Toyota’s proposal to re-elect Chairman Akio Toyoda to its board of directors is coming under pressure from two leading proxy advisory firms, which are urging shareholders of the world’s largest automaker to vote against the founding family scion.
Institutional Shareholder Services, which advises major investors, recommended Tuesday withholding support for Toyoda, citing improper vehicle testing by subsidiary Daihatsu and regulatory violations by Toyota group affiliates Hino and Toyota Industries.
“Given the current situation where a spate of certification irregularities have occurred within the Toyota Motor group, shareholders are advised to vote against chairman Akio Toyoda,” ISS said in a report.
Proxy advisor Glass Lewis also recommends voting no for the chairman for the second year in a row, citing, among other things, what he believes is his responsibility for an insufficiently independent board. It also urged shareholders not to support the proposed re-election of Shigeru Hayakawa, Toyota’s vice chairman.
Toyoda has long been the face of the company, which he led from 2009 to 2023, when he handed over the role of CEO to Koji Sato. The current chairman is the grandson of founder Kiichiro Toyoda and son of former chairman and president Shoichiro Toyoda. In recent years, Toyoda has been criticized for championing the Japanese automaker’s “multi-pathway” approach to vehicle electrification, which is less aggressive than many of its global peers.
The recommendations come ahead of Toyota’s annual shareholder meeting scheduled for June 18 at its headquarters in Toyota city, Aichi prefecture. Last year, Toyoda won re-election with 85% of the vote, down from 96% in 2022 and the lowest since at least 2010.
Shareholder meetings of companies in Japan have long been pro forma affairs, with company-backed directors more often than not securing a solid majority.
