Opposition to Toyota CEO Akio Toyoda spreads among large shareholders | World news

As large shareholders begin to reveal why and how they voted at Toyota’s annual meeting in June, their criticisms and concerns cast doubt on Toyoda’s chances of being reappointed next year. Domestic banks and brokerages, including institutional investors, make up nearly 40 percent of Toyota’s shareholders. As the largest bloc, a change of heart within these ranks could have a decisive impact on the president’s term.

Industry associations encourage institutional investors in Japan to make voting results public, although disclosure often takes several months.

Toyoda himself said in July during a podcast published on the company’s news website that his seat on the board would be at risk if shareholder support continued to decline. “No board member in Toyota’s history has seen such a low level of support,” he said during an interview with Toyota Times.

Mitsubishi UFJ Asset Management Co. she opposed the reappointment of Toyoda, as well as Vice President Shigeru Hayakawa and President Koji Sato. Top management faces responsibility for vehicle safety scandals at Daihatsu Motor Co. and other Toyota Group companies, he said, adding that the alarm should be raised over governance issues.

After Toyoda became president in 2009, his shareholder approval rating rarely fell below 90 percent. That is until a government investigation uncovered decades of false vehicle certifications at Daihatsu in December, then at Toyota Industries Corp. a few weeks later and in June at Toyota itself.

For Toyoda, the grandson of the company’s founder, shareholder approval dropped to a record low of 85 percent last year and then dropped again to 72 percent in June. His support was particularly low among foreign institutional investors at 33.6%, with domestic investors voting for 55.3%.

According to Professor Chieko Matsuda, a professor at Tokyo Metropolitan University, there has been a rapid increase in the number of shareholders in recent years who are demanding more stringent standards from board members. Most institutional investors in Japan have already done this, Matsuda said, adding that in the past they may have been more lenient compared to investors abroad, but that is not necessarily the case now.

Sumitomo Mitsui DS Asset Management Co. also opposed the reappointment of Toyoda and Hayakawa. However, they decided not to proceed against Sato due to the short time that had passed since he took over as CEO in April 2023.

Repeated scandals have made Fukoku Capital Management Inc. went from voting in favor of the two directors at last year’s shareholder meeting to being opposed this year because of the “serious impact they have had on society”.

Many shareholders voted to reappoint Toyoda, but some cases stood out for doing so after meeting with the automaker’s management to discuss its response to recent scandals. Nippon Life Insurance Co. she voted for the full board after speaking with Toyota, which confirmed that it had dealt with the scandals, their root causes, and determined who was responsible.

Nikko Asset Management Co. praised Toyota’s plans to reassess and refresh the automaker’s internal corporate culture, voting in favor of the board and its reform promises. Mitsubishi UFJ Trust & Banking Corp. stated that there were “no particular problems” and voted in favor of the entire board.

First publication: September 30, 2024 | 8:14 IST