Toyota’s proposal to re-elect Chairman Akio Toyoda to its board is coming under pressure by two leading proxy advisory firms, which urged shareholders of the world’s largest carmaker to vote against the founding family scion.
Institutional Shareholder Services, which advises large investors, recommended on Tuesday withholding support for Toyoda, citing improper vehicle testing by subsidiary Daihatsu and regulatory violations by Toyota group affiliates Hino and Toyota Industries.
"In consideration of the current situation where a spate of certification irregularities occurred in the Toyota Motor group, shareholders are advised to vote against Chairman Akio Toyoda," ISS said in a report.
Proxy adviser Glass Lewis also recommend a no vote for the chairman for a second year in a row, citing what it said was his responsibility for an insufficiently independent board, among other issues. It also urged shareholders to withhold support for 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 until 2023, when he ceded the chief executive officer role to Koji Sato. The current chair is the grandson of company founder Kiichiro Toyoda and son of former chairman and president Shoichiro Toyoda. In recent years, Toyoda has faced criticism 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 shareholders meeting scheduled for June 18 at its headquarters in the city of Toyota in 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.
Corporate shareholder meetings in Japan have long been pro forma affairs, with company-backed directors winning solid majorities more often than not.