ISS reverses stance and backs Toyota chief's reappointment
"There are no particular concerns about the nominee,' Institutional Shareholder Services said in a report Thursday. The world's No. 1 carmaker will hold its annual meeting June 12.
ISS, Glass Lewis and other proxy advisory firms can influence voting at shareholder meetings by providing an analysis for why stakeholders should support or reject proposals on directors and other matters. Last year, ISS and Glass Lewis recommended against Toyoda's re-election, citing concerns over governance and his handling of a series of vehicle safety scandals, as well as Toyota's commitment to reducing its impact on climate change.
Representatives for Toyota didn't immediately respond to a request for comment.
Shareholder support for Toyoda, whose grandfather founded the company, has been slipping in recent years. More than a quarter of votes cast at last year's annual meeting opposed his reappointment. His share of affirmative votes dropped to 72%, from 85% and 96% in the prior two years.
Toyoda has said that his seat on the board could be at risk if shareholder support continues to decline. "No board member in Toyota's history has seen their support fall so low,' he said in a podcast interview with Toyota Times, the company's media outlet, in July 2024.
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.
Last year's regulatory scandals caused Toyoda's opposition to spread among big shareholders, including Nissay Asset Management and Mitsubishi UFJ Asset Management.
The scandals began with government probes that uncovered falsified vehicle safety certifications in December 2023 at a pair of subsidiaries — Daihatsu Motor and Toyota Industries — then a few months later at the carmaker itself.
This year, the focus could fall on Toyoda's ¥6 trillion ($41.7 billion) plan to buy out Toyota Industries, and whether the take-private deal by the founding family will help or hurt the carmaker's push to improve corporate governance.
Toyoda owns less than 1% of Toyota Motor, while Toyota Industries — a major forklift manufacturer and producer of car parts and textile machinery — has a 9.1% stake in the carmaker. Much depends on how these holdings are rationalized if and when the deal proceeds.
Voting at shareholder meetings in Japan are becoming more consequential, as the government urges businesses to unwind ownership of stock in each other. That's triggered a broader dissolution of cross-held shares among the country's biggest companies, those including between Toyota and its suppliers, affiliates and banks.
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