Please take note of the following information: Toyota’s Chairman, Akio Toyoda, along with nine other members of the company’s board, were re-elected at the annual general meeting held on Tuesday. Despite concerns about governance and certification test scandals, shareholders reaffirmed their support for Toyoda’s re-election. Although two leading proxy advisers had recommended against Toyoda’s re-election, his re-appointment was widely expected due to shareholdings in the automaker owned by other Toyota group firms, record business results, and his popularity among Japanese retail investors.
Any significant decrease in shareholder support for Toyoda would be embarrassing and could potentially lead to further action on governance reforms. Analysts have suggested that efforts to unwind cross-shareholdings could be accelerated as a result. Toyoda’s approval rating fell to 85% last year from 96% in 2022. The company has faced various safety and certification testing violations at group firms, which have affected its reputation.
Proxy advisers, such as Institutional Shareholder Services (ISS) and Glass Lewis, expressed concerns about the company’s handling of problems and lack of independence on the board. Overseas investors, who constitute a quarter of Toyota’s shareholders, were expected to be the main source of opposition to Toyoda’s re-election.
Despite the challenges, Toyoda remains popular among retail investors and the company’s overall financial performance has been strong. However, the company’s shares fell 10% following revelations of further certification irregularities, despite being up 18% for the year. Toyota CEO Koji Sato reiterated apologies for the certification problems but did not directly address the recommendations from the proxy advisers.
Additionally, shareholders rejected an investor proposal urging greater disclosure of climate lobbying that had been opposed by Toyota.