In a letter to shareholders late night, Bostock and three other directors -- Vyomesh Joshi, Arthur Kern and Gary Wilson -- have volunteered not to stand for re-election to the company's board.

Yahoo has been struggling to compete with Google and Facebook in an increasingly competitive online space.

The shake-up, which follows the resignation of Yahoo co-founder Jerry Yang last month, is the latest step by Yahoo to right itself amid pressure from shareholders. In September, Yahoo's board fired Carol Bartz as she failed to turnaround the struggling internet firm.

Besides, the board has elected two new independent directors, Alfred Amoroso, former president and chief executive of Rovi Corp, and Maynard Webb, a former chief operating officer at eBay.

Bostock further said that the board would continue its search for additional independent directors.

"We anticipate announcing additional directors to round out the board as soon as this process concludes," Bostock said in a statement.

Bostock, who has led the company since 2008 said the move will help speed the company's transformation under new Chief Executive Scott Thompson, the former president of eBay's Pay Pal unit hired by Yahoo last month.

"Finally, the board has concluded that in order to accelerate the company's transformation, the combination of a new CEO with an enhanced team of independent directors would provide Yahoo with the expertise and perspectives necessary to drive innovation and growth going forward," he said Besides, Bostock said Yahoo was in "active discussions" with its partners in Asia regarding the possibility of restructuring its holdings in Alibaba Group and Yahoo Japan.

"... we have pursued a wide range of discussions with potential partners. We have engaged with potential investors and reviewed proposals concerning an equity investment in the Company, although at this time there have not been any proposals which have been deemed by the committee to be attractive to our shareholders," he said.