Photo/Illutration Cybozu Inc. President Yoshihisa Aono (Toshiyuki Hayashi)

The software company Cybozu Inc. is taking the unusual step of filling out its board of directors with its own company employees.

The new board members are not all veteran salaried employees, with one only having been with the company a year after graduating from a university before rocketing into one of the top posts.

Company President Yoshihisa Aono, 49, promoted the move as a positive step for the Tokyo-based company, intended to increase diversity among its board members.

“It will lead to a sharing of information regarding company management and makes it possible for any employee to become a board member,” he said.

But outside experts warned the new arrangement could create concerns over its corporate governance because there are no outside directors keeping an eye on management.

Yoshihiko Miyauchi, chairman of the Japan Association of Corporate Directors, said Cybozu’s new board arrangement bucks the trend of companies bolstering their corporate governance through selecting independent board members from outside their own firms.

“It is possible the company could become dominated by the president,” Miyauchi said. “There is a need to strengthen the oversight function by bringing in outside eyes.”

The firm has about 860 employees, of which 17 had submitted board membership applications. All 17 were approved for the top roles at a shareholders meeting held March 28.

Aono is the only one among them to have served as a board member before. Among the new members are a 23-year-old employee in his first year with the company, five women and a 52-year-old American.

Employees who become board members will still have to fulfill their normal work duties and their salary will not change just because they sit on the board.

The new arrangement represents a drastic departure from the former board, which included three men involved in establishing the company in 1997.

The move will produce a curious workplace dynamic where subordinates of higher-ranking employees also sit on the board.

But the meetings should not be entirely unfamiliar to the new members. Cybozu has used video conferencing systems to allow all its company employees to participate in board meetings, as well as in top executive meetings.

The shareholders’ meeting lasted about two hours and 15 minutes, about 30 minutes longer than last year’s session.

Some shareholders raised questions about how allowing the employees to sit on the board could affect how board meetings are handled.

Aono and the founding members of Cybozu own a majority of its shares. A majority of shareholders voted in favor of approving all 17 new board members.

Cybozu has increased its profits through developing groupware--collaborative software that enables people to work on projects together remotely. The company is known for allowing more flexibility among its employees in deciding on their working hours and locations. 

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