Walt Disney, the entertainment giant behind Mickey Mouse, has said it may shake up its board after admitting it employed the children of independent directors.

In a filing to the US stock market regulator, Disney said it had employed the children of three independent board members in the last year.

Disney said it was considering "appropriate steps" to apply standards of corporate governance recently set out by the New York Stock Exchange (NYSE).

"These steps will include a reduction in the board's size and reorganisation and reduction in the size of board committees," said Disney.

New rules

The NYSE's recommendations stipulate that directors cannot be considered fully independent if a member of their family has worked for the company within the last five years, the Wall Street Journal reported.

Disney already has rules in place saying directors who have immediate family members working for the company do not qualify as independent, the newspaper said.

However, Disney's definition does not include self-supporting adult children.

The NYSE has not yet decided who is, or is not, an immediate family member, the paper said, citing an NYSE spokesperson.

Shareholder criticism

The three independent directors were Stanley Gold, Raymond Watson and Reveta Bowers, Disney said in its filing.

Mr Gold, who chairs the firm's corporate governance committee, has been strong supporter of tougher standards, analysts say.

Of the three, Mr Gold is viewed as particularly influential, and played a strong role in the choice of Michael Eisner as Disney's chief executive in 1984.

Disney's board has often been criticised by shareholders as lacking in independence, long before accounting scandals at Enron and WorldCom focused attention on cleaning up the way companies are run.

Mr Watson and Ms Bowers both serve on the audit committee and the compensation committee, which sets the salaries of executive directors.

If the three are no longer considered to be independent directors then some board committees would have be reshuffled because they are restricted to independent directors.

However, it is thought unlikely that any of the three would have to resign.

Relative values

The relatives include Craig Bowers, who was hired by Disney last year in its internet division. He no longer works for the company.

There is also Jennifer Gold who was employed in consumer products, and David Watson who worked for the Disney Channel.

Mr Watson received a salary of $152,608 (�99,000), while the other two were paid about half that.

Disney's profits dropped 31% to $364m in the three months to June 30, compared with $527m a year earlier.

The company has been grappling with weak audience figures for its ABC TV channel and the impact of the slump in travel and tourism on its theme parks.