Toyota Motor Corporation’s Chairman, Akio Toyoda, is expected to secure re-election at the automaker’s annual general meeting (AGM) despite recent governance scandals. However, any significant decline in shareholder support could prompt Toyota to intensify governance reforms.
The AGM follows issues involving certification violations at Toyota and its subsidiaries, including Daihatsu and Hino Motors. Proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis have recommended against Toyoda’s re-election, citing concerns over governance practices and board independence.
Toyoda, the longest-serving director on Toyota’s board and grandson of the company’s founder, has seen his approval rating drop from 96% in 2022 to 85% last year. Although he only requires a simple majority for re-election, these governance concerns cast a shadow over his leadership.
Analysts suggest that Toyota may accelerate efforts to address these issues, possibly by reducing cross-shareholdings in non-automotive sectors. Despite the scandals, Toyota’s business performance has been strong, with significant stock gains and record profits driven by a weak yen and increased hybrid vehicle sales.The outcome of the re-election vote will be revealed on Tuesday, with the approval rate disclosed on Wednesday.
ISS criticized Toyoda’s handling of certification irregularities, holding him ultimately accountable. Glass Lewis echoed these sentiments. He highlighted the board’s lack of independence and strategic issues. In response, Toyota emphasized its commitment to addressing past mistakes and enhancing governance under Toyoda’s leadership.
Source: Reuters