firms following Olympus Corp.’s accounting fraud scandal and revelations that a former Daio Paper Corp. chairman borrowed huge sums from group companies for his gambling habit.
Olympus on April 20 decided to make outsiders the majority on its board of directors.
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