Glass Lewis recommends traders vote towards Toyota chairman

By Makiko Yamazaki and Daniel Leussink

TOKYO (Reuters) -Proxy adviser Glass Lewis has really useful that shareholders of Toyota Motor (NYSE:) Corp vote towards the re-election of Chairman Akio Toyoda as a board director at an upcoming assembly, citing his duty for the shortage of a sufficiently impartial board.

Glass Lewis made the advice towards the chairman of Japan’s largest firm by market capitalisation at a time when board independence has been underneath better scrutiny from traders.

The U.S.-based proxy adviser mentioned solely three of Toyota’s 10 board nominees are deemed impartial based on its classification, wanting the proxy adviser’s requirement that at the least one-third of administrators be impartial.

Toyota, however, regards 4 of its nominees as impartial, together with the deputy chair of Toyota’s principal lender, Sumitomo Mitsui (NYSE:) Banking Corp (SMBC), whom Glass Lewis considers “affiliated”.

Glass Lewis’ requirement is in step with Japan’s company governance code, which requires one-third board independence at companies listed within the Tokyo market’s principal part.

“In our view, the board doesn’t have a enough variety of impartial administrators, which raises critical issues about its objectivity, independence and skill to carry out correct oversight,” Glass Lewis mentioned in a report dated Might 25.

“On this case, we suggest that shareholders voice their issues about this problem by voting towards nominee Akio Toyoda, chair of the board, who we consider needs to be held accountable for permitting inadequate impartial illustration,” it mentioned.

Toyota disputed Glass Lewis’ report. Though SMBC is a enterprise associate, the scale of transactions with the financial institution is just not materials and the appointment of its government “will not battle with the pursuits of common shareholders”, it mentioned.

Glass Lewis additionally really useful traders vote towards the election of some statutory auditor nominees on the annual assembly on June 14, due additionally to inadequate independence.

The proxy adviser didn’t again a shareholder decision by a trio of European asset managers urging Toyota to enhance disclosure of its lobbying on local weather change. The corporate has already proven “important responsiveness” to shareholders, it mentioned.