Toyota governance fight gets stuck in traffic
The author is a Reuters Breakingviews columnist. The opinions expressed are their own. Refiles to fix story code.
MELBOURNE, May 30 (Reuters Breakingviews) -Governance campaigns against Japanese companies have a hard enough time gaining traction as it is. ValueAct Capital’s two-year campaign against Seven & i 3382.T culminated last week with at best just a third of shareholders backing its four board candidates. Now proxy advisory firms are targeting Toyota’s 7203.T board. But they are hamstrung by their own differing recommendations for the $232 billion carmaker’s shareholders.
ISS reckons three candidates up for re-election aren’t independent directors due to the links their organisations have with Toyota; Masahiko Oshima, for example, is an executive at its top lender, Sumitomo Mitsui Financial 8316.T. Glass Lewis asserts just three of Toyota’s 10 board candidates are unaffiliated, fewer than the one-third the advisory sets as a floor. Toyota insists its board meets the Tokyo Stock Exchange’s independence standards.
Yet ISS recommends backing the candidates anyway as a vote against them risks “increasing management dominance of the board”. Glass Lewis suggests investors blame Chair Akio Toyoda. He should go in any event: having the former CEO of 14 years lead the board is bad governance. The duo also disagree on a shareholder resolution pushing for an annual report on climate lobbying. The proxy advisories’ independence of thought is laudable. It’s also likely to split the vote and hand Toyota an easy victory. (By Antony Currie)
Follow @Breakingviews on Twitter
Capital Calls - More concise insights on global finance:
Saudi is a BRIC in crumbling East-West money wall nL1N37Q0CN
Aussie billionaires’ solar spat enters new phase nL1N37Q02U
Lufthansa sale is ironic end to Italy airline saga nL4N37N2G0
BYD and Great Wall feud portends potholes ahead nL4N37M2JB
Using frozen Russian money for Kyiv is barmy nL4N37M2GA
Editing by Una Galani and Thomas Shum
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.