Toyota appoints first-ever external candidate to board

Japanese corporations have long been known to keep things 'in the family', but now Toyota has broken the mould by appointing its first director from outside the company to a seat on the board.

by Michael Northcott
Last Updated: 19 Apr 2016

Mark Hogan, a former top dog at US competitor General Motors is the first outside in Toyota’s 76-year history to be given a seat on the board of directors. He is also a US national, but he is being installed to help make the firm quicker to act on the movements of regional markets.

Toyota has been plagued with vehicle faults that have required the recall of millions of units for repairs over the last couple of years, not to mention an earthquake and tsunami in Japan and serious flooding in Thailand which disrupted supply chains. These problems have, unsurprisingly, knocked the firm off the top spot as the world’s largest car manufacturer. Currently, GM has that mantel. 

Another famous trait of Japanese firms is, if they must have an outsider, the preference is for that person to be Japanese. Again, the mould had barely been broken before Hogan, as he is just the second non-Japanese person to make board level in the company. His predecessor (in the non-Japanese representation stakes) was Jim Press, another ‘merkin, who left Toyota quite soon after joining to work at Chrysler.

Although the firm is still on a stable footing – it forecasts profits of 860bn yen (£5.9bn) for the year to 31 March, up from 780bn – it still has some changes in the pipeline. The president, Akio Toyoda, is setting up a division to look after the firm’s North American, European and Japanese markets, and another for emerging markets such as China, India and South America. Bringing in Hogan is obviously a part of this strategy for applying better concentration to those markets.

Shareholders have still to approve the new appointment, which could potentially be something of a stumbling block, but as long as the board is not as dysfunctionally obsessed with Japanese-only management schemes as some others (click here to read MT's piece interview with the head of IMD on what the future holds for Japanese business), then the appointment should go ahead.

But whether or not the appointment of a single man can restore the carmaker to its former glory is up for debate…

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