Toyota Shareholders Call for a Vote Against Chairman Amid Testing Scandal
The upcoming annual shareholders meeting on June 18 will see Toyota Chairman Akio Toyoda facing some dissatisfaction from two major proxy groups urging a vote against keeping him on the board. This demand comes after Toyota recently apologized for fraudulent certification tests on vehicles, tarnishing its reputation for quality.
Although the testing scandal did not pose any safety issues and no recalls were made, Toyota halted production of three models produced by group companies in Japan. The company’s stock prices plummeted after the scandal, shedding about $18 billion in market value.
Institutional Shareholder Services, a proxy advisory firm, pointed to Toyoda as ultimately accountable for the scandal. The firm criticized Toyoda’s lack of board reshuffling despite promising change. Another proxy advisory company, Glass Lewis & Co., recommended voting against the reappointment of Toyoda and another top executive, citing failures in maintaining internal controls and governance measures.
The past year has seen several scandals involving improper checks on vehicles at Toyota and other Japanese automakers, although no safety issues were reported. While Toyoda is unlikely to be ousted at the general shareholders’ meeting, pressure is mounting for more accountability and oversight within the company.
Despite these challenges, Toyota remains the world’s leading automaker, with strong sales figures and profits. Industry analysts believe the recent scandal will have a limited impact on the company’s long-term prospects. Toyoda, who previously faced a major recall scandal in the U.S., has reassured the public that Toyota will address any shortcomings and strive for improvement.
