• 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...


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.


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.


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 ...

    Ticket prices should be within a reasonable price range. Toilet and parking facilities should be clean and safe. Stakeholders The client of Best Show's, Best Show's Ltd, Project Manager, General Public, Employees, Live performers and entertainment and caterers. Summary Scope Statement The main objective of this project is to gain

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

    It needs to expand its marketing in the web 2.0 space, especially in social networks. A large percent of their millions of customers are on social networks. They need to develop social network applications that boost their presence and form a community.

  1. In this paper, we will focus in four main factors which had the most ...

    However, the volatility of the economic and turbulent financial markets are factors that the property market can't bystander. Many loan contracts on the peak, high adjusting interest, real estate prices plummeted, can create a wave of concern that the prolonged downturn.

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

    Their attitude towards sweets is positive and they are not worried by the products affect on their health. It is well known that children eat sweets, they are loved so much by children that parents see them as a way to make them behave by bribing them with it.

  1. BP Financial analysis

    The revenue decreased due to the declining demand for refining products in 2009. Furthermore, several new refineries came on stream in 2009, which impacted the price. The company's capital expenditure totalled USD$ 4,114 million, showing a decrease of 37.99% over that in 2008.

  2. MG 309 Strategic Management

    * Advantages of using business level strategy in the organization. * What is value creation? * Factors that contribute to customer satisfaction * How to create value to customers in Connect Fiji?

  1. Business management

    They are planning to open a branch in Chembur. The cost of land in Chembur is not as high compared to the Tardeo rates. Chembur has a lot of Gujuratis and the areas near Chembur are Ghatkopar and Mulund where there are a lot of Gujuratis and Punjabis staying.

  2. Ford Company Analysis - corporate structure and financial analysis

    statement 1.3 Charter of the Compensation Committee The Compensation Committee shall: 1. Assist the Board of Directors in discharging its responsibility to the shareholders with respect to the company's compensation programs, compensation of the company's executives and identify qualified persons to become company officers 1.

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