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Akio Toyoda, grandson of Toyota’s founder, receives shareholder approval to remain in charge

Akio Toyoda, grandson of Toyota’s founder, receives shareholder approval to remain in charge

TOKYO — Toyota shareholders on Tuesday expressed support for all of the company’s proposals, including retaining Akio Toyoda, grandson of the Japanese automaker’s founder, as chairman on the board.

Details about the voting figures were not immediately available. But the company confirmed that the majority voted in favor of its views. A shareholder proposal calling on Toyota to issue an annual report on its climate-related lobbying activities was rejected.

The annual meeting, held at the company’s headquarters in the city of Toyota, central Japan, has drawn attention as Toyota and other major domestic manufacturers have become embroiled in a scandal involving fraudulent vehicle certification tests.

The cheating has not led to any recalls or safety issues. A shareholder proposal calling on Toyota to issue an annual report on its climate-related lobbying activities was rejected.

Still, it’s a great shame for a manufacturer with a reputation for quality, whose production methods are studied around the world. Some individual shareholders asked about the scandal during the meeting.

Toyota, which makes the Prius hybrid, Camry sedan and luxury Lexus models, is sometimes seen as leaving climate change behind.

Under Toyoda it has promoted a ‘multi-pathway’ approach to ecological vehicles, focusing on hybrids, which have both a petrol engine and an electric motor, and using hydrogen as fuel rather than focusing on battery-electric vehicles.

“The group considers climate change action as one of its key management tasks and is fully focused on achieving carbon neutrality by 2050,” Toyota said in explaining its recommendation on the shareholders’ vote.

It highlighted its multi-pathway strategy and argued that it was transparent and forthright about various environmental efforts.

The results were expected because Toyota’s largest shareholders are among Japan’s nearly 1 million companies, such as banks, insurers and financial institutions, which are unlikely to challenge the automaker as they hold about 39% of the total shares.

Other corporate entities represent 25%, foreign corporate entities almost 22% and individual shareholders approximately 14%. Toyota Industries Corp., a group company, is the second shareholder. Parts maker Denso Corp. is the sixth largest shareholder.

Last year, Toyoda won re-election with almost 85% of the vote. That was a decrease compared to 96% in 2022. It is still unclear how much he received this year.

Toyota officials have repeatedly apologized for the fraudulent vehicle tests, and CEO Koji Sato repeated the apology at the shareholder meeting.

Among the proxy groups seeking to vote against Toyoda was Institutional Shareholder Services, majority owned by German capital markets firm Deutsche Borse Group, which advises investors.

ISS said in its proxy report that Toyoda “should be considered ultimately responsible” because its promises for change did not include a board reshuffle, which the company said was necessary to avoid a repeat of faulty testing.

It did not oppose the appointment of other board members, including Sato.

Another major shareholder, proxy advisory firm Glass Lewis & Co., recommended voting against the reappointments of Toyoda and Shigeru Hayakawa, another top executive, citing similar reasons for the flawed testing that he said raised questions about governance and the company’s corporate culture.

Hayakawa oversaw board appointments, and more independent board members should be added, according to San Francisco-based Glass Lewis.

In the fiscal year ended in March, Toyota’s profit doubled from the previous year to 4.9 trillion yen ($31.9 billion), beating its own expectations as car sales rose and a weak Japanese yen boosted foreign earnings . Toyota remains the world’s largest automaker, with sales of 9.4 million vehicles in the fiscal year that ended in March.

Toyota’s stock prices had tripled over the past five years to nearly 3,800 yen ($24) before tumbling amid the latest troubles. The shares now trade at over 3,000 yen ($20).

The improper vehicle checks, including crash tests, came to light last year and were found at Toyota group companies Daihatsu Motor Co., which makes small models, truck maker Hino Motors and Toyota Industries, a maker of forklifts and other machinery.

The violations also occurred at Japanese car manufacturers that are not part of the Toyota group, such as Honda Motor Co., Mazda Motor Corp. and Suzuki Motor Corp.

“The issues we face today, including carbon neutrality, are challenges that everyone on Earth must join forces to tackle together,” Toyoda said ahead of the meeting.

“If we simply don’t know the right answer, let’s start by doing what we think is best.”

Yuri Kageyama is on X: https://twitter.com/yurikageyama