Toyota shareholders reelect CEO Toyoda amid testing scandals

Shareholders of Toyota Motor Corp. approved on Tuesday a proposal to re-elect CEO Akio Toyoda to its board despite investment recommendations calling for a vote against him following a recent series of safety testing scandals at Japan’s leading automaker group.

Nine other board members were also reappointed at the annual shareholder meeting at the company’s headquarters in Aichi Prefecture, including President Koji Sato and Vice President Shigeru Hayakawa.

At the meeting, Sato promised that the world’s largest car group would improve compliance after shareholders accused him of fraud related to vehicle testing in Japan.

“We are trying to reform the foundations of our corporate culture,” the president said.

Ahead of the meeting, U.S. proxy advisory firm Institutional Shareholder Services recommended that shareholders oppose the company’s proposal to reappoint Toyoda, a scion of the founding family, saying he was responsible for recent falsification of security data at group companies.

Another U.S. proxy adviser, Glass Lewis, also recommended rejecting the chairman’s reappointment for the same reason, as did Hayakawa, questioning his performance as chairman of the meeting where decisions on executive nominations are made.

Toyota’s truck-making subsidiary Hino Motors Ltd. pleaded guilty to cheating on its 2022 emissions and fuel economy data, and its small-car unit Daihatsu Motor Co. stated the following year that most of its cars had had safety data manipulated.

In January this year, a subsidiary of Toyota Industries Corp. revealed that engine data had been falsified for years. This month, Toyota said it did not fully comply with government standards for crash and other vehicle tests and also falsified engine power data for seven of its models.

The Ministry of Transport has ordered a shipping ban on three affected models currently on the market.

All affected models were launched while Toyoda was previously president.

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