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.

The group’s scandals and corporate governance were the main topics of a question and answer session organized at the meeting, which was attended by 4,656 people. Despite the rainy weather, the number of participants increased by 882 compared to last year, which proves the great interest of shareholders.

Facing questions about his leadership, Toyoda defended his approach, saying he was making sure he left decision-making to the younger generation and that he was only acting in an advisory capacity.

“I will lead reforms as the person responsible for the entire group,” said the grandson of Toyota’s founder.

Ahead of the meeting, U.S. proxy advisory firm Institutional Shareholder Services recommended shareholders oppose the company’s proposal to reappoint Toyoda, saying the long-time chief executive was responsible for recent falsification of safety 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.

Toyoda’s reappointment was widely expected due to his popularity among retail investors and the company’s record profits in the last fiscal year, as well as years of shared ownership with business partners.

At the meeting, Sato promised that the world’s largest car group would improve compliance while apologizing for cases of vehicle testing fraud in Japan.

“We are trying to reform the fundamentals of our corporate culture,” Sato said.

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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