Maki Shiraki and Daniel Leussink
TOYOTA CITY, Japan (Reuters) – Toyota Motor shareholders on Tuesday backed Chairman Akio Toyoda and the automaker’s nine other board members despite concerns about governance raised by two leading trusted advisers.
Toyoda’s re-election as chairman was the central theme of the annual shareholders meeting after trusted advisers recommended investors vote against the decision.
Shareholders also rejected an investor proposal calling for greater disclosure of climate lobbying, which was opposed Toyota (New York Stock Exchange:). The results of both votes will not be published until Wednesday.
The grandson of company founder Toyoda remains very popular among retail shareholders. He was praised for helping the company to another year of record profits and strong stock performance last year.
“I bought Toyota shares with my pension bonus,” Hidenori Takahashi, 84, told Reuters before the meeting, adding that he believed it was “the best company in Japan” for shareholders.
He said the automaker’s ongoing certification problems were a “bad thing” but Toyoda appeared committed to taking action to prevent a recurrence.
Although Toyoda faced little risk of not being re-elected, a sharp drop in his ratings could be an embarrassment for a company that had been the world’s top-selling automaker for four years in a row.
Toyoda’s approval rating fell to 85% last year from 96% in 2022.
The automaker has been baffled by a wave of safety violations and other certification testing violations at Toyota and its group companies, including small car maker Daihatsu. Institutional Shareholder Services (ISS) took issue with the automaker’s handling of the issue.
Glass Lewis, who recommended against Toyoda’s re-election for a second year in a row, said he was responsible for the board’s lack of independence and also raised concerns about strategic shareholdings and return on equity.
After trusted advisors made their recommendations, more certification violations came to light.
In early June, Toyota said it had erroneously conducted six different vehicle certification tests in the past, including on three models that were still on sale.
The company said its wrongdoing included conducting some tests under stricter conditions than those set by the government, invalidating their results.
Toyota previously told Reuters that self-reflection has long been ingrained in its corporate culture and Toyoda will take a leading role in reviving that culture and working with group companies to ensure good governance.
Toyota shares have fallen 10% since the new revelations, but are still up 18% for the year.