“If we continue like this, I won’t be able to be a director next year.” Toyota is the most powerful brand in the world, but its boss is on the ropes

He Toyota President Akio Toyoda could not be re-elected as chairman of the carmaker’s board if shareholder support for him continues to fall at the rate it has this year, according to an interview published on Monday. “If we continue like this, I won’t be able to be a director next year,” he claimed In Toyoda.

Before Toyota’s general shareholders meeting on June 18, two prominent proxy groups recommended voting against Toyoda’s re-election as chairman of the board of directors. And it worked, as he only managed to get the support of 72% of shareholders, the lowest support in the brand’s history, while in 2023 it was 85%. Why don’t shareholders want Toyoda at the head of the company? man who led her to be number one in the world?

The image is everything, or almost

The revolt against Toyoda, who led the company as CEO from 2009 to 2023 before handing over the helm to Koji Sato and stepping back from his management duties, cannot be explained without the will of certain shareholders – hidden behind the legal figure of the proxies – of take control of the companyin the hands of the founding family since its inception.

One of them, the consulting firm Glass Lewis, criticized Toyoda for overseeing a board of directors that it described as insufficiently independent. That is, although the Toyodas own less than 1% of the company, their weight in the company and its governing body is such that it is as if they owned more than 50%.

Glass Lewis called only three of the 10 members of the new board truly independent. Toyota says four are. Opinions differ on Masahiko Oshima, a former vice president of Sumitomo Mitsui Banking, which Glass Lewis says is one of Toyota’s most frequently used lenders.

The reasons that shareholders use against Toyoda have enough weight in Japan to be heard, at least among institutional investors. Thus, the fraud in the safety approvals of Daihatsu and some of its engines Daihatsu, Toyota y Lexusrecently discovered and which occurred when Toyoda was CEO of the company.

“Given the current situation where a number of irregularities have occurred in the certification of the Toyota Motor Group, shareholders are advised to vote against President Akio Toyoda,” Institutional Shareholder Services, another proxy group, said in its position paper for the June meeting. “Fundamentally, corporate culture is created from the top down, not the other way around. When changes are not made at the management level, it seems questionable whether the company’s approach is effective.”

Keeping at the head of the company, even in a more political than operational position, the person under whose command several very serious frauds were committed is not ideal in terms of corporate image. And even more so when it is a A person who does not display the usual reserve expected of a CEOand even more so from a Japanese CEO.

Some shareholders, for example, they reproached that the racing activities of the group’s brands were his personal hobby. Not to mention his quarrels with Tesla and his criticism of all-electric cars.

However, they should also not forget that it was under Toyoda’s leadership that Toyota has been one of the world’s top two manufacturers since 2008, alternating the top spot with the Volkswagen Group ever since. In 2023, it has been the Number one for the fourth consecutive year ahead of the German group, with more than 11 million cars sold worldwide.