Shareholders of major housing equipment-maker Lixil Group backed on Tuesday a slate of board candidates supported by the company’s ousted chief executive, a move that is likely to be seen as a victory for corporate governance in Japan.
Shareholders at the toilet-maker’s annual general meeting endorsed all eight candidates who had been backed by former Chief Executive Kinya Seto, including Seto himself, a Lixil spokeswoman said. Seto’s ouster as chief executive last year sparked a governance crisis at the company.
Six of the eight candidates proposed by management were elected to the board, the spokeswoman said. Shareholders had earlier said that Seto had been re-elected. Two of the successful candidates were supported by both Seto and management.
Lixil emerged as a test case for the nation’s governance reform after four investment firms in March called for Chief Executive Yoichiro Ushioda to leave the company’s board along with the Hirokazu Yamanashi, chief operating officer.
The investors cited what they said was a lack of governance after Seto abruptly resigned in October and was replaced by Ushioda, who hails from one of the company’s founding families.
In an attempt to improve Lixil’s governance, Seto had submitted shareholder proposals on a slate of new board members to be voted at the shareholders meeting.
Foreign institutional investors had criticized Seto’s ouster as president and CEO, and demanded that Lixil dismiss Ushioda, saying the procedures related to the dismissal showed that the firm’s governance system is not functioning.
Lixil incurred a group net loss of ¥52.1 billion in the year to March due to poor performance at an Italian subsidiary.
This year, Lixil expects to return to the black with a net profit of ¥15 billion. It plans to eke out a profit by selling a domestic building materials unit.