Sources said that Toyota Motor Corp. wants to improve decision-making and to do this, the board will be reduced from having 27 members down to at least 17 members.
This plan was earlier reported by the Tokyo Shimbun. Toyota believes that changes have to be made after the company faced a recall crisis last year resulting to its biggest management reorganization in eight years.
Currently, Toyota's roster of 27 directors includes the chairman, president, six executive vice presidents and 15 senior managing directors.
The sources said that to trim down the board, the number of executive vice presidents will be lessened. The changes are expected to take effect as early as April, before the shareholders' meeting in June.
The sources added that President Akio Toyoda will be announcing this move. It can be recalled that eight years ago. Toyota more than halved the number of board members to 27 from 58 to help hasten decision-making.
Even as the demand for Toyota vehicles has gone up due to the recovering US economy and the growth in emerging markets, the company estimates that it will earn less than a third of the record 1.7 trillion yen ($20.4 billion) posted in the year ended March 2008.
Last month, Toyoda said that Toyota will announce its “2020 vision” in April including a medium-term business-reform plan. Keisuke Kirimoto, a Toyota spokesman, said that there has been no decision made yet with regards to management personnel changes including that of directors.
While Toyota attempts to regain customer trust, it continues to issue recalls for various defects. On Jan. 26, Toyota announced that it will fix 1.7 million vehicles globally because of faults in fuel pipes and pumps, pressure sensors and spare-tire carriers.
Since the fall of 2009, Toyota has recalled over 18 million vehicles worldwide, a majority of which are related to unintended acceleration claims. [via autonews - sub. required]