Toyota Motor shareholders on Tuesday backed Chairman Akio Toyoda and the nine other members of the automaker’s board, despite governance concerns raised by two key proxy advisers.
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Toyota Automotive Shareholders on Tuesday backed Chairman Akio Toyoda and the nine other members of the automaker’s board despite two key proxy advisers raising corporate governance concerns.
Akio Toyoda’s re-election as chairman became the focus of the annual shareholder meeting after proxy advisers recommended that investors vote against it.
Shareholders also rejected an investor proposal that would have pushed Toyota to further disclose its climate lobbying efforts, but Toyota opposed it. Details of both votes will not be released until Wednesday.
The grandson of the company’s founder, Toyoda remains popular with retail shareholders. He is credited with leading the company to another record profit and strong stock performance last year.
“I used my retirement bonus to buy Toyota stock,” Hidenori Takahashi, 84, told Reuters before the meeting, adding that he believed it was “the best company in Japan” for shareholders. .
He said the ongoing certification issues plaguing the carmaker were “a bad thing” but Toyoda appeared eager to take steps to prevent wrongdoing from happening again.
While Toyoda faces little risk of re-election, a sharp drop in his approval ratings could be an embarrassment for a company that has been the world’s best-selling automaker for four consecutive years.
Toyoda’s approval rating dropped from 96% in 2022 to 85% last year.
The automaker has been dogged by a series of safety and other certification test violations by Toyota and its group companies, including small carmaker Daihatsu. Institutional shareholder services raised questions about the automaker’s handling of the issue.
Glass Lewis, who advised Toyoda not to be re-elected for a second consecutive year, said he took responsibility for the board’s lack of independence and cited concerns about its strategic holdings and return on equity.
Since the agency consultants made their recommendations, more certification violations have come to light.
In early June, Toyota said it had erroneously conducted six different vehicle certification tests in the past, including three models that are still on sale.
The company said its misconduct included conducting some tests under more stringent conditions than those mandated by the government, invalidating the results.
Toyota previously told Reuters that reflecting on its mistakes has long been embedded in its corporate culture and that Toyoda will take the lead in re-inculcating that culture and working with group companies to ensure effective governance.
Toyota shares have fallen 10% since the new news broke, but are still up 18% this year.
