Lixil shareholders still concerned about governance after board departures
26/04/2019 12:16
TOKYO, April 26 (Reuters) - A group of investors in Japanese
luxury toilet maker Lixil Group 5938.T said on Friday the
resignation of two board members, including the chief executive,
had not removed their concerns about corporate governance at the
company.
The boardroom battle at Lixil, which also owns the American
Standard and Grohe brands, has emerged as a test case for
whether minority shareholders can improve corporate governance.
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The Lixil investors - Marathon Asset Management, Indus
Capital Partners and two other firms - last month called for an
extraordinary shareholders' meeting to have the chief executive
and chief operating officer dismissed from the board.
The company said last week that CEO Yoichiro Ushioda and COO
Hirokazu Yamanashi would both resign from the board. Ushioda has
also said he would resign as CEO. urn:newsml:reuters.com:*:nL3N2202UL
"Whilst this outcome marks a starting point to address
corporate governance concerns, it does not fully resolve the
core reason for holding the extraordinary general meeting, which
is to ensure Lixil acknowledges that due to poor governance
further change is now needed," the investor group said in a
statement.
The investors said they wanted Lixil to put in place a new
management team and were considering whether there was still a
need for an extraordinary meeting.
The drama at Lixil stems from the abrupt resignation of its
former CEO in October last year, and his replacement by Ushioda,
who hails from one of the company's founding families.
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No one was immediately available for comment at Lixil. The
company has previously said it has been and will try to
strengthen its governance.
Activist investors have gained some traction in recent
years, as Prime Minister Shinzo Abe has advocated strengthening
corporate governance. Still, many companies ignore the demands
of minority investors. urn:newsml:reuters.com:*:nL3N21K0KT
(Reporting by Junko Fujita; Editing by David Dolan and Elaine
Hardcastle)
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