Toshiba chief executive steps down amid restructuring efforts

Toshiba chief executive Satoshi Tsunakawa is stepping down as the embattled Japanese technology giant seeks to restructure and restore its reputation.

Mr Tsunakawa will be replaced by Taro Shimada, an executive officer and corporate senior vice president, under a decision made at a board meeting on Tuesday, the Tokyo-based company said.

Mr Shimada was an executive at Siemens, in Japan and the US, before joining Toshiba in 2018, working in its digital operations.

He faces the challenge of leading a restructuring plan which has drawn criticism from shareholders. In February, Toshiba said it planned to split into two companies, one focused on infrastructure and the other on devices.

Mr Shimada said he takes pride in being the first CEO with a background in digital technology and hopes that will be a plus for Toshiba’s energy business.

“I have been at Toshiba for only three years, but I love Toshiba,” he said.

Asked about how he hoped to win over critical shareholders, he said he had learned while working in the US about the importance of communicating as equals, referring to the expression “put yourself in someone else’s shoes”.

The restructuring proposal is still subject to shareholder and regulatory approval. An extraordinary shareholders’ meeting is set for March 24, when the plan will be put to a vote.

Toshiba officials told reporters the management change was timed to happen before that, although it was unclear how that might help win over shareholders.

The firm scrapped an earlier proposal for a three-way split, which was not popular with shareholders, including foreign funds.

Approval for Tuesday’s personnel changes, including a resignation of another board member, and the nomination of two others, will be sought in a shareholders’ meeting in June, Toshiba said.

The firm was one of Japan’s most revered brands but has been struggling since the Fukushima nuclear disaster in March 2011. A tsunami sent three reactors into meltdown, spewing radiation over an area that is still partly a no-go zone.

Toshiba is involved in the decommissioning effort, which will take decades.

The company’s reputation was also tarnished by an accounting scandal which involved books being doctored for years.

Nobuaki Kurumatani resigned last year as Toshiba president and Mr Tsunakawa took the helm. Mr Kurumatani had headed global fund CVC Capital Partners’ Japan operations and became CEO in 2018.

Mr Tsunakawa said he had accomplished his mission of handing over the leadership to the next generation and hoped Toshiba’s shareholders, customers and employees would agree with the proposed restructuring plan.

“I am confident I was able to hand over the leadership toward Toshiba’s evolution into the future,” he told reporters in an online news conference.

He defended the decision to appoint Toshiba people, not outsiders, to senior positions, stressing that the company needs to change from within. This may be Toshiba’s last chance to fix its reputation and brand power as a technology company and win back trust, he said.

Founded in 1875, Toshiba was a manufacturing pioneer for everything from electric rice cookers to laptop computers. It also invented flash memory, although that division was sold off as its fortunes tumbled.