Overview
Toyota Chairman Akio Toyoda and nine other members of the automaker’s board were re-elected at an annual general meeting, despite concerns about governance and certification test scandals. Toyoda’s re-election was widely expected, given the support from other Toyota group firms, record business results, and popularity among Japanese retail investors. However, shareholder support for Toyoda has decreased slightly, raising questions about governance reforms.
Proxy Advisers’ Recommendations
Leading proxy advisers, including Institutional Shareholder Services and Glass Lewis, recommended against Toyoda’s re-election due to concerns about governance issues, lack of board independence, and strategic shareholdings. While overseas investors, who make up a quarter of Toyota’s shareholders, are likely to have opposed Toyoda, he remains popular among retail investors.
Certification Test Scandals
Toyota has been plagued by a series of safety and certification testing violations at group firms, including Daihatsu. Recent revelations of additional certification irregularities have affected the company’s stock performance, despite record profits and a strong performance in the previous year. Shareholders are concerned about the impact of these issues on Toyota’s reputation and future performance.
Response from Management
Toyota CEO Koji Sato apologized for the certification problems but did not directly address the recommendations from proxy advisers. The company has taken steps to prevent similar incidents from occurring in the future, but shareholders are calling for greater transparency and accountability in the wake of these scandals.
Shareholder Proposals
Shareholders also rejected an investor proposal calling for greater disclosure of climate lobbying, which had been opposed by Toyota. The company’s response to shareholder concerns and its handling of governance issues will be closely watched in the coming months as investors look for signs of improvement and accountability.