Toyota has revealed a significant board change to increase the board’s diversity and the robustness of auditing functions. The company disclosed the alterations on Tuesday, which is a step towards improving governance in the background of enhanced focus on internal controls.
Out of the six new appointments, Christopher Reynolds, an executive from Toyota’s North American division, has been named. As a lawyer and the child of a Ford worker, Reynolds has a wealth of experience in human resources and risk management.
The proportion of women on Toyota’s 10-member board will rise from 10 per cent to 20 per cent with the appointment of Kumi Fujisawa, an independent entrepreneur and Hiromi Osada, who use to work at Toyota as an auditor. Furthermore, another member, George Olcott, who is a former auditor, has also been selected to join the board such that the number of outside directors has been raised from four to five.
This is the first time that auditors will be represented on the board. Takanori Azuma, a Toyota Human Resources representative said that the reorganization has been done in order to incorporate various points of view to the company’s management. He called the shift ‘a weapon for survival’ in the face of a rapidly changing automotive industry.
Toyota’s internal controls have been called into question after it accepted to have fabricated certification tests for seven vehicle models in the previous year. It is the board shake-up, the company believes, will assist in restoring confidence and align with international standards.
However, Chairman Akio Toyoda and Chief Executive Koji Sato will keep their positions for the time being. Toyota is still very much a company that is in the process of transforming itself into a “mobility company” to meet changes in the industry and increasing competition from new entities in the market such as Tesla and BYD.
The new board changes will be recommended to be approved at Toyota’s general meeting of shareholders later this year.
