Toyota investors should vote against Chairman Toyoda, advises Glass Lewis

The proposal against the chairman of Japan’s largest company by market capitalization comes as board independence is being watched more closely by investors.

Toyota will hold its annual general meeting of shareholders on June 14.

Of the 10 appointed Toyota board members, the automaker claims four are independent and the rest are insiders. But Glass Lewis said only three of them are free under its classification, which considers a candidate from Toyota’s main lender, Sumitomo Mitsui Banking Corp, to be an “affiliate.”

Glass Lewis requires at least one third of the board to be independent.

“In our view, the board does not have an adequate number of independent directors, which raises serious doubts about its objectives, independence and ability to exercise appropriate oversight,” Glass Lewis said in its Thursday report.

“In this case, we recommend that shareholders express their displeasure on this matter by voting against the candidate Akio Toyoda, chairman of the board, who we believe should be held responsible for allowing insufficient independent representation,” the report said.

On a shareholder resolution by three European asset managers calling on Toyota to better publicize its climate change efforts, Glass suggested Lewis vote against it.

“The company has demonstrated strong responsiveness to shareholders through its ongoing and systematic disclosure of its commitment to climate-related issues,” said Glass Lewis.