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Toyota Motor Corp. (TM, Financials) is expanding its board to 10 members, adding four new directors as part of a governance restructuring aimed at enhancing oversight and increasing diversity, the company announced.
The action will raise the number of independent outside directors to five, half of the board, and boost the count of female board members from one to two.
Four new board membersChristopher Reynolds, a North American businessman with experience in human resources and risk management; Kumi Fujisawa, an independent entrepreneur; Hiromi Osada, a former Toyota auditor; and George Olcott, who formerly worked in an audit capacity. Reynolds, the son of a former Ford Motor Co. (F, Financials) employee, offers to the board industry experience and regulatory savvy.
The reorganization follows Toyota's admission last year that it had manipulated certification tests for seven different car types. Concerns regarding quality control and governance brought forth by this sparked requests for more robust control and regulatory inquiries. Toyota has promised to boost internal monitoring, increase the accuracy of decision-making, and extend audit capacity and thus bolster its governance system. The corporation said these developments are part of a larger attempt to restore confidence and improve openness after the testing disaster.
Subject to shareholder approval at Toyota's annual meeting in June, the governance changeswhich also seek to give top management additional authorityalso aim to As manufacturers are under more regulatory scrutiny over emissions regulations, safety certifications, and corporate responsibility, the action is regarded as a reaction to investor worries about governance and openness. Toyota said that these developments would enable the business to maintain its global automotive market position while more successfully negotiate industry challenges.
This article first appeared on GuruFocus.