Toyota Motor Corporation President Akio Toyoda speaks during a press conference over rigging safety tests by its affiliate Daihatsu that affected 88,000 vehicles, in Bangkok, Thailand, May 8, 2023. REUTERS/Athit Perawongmetha/File Photo
By Makiko Yamazaki and Daniel Leussink
TOKYO (Reuters) – Proxy adviser Glass Lewis has recommended that shareholders of Toyota Motor (NYSE:TM) Corp vote against the re-election of Chairman Akio Toyoda as a board director at an upcoming meeting, citing his responsibility for the lack of a sufficiently independent board.
The recommendation against the chairman of Japan’s largest company by market capitalisation comes as board independence has been under greater scrutiny from investors.
Toyota will hold its annual general shareholders meeting on June 14.
Of Toyota’s 10 board director nominees, the carmaker claims four are independent and the rest insiders. But Glass Lewis said only three of them are independent according to its classification, which regards a nominee from Toyota’s main lender, Sumitomo Mitsui (NYSE:SMFG) Banking Corp, as “affiliated.”
Glass Lewis calls for at least a third of the board to be independent.
“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 its report, dated Thursday.
“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,” it said.
On a shareholder resolution by a trio of European asset managers urging Toyota to improve disclosure of its lobbying on climate change, Glass Lewis recommended a vote against.
“The company has shown significant responsiveness to shareholders through its existing and planned disclosure concerning how it is engaging on climate policy-related matters,” Glass Lewis said.