• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

A Corporate Governance Review of Toyota

Extracts from this document...

Introduction

FSM - Finance & Strategic Management CORPORATE GOVERNANCE AND FINANCE A Corporate Governance Review of Toyota Author of paper: Simon Hansen Toyota Motor Corporation Toyota Motor Corporation, which is a part of the Toyota Group, is the largest world-wide automobile maker1. Since its first model, Toyota AA created in the late 30's, the corporation has grown to include the brands of Toyota, Scion, Lexus, Daihatsu and Hino Motors. The corporation employs more than 71,000. Besides cars Toyota Motor Corporation also offers financial services, robotics and biotechnology through several subsidiaries. The performance of Toyota Motor Corporation Toyota is definitely feeling the global financial crisis, combined with the recall of several millions cars, sales in 2010 has been falling. The latest financial result shows that sales is down with nearly 28 % since 2008 from 26.3 million yen to 18.9 million yen. 2008 was a good year for Toyota, despite the beginning of the financial crisis. Furthermore the gross profit margin is lower in 2010 compared to 2008, 22 % to 16 % in 2010. The lower revenue has naturally affected net income for the Toyota corporation, which has fallen 88 % in the same period from 1.7 million to 0.2 million yen2. The 2009 showed for the first time in 59 years red numbers on the bottom of the financial sheets. ...read more.

Middle

This is important to owners, as they want to know exactly how the company is performing. In the worst case, a bad performing management could try to hide poor performance in the financial statement. Toyota has established a board of corporate auditors, to ensure audit plans, methods and results are optimal. The board consists of 7 persons, of these 4 are external auditors with no direct relation to the Toyota group or any of its subsidiaries. The establishment of a internal board of auditors is without a doubt a good decision in accordance to corporate governance. The board is supposed to be supported by a department, but this department has not been established so far. To have full usage of the board of auditors, this department should be established on order to support them with the necessary informations. Internal guidelines for corporate governance With the release of the latest corporate governance report it shows that Toyota has established a set of guidelines. These are created to ensure that employees (directors, senior-managers and such) execute their responsibilities in compliance with relevant laws and regulations. Furthermore to ensure that they exercise their duties efficiently, by following policies, procedures and plans11. Identity of owners The owner of Toyota Motor Corporation, The Toyota group, is the single largest company in Japan and is the biggest of the vertically-integrated Keiretsu groups12. ...read more.

Conclusion

The board of directors has been cut in size, a board of auditors has been established, management incentives has been adopted, a corporate governance has been implemented and finally the release of the corporate governance report. All of these rather newly established activities shows that Toyota is moving in the right direction. However there is room for improvements to be made, in order to secure a better level of corporate governance. This includes the establishment of a fulltime department to support the board of auditors, the introduction of outside directors to the board of directors and perhaps even a second level of management. 1 Washington Post, "Toyota Passes General Motors As World's Largest Carmaker", January 2009. 2 BusinessWeek, "Toyota Motor Company". 3 USA Today, "Toyota talking to Japan about $2B loan, reports say", March 2009. 4 Yahoo Finance, "TMC". 5 Toyota.com, Corporate Governance Report 2010. 6 Toyota.com, Corporate Governance Report 2010. 7 Thomsen, An Introduction to Corporate Governance, 2008. 8 Toyota.com, Corporate Governance Report 2010, page 2. 9 B�rsen, "Tredje generation slipper speederen", March 2010. 10 Thomsen, An Introduction to Corporate Governance, 2008. 11 Toyota.com, Corporate Governance Report 2010. 12 San Jos� State University, The Toyota Group - The One and Only Horizontal-Vertical Keiretsu. 13 Toyota.com, Corporate Governance Report 2010. 14 Toyota.com, Press Room. 15 Yahoo Finance, TMC. 16 Businessweek, Toyota Buys Tesla Stake for Electric Car Tie-Up. ?? ?? ?? ?? A Corporate Governance Review of Toyota Mads Jensen | 110285-2547 | Copenhagen Business School [2] ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our International Baccalaureate Business Studies section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related International Baccalaureate Business Studies essays

  1. Project Management - planning an all inclusive carnival concert in the North Western end ...

    Appendix C PROJECT CHARTER TOPIC DESCRIPTION SCOPE SECTION Project Name Soca In D Sun (All inclusive concert) Business Case The main objective of this project is to host an all inclusive carnival concert. The organisation will gain profit and recognition from the general public and members of staff and it will have to meet the standards of the client.

  2. This paper will concentrate on Apples Apple TV business, and its complementing iTunes business.

    This was very evident during a recent apple event where speculators were expecting a new improved version of Apple TV that included DVR capability and a Blue-ray player. However, the speculations were false. Conclusions The Apple brand wins half the battle in marketing Apple TV and iTunes.

  1. Business management

    3-Summary of the personal interview6: - This discussion with the owner has allowed me to gather necessary information needed for the research. The owner is aware of the high profits earned with the business and also about the demand of customers of opening a new outlet in different areas.

  2. BP Financial analysis

    Other Businesses and Corporate Segment (inc Alternative energy) For fiscal year 2009, the other businesses and corporate division accounted for revenue of USD$ 2,843 million, representing a decrease of 38.65% over revenue in 2008. The company's capital expenditure totalled USD$ 1,299 million, as compared to USD$ 1,839 million in 2008.

  1. Marketing. In my project, I am going to be looking at how Nestls Smarties ...

    Target market Knowing your target market is essential information if you want to market your product well. When you know your target market you can market your product around them and it will reach them more effectively. The target market can be broken down into different sections and tells you about the majority of the consumers.

  2. Orgnizationl, Theory, Change & Culture

    Dow Corning's managers postponed action and, to safeguard the profits of their company, did not confront the fact that their product was defective and dangerous. As a result, women continued to receive silicon breast implants, and the potential for harm increased.

  1. MG 309 Strategic Management

    To help understand the issue in a more realistic level, our research at Connect Fiji was conducted to help us analyzing the strategies used, how it provides for its customers and ways of implementing further improvements in their organization. With the use of interview, questionnaires and observation, we were able

  2. Ford Company Analysis - corporate structure and financial analysis

    policies and practices that relate to the sustainable growth of the company on a world-wide basis. It should also perform functions and exercises such as other powers that can be delegated to it from time to time by the Board of Directors 1.7 Corporate Governance Principles 1.7.1 Main idea The

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work