Toshiba Corporation has increased the number of outsiders to be part of its board of directors, giving them the majority of the company's 11-member board, according to a report from The Wall Street Journal.
The shake up aims to bolster the company's governance, following a $1.2 billion accounting scandal.
Reuters adds that Toshiba's announcement follows the wave of criticisms it received over the accounting scandal and the efforts of the Japan government to make Japanese companies more attractive to foreign investors.
The government provided companies governance guidelines, one of which include having multiple independent directors.
The changes in Toshiba's board of directors were recommended by an independent panel last month, following the report of the company's improper accounting practices that led to its operating profits to be overstated by more than $1.2 billion over a seven-year period, according to The Wall Street Journal.
The accounting scandal led to Toshiba CEO Hisao Tanaka's resignation.
Reuters added that the company previously had four independent directors, which includes two diplomats. Analysts, though, said that the independent directors lacked the experience and collective confidence to question Toshiba's top executives.
Investigators blamed the improper accounting practice to a company culture that rarely challenged authority figures.
The Wall Street Journal added that Toshiba now has seven outsiders in its board of directors, all of them Japanese.
The company also appointed Masahi Muromachi, Toshiba's interim CEO, to stay on as its permanent CEO.
The Wall Street Journal added that Hiroyuki Itami, Toshiba's independent director who led the committee overseeing the shake-up, said that "Muromachi's leadership is a must for Toshiba."
Itami was the only independent director to remain in the board of directors after the shake-up.
Reuters adds that the new members would include Mitsubishi Chemical Holdings Corp's Chairman Yoshimitsu Kobayashi, Asahi Breweries' former President Koichi Ikeda, and Shiseido Co's former CEO Shinzo Maeda.
Toshiba will seek the approval of its changes in its shareholders meeting late in September, Reuters reported.
