"Is Toyota ok?": Toyota faces tough questions

Toyota is in the investor cross-hairs

A string of controversies across Toyota's sprawling automotive businesses have led to the Japanese giant facing tough questions from its investors, with one posing the question "is Toyota ok?".

The showdown occurred on June 18 at Toyota's Japanese HQ, where some shareholders questioned the company's heavyweights about a growing list of scandals that have occurred, and even suggested Chairman Akio Toyoda had taken his eye off the corporate ball through his personal focus on motorsports.

Since January the company has faced a series of controversies, which saw the suspension of deliveries of the Toyota HiLux, Toyota Fortuner, Toyota LandCruiser and Lexus LX after "certification irregularities" were uncovered at its engine supply plant.

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Worse issues were discovered at Toyota Group brand Daihatsu, where the company was found to have manipulated safety tests across 64 nameplates.

Issues also arose at another Toyota Group Brand, Hino, where accusations of falsified emissions data for some 600,000 vehicles arose.

“We recognise the gravity of the fact that the repeated certification irregularities at Toyota Industries Corp, following those at Daihatsu, have shaken the very foundations of the company as an automobile manufacturer,” Toyota said at the time.

The issues have seen a push back from some shareholders against new CEO Koji Sato and Chairman Akio Toyoda, with American industry bible Automotive News reporting that shareholders were asking "is the internal control and government not functioning?” and asking "is Toyota ok?"

Automotive News reports that Toyota also faced backlash in the USA, where two sizeable pension funds – The California Public Employees’ Retirement System and the Office of the New York City Comptroller –voted against the reappointment of Toyoda as the company chairman.

“Our vote against Mr. Toyoda was driven by a pattern of safety and compliance concerns. Setting a tone at the top is critical,” said Michael Garland, the New York Assistant Comptroller for Corporate Governance.

“As investors, we see a lack of independent board oversight as a major governance issue, particularly as the company works to change its culture in response to mounting safety and regulatory violations.”

Despite the pushback, each of Toyota's board members gained support for their appointments.