By T. Jayani, JadeTimes News
Toyota's chairman, Akio Toyoda, is set to face opposition from shareholders at the upcoming annual meeting on June 18, driven by two significant proxy advisory groups advocating for a vote against his reappointment. This follows Toyota's recent apology for fraudulent vehicle certification tests, which have tarnished the company's reputation for quality. Although these issues have not triggered safety recalls, Toyota halted production of three models in Japan.
Despite substantial gains in stock value over the past five years, Toyota's share prices have declined significantly in the wake of these troubles, resulting in a loss of about 3 trillion yen ($18 billion) in market value. Institutional Shareholder Services (ISS), a proxy advisory firm, emphasized Toyoda's ultimate accountability for these issues, criticizing his response for lacking significant board changes.
Glass Lewis & Co., another proxy advisory firm, echoed the sentiment, holding Toyoda responsible for inadequate internal controls and governance within the Toyota Group. They also recommended voting against Toyoda and executive Shigeru Hayakawa, calling for more independent board members and greater transparency, especially concerning Toyota's lobbying on climate change.
Toyoda has promoted a "multi pathway" approach to ecological vehicles, favoring hybrids and hydrogen fuel over fully electric vehicles. Despite the current challenges, he is unlikely to be ousted due to strong support from major Japanese shareholders and affiliates. Last year, Toyoda was re elected with nearly 85% of the vote, though this was a decrease from 96% in 2022.
The recent issues have only affected a small portion of Toyota's global sales, according to analysts. Toyota's profits have doubled in the past fiscal year, and the company remains the world's leading automaker by sales volume.
While acknowledging past scandals, including a significant recall in the U.S. for unintended acceleration, Toyoda expressed a commitment to continuous improvement, stating, "We are not a perfect company. But if we see anything wrong, we will take a step back and keep trying to correct it."
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