Toyota Motor Corp. will cut the number of paid advisory positions given to top executives after retirement to nine from 61, following demands for greater transparency in the governance system, the Nikkei Asian Review reported June 15.
Former presidents Hiroshi Okuda and Katsuaki Watanabe will step down as advisers, but former president Shoichiro Toyoda will remain as the company's emeritus chairman, according to the report. Shoichiro Toyoda is the son of Toyota founder Kiichiro Toyoda and the father of current CEO Akio Toyoda.
Former president Fujio Cho and former vice chairman Kosuke Ikebuchi will also keep their advisory roles, the report said. The remaining six advisers will reportedly be from outside groups.
The change comes after a Toyota committee largely composed of external directors adopted stricter scrutiny over advisers' roles and reset existing adviser contracts last autumn, the news outlet said. The company reportedly said it would "greatly" slash those roles and appoint consultants from external groups, such as from government councils or industry bodies, on a one-year basis.
According to the report, Toyota executives who retire as a vice president or higher generally serve as an adviser for four years, while lower-ranking executives serve for one to two years. The Nikkei said the practice has been criticized by investors and U.S. proxy voting companies after it was revealed that former Toshiba Corp. presidents seemed to be interfering with the management of the company.
The Tokyo stock exchange in January told listed companies to disclose details regarding this practice in obligatory reports on corporate governance, the report added.
Consumer electronics giant Panasonic Corp. had vowed to do away with its advisory positions from April 1, while Mitsubishi Corp. has reportedly said it will take away the special consultant role for former presidents.
Toyota did not immediately respond to requests for comment.