TOKYO, April 26 (Reuters) - A group of investors in Japanese luxury toilet maker Lixil Group 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.
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.
“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.
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. (Reporting by Junko Fujita; Editing by David Dolan and Elaine Hardcastle)