Three-way splits were all the rage when Toshiba put forward its plans to do so in November, hot on the heels of the US titan General Electric doing the same. The $18 billion Japanese conglomerate is, however, now reverting to a more conventional two-part breakup to save costs, while pushing ahead with other unit sales. Pragmatism is a virtue, although it doesn’t replace the value of a long-term vision shaped by permanent leaders.

Under the new plans, only Toshiba’s devices unit will be spun off, leaving its infrastructure and energy business with the parent, as well as its 40 per cent stake in chipmaker Kioxia. Meanwhile, three non-core units will go on the block over the next year, in addition to the $870 million sale of a 55 per cent holding in an air-conditioning business to partner Carrier Global. The revamped re-organisation, by company estimates, will free up 300 billion yen ($2.6 billion) to return to shareholders over the next two years.

The latest details and the speed of the planned sales suggest scandal-wracked Toshiba is at least heeding its large activist investors, who were left fulminating after its November proposals fell far short of their calls for a straight sale to a private equity buyer. That was — and is — a big ask in corporate Japan, where even offloading divisions to buyout shops like Bain and KKR is still relatively rare. And that’s before factoring in the politics involved with privatising a household name like Toshiba.

Lacking strategy

The deep distrust between Toshiba’s management and angry activists along with an unimpressive 2 per cent increase in the stock on the news suggest its antsy shareholders are not entirely placated by the new plans.

For the company to be sure of getting the breakup over the line — a two-thirds majority vote is likely to be needed — it will have to do more. It could start by installing a new chair and chief executive.

The current incumbent, 66-year-old Satoshi Tsunakawa, is only the interim boss, a company lifer who retook the CEO role in April and added the chairmanship in June following the defenestration of his predecessors. Formulating a strategy before finding the right people to carry it out was sensible enough, but at best only partly solves the company’s near-term problems with activists. Longer term, Toshiba still needs a more direct strategy for growth and the leaders who will see it through.