After the Japanese car scandal, Akio Toyoda was re-elected as Chairman

Just as he apologized once again on the front foot, Akio Toyoda was re-elected as chairman, solidifying his position at Toyota.

At the annual shareholders' meeting on Tuesday, despite proxy advisors raising questions about corporate governance and scandals, Akio Toyoda and the other 9 board members were all re-elected.

The two leading proxy advisors recommended against supporting Akio Toyoda's re-election, but considering Toyota's internal shareholding, record-breaking performance last year, and Akio Toyoda's high popularity among Japanese retail investors, his re-election was expected.

Analysis suggests that if Akio Toyoda's support rate significantly declines in the announcement on Wednesday, not only will it damage his reputation, but it may also prompt the company to further advance governance reforms, with the possibility of accelerating the removal of cross-shareholdings within the group as one of the reform measures.

Akio Toyoda's support rate dropped from 96% in 2022 to 85% last year, after which Toyota faced a series of scandals involving subsidiaries and the parent company.

The main opposition to Akio Toyoda comes from overseas investors holding a quarter of Toyota's shares.

Proxy advisory firm ISS (Institutional Shareholder Services) objected to Toyota's handling of the falsification issue, with the New York City Employee Retirement System also agreeing with this view and voting against it at the shareholders' meeting.

Another proxy advisory firm, Glass Lewis, for the second consecutive year, recommended against Akio Toyoda's re-election, citing concerns about his lack of independence in dealing with the board, strategic equity investment issues, and low equity returns.

However, as the grandson of Toyota's founder Kiichiro Toyoda, Akio Toyoda remains popular among the 12.6% of retail investors in Toyota, and his record-breaking profits and strong stock performance last year also add weight to his re-election.

Since the proxy advisory firms made their recommendations, Toyota has been involved in new certification test violations.

In early June, Toyota admitted to misconduct in certification tests for 6 different vehicle models, including 3 models that were still on sale at the time.

Since the falsification scandal emerged, Toyota's stock price has fallen by 10%, but it has still risen by 15% year-to-date.