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At the Toyota shareholder meeting, focus on the chairman's support level


Toyota shareholder meeting focus on chairman

If shareholder support for Chairman Akio Toyoda declines significantly, it may lead to more action on governance reforms.

The AGM this year will be held after controversies about certification test issues at Toyota and its group companies, like the truck division Hino Motors and compact car manufacturer Daihatsu. Proxy consulting firms ISS and Glass Lewis have recommended against the re-election of Toyoda due to concerns about governance and board independence. Since then, other information regarding testing infractions has also surfaced.

Despite the scandals, the business has remained strong, yet Toyoda's approval rating dropped to 85% last year from 96% in 2022. However, he only requires a majority to be re-elected.

Toyoda, the founder's grandson, has been a committed member of the board since joining the company in 2000. It is anticipated that he will receive overwhelming support from individual investors, numerous suppliers, and the Toyota Group firms. James Hong, a respected researcher at Macquarie, confidently stated that Akio Toyoda will definitely be reappointed. He further clarified that any decline in the approval rate would undeniably capture the attention of the management.

Hong mentioned that Toyota could increase its efforts to reduce cross-shareholdings, particularly in non-automotive sectors such as financial firms or telecom giant KDDI, in response to governance-related complaints. The approval percentage will not be made public until Wednesday, although the vote's result will be declared on Tuesday.

The International Standards Society (ISS) has strongly criticized the automaker's handling of certification irregularities within the Toyota group. They firmly believe that Toyoda should bear the ultimate responsibility for these errors.

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