By Chieko Tsuneoka

TOKYO--More than a quarter of Toyota Motor's shareholders opposed the reappointment of Chairman Akio Toyoda to the board, according to results released Wednesday, suggesting some dissatisfaction with the company's corporate governance.

Toyoda was re-elected to the board with 71.93% support, and the results don't signify any immediate change in the company's strategy or leadership. Nonetheless, support declined significantly from 84.57% in 2023 and 95.58% in 2022.

Proxy advisers Institutional Shareholder Services and Glass Lewis had called on investors to reject Toyoda. Among other factors, they cited recent cases in which Toyota and group companies acknowledged they didn't follow correct procedures in obtaining Japanese government certification for some vehicle models.

Glass Lewis said Toyoda was responsible "for failing to ensure that the group maintained appropriate internal controls." It also faulted the chairman for not putting enough independent directors on Toyota's board. ISS said the company should "establish appropriate compliance mechanisms under the board's leadership."

At Toyota's annual shareholder meeting Tuesday, a shareholder asked about corporate governance. Toyoda, the grandson of the automaker's founder who served as president from 2009 to 2023 before becoming chairman, rejected suggestions that he was controlling the actions of company executives.

He said they had the freedom to set Toyota's direction with his advice. "I believe that the person responsible for Toyota and the Toyota group is still myself," he said.

Koji Sato, the automaker's chief executive, said: "The chairman is taking the lead to reform the deep-rooted culture" of the company.

Neither Toyoda nor Sato directly addressed the proxy advisers' recommendations or the ratio of independent directors on the board.

The company classifies four of the 10 directors on the board as independent. Three of the six members of Toyota's audit and supervisory board, a separate body, are classified as independent.

Separately, shareholders for the second straight year rejected a proposal from European shareholders calling for greater disclosure about Toyota's lobbying on climate issues. Only 9.17% of shareholders backed the proposal.

Write to Chieko Tsuneoka at

(END) Dow Jones Newswires

06-19-24 0237ET