An independent proxy advisory services company, Glass Lewis, has suggested that Toyota shareholders vote against the re-election of chairman Akio Toyoda as a board director due to concerns that the car manufacturer does not have a sufficiently independent board.
Glass Lewis asserts that just three of Toyota’s 10 current board nominees could be considered as independent. This is short of its recommendation that at least one-third of directors be independent. Japan’s corporate governance code also calls for one-third board independence at companies listed in the country.
Toyota believes that four of its nominees are independent, including the deputy chair of Sumitomo Mitsui Banking, Toyota’s main lender. Glass Lewis refutes this and classifies him as “affiliated.”
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“In our view, the board does not have a sufficient number of independent directors, which raises serious concerns about its objectivity, independence and ability to perform proper oversight,” Glass Lewis said in a recent report. “In this case, we recommend that shareholders voice their concerns about this issue by voting against nominee Akio Toyoda, chair of the board, who we believe should be held accountable for allowing insufficient independent representation.”
The company has also suggested that Toyota shareholders vote against the election of some statutory auditor nominees at the annual meeting scheduled for June 14.
Reuters notes that Toyota has hit back at Glass Lewis’ assertions, stating that Sumitomo Mitsui Banking’s transactions with at are not material and that the potential appointment of its executive “won’t conflict with the interest of general shareholders.”
Earlier this month, three European funds that collectively own $400 million worth of Toyota shares urged the carmaker to improve its disclosure of its lobbying on climate change. These funds, AkademikerPension, Storebrand Asset Management, and APG Asset Management, say that Toyota should commit to an in-depth annual review of its climate-related lobbying, including whether it aligns with the goals of the Paris Agreement.
