Scandal-hit Toshiba and McDonald's Japan were on Friday booted from a stock index launched to highlight firms with the best return on equity and other shareholder friendly criteria.
The shuffle comes as Toshiba grapples with a crisis that exposed a pattern of top executives pressuring underlings to inflate profits by about $1.2 billion since the 2008 global financial crisis.
Meanwhile, shares of McDonald's local unit were also tossed from the JPX-Nikkei 400 as it works to restore its reputation after a series of food contamination scandals, including a human tooth found in some fries.
The Japan Exchange Group said Friday that more than 40 companies were removed from the index, including Toshiba and McDonald's Japan, without giving specific reasons.
The JPX-400 is "composed of companies with high appeal for investors, which meet requirements of global investment standards," the Japan Exchange Group said in a statement.
An independent report commissioned by Toshiba found the problems at the elevator-to-nuclear conglomerate underscored a corporate culture in Japan still beset by collusion in its senior ranks, unquestioning employees and poor external controls.
"It is outrageous that a major company that represents Japan repeatedly padded its profits on a corporate-wide basis," the top-selling Yomiuri newspaper said in an editorial last month.
The JPX-400 was launched last year as part of efforts to boost Japan's lagging corporate governance.
The country's national pension fund -- the world's biggest -- was urged to invest in firms on the list and, in June, Japan adopted a formal governance code.
Long accused of being inattentive to minority and foreign shareholders, and of lacking strong oversight from their boards, Japanese companies are being called on to comply with the changes -- or explain why they cannot.
Japan lags its overseas peers in corporate governance, something critics blame for holding back investment in the country's firms and hurting Japan Inc's reputation abroad.