No, that's not the time it took for Toshiba Corp. to find a buyer for its memory chip unit. Nor is it how long it pretended to listen to activist shareholder concerns. It doesn't even signify how many months of due diligence the company should have undertaken before signing off on a disastrous move into nuclear power plants more than a decade ago.
That's the paltry reduction in the average age of Toshiba's "new" board of directors. Ignoring the objections of investor advocacy groups, Toshiba's shareholders on Tuesday elected their own slate of nine men and one woman with an average age of 68 years and 10 months. That's down from 69 years and three months, according to Gadfly calculations, as two directors were replaced.
Glass Lewis & Co. and Institutional Shareholder Services Inc. recommended against half of those 10 being elected, including a push to have President Satoshi Tsunakawa removed. They lost.
It's not that the age of these men and women is in itself a problem, but it is a symptom of the aging power structure that has overseen multiple blunders at Toshiba, including an accounting scandal, that ill-informed nuclear bet and a bungled chip unit sale process. Some of that drama happened before the current board's time, but even what they have overseen is of concern.
Both ISS and Glass Lewis noted the role of various directors in the tortured accounting process that resulted in Toshiba failing to get an unqualified opinion from its audit firm after the nuclear losses surfaced.
Since then, executives have made claims about implementing structural reform and ensuring management systems will be improved.
Investors, however, have learned not to listen. By ignoring what was a reasonable set of proposals from proxy groups and pushing forward with a familiar selection process, Toshiba missed the opportunity to send a message of transformation rather than preservation.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
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