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Corporate Governance

Basic Policy

The Toyobo Group, to respond to the changing times and enhance sustainable corporate value, has established the policies of (1) ensuring timeliness and accuracy in decisionmaking, (2) ensuring transparency in management, and (3) emphasizing fairness. Based on these principles, we are working to strengthen governance structure, as well as bolster risk management and compliance structures.

Toyobo's Governance Structure

Toyobo, as a “Company with Auditors” as defined by the Companies Act, appoints two outside directors to its ten member Board of Directors, and has adopted the Executive Officer System to clearly separate decision-making and oversight function from business execution. Decision-making and oversight are conducted by the Board of Directors. The term of office for a director is set at one year in order to clarify the responsibility of that director. The role of the outside director is to ensure transparency and fairness in Toyobo’s corporate management. Business execution is conducted by the Board of Corporate Executive Officers and Board of Corporate Officers, convened by the President and COO. The role of these bodies includes making decisions on matters relating to business execution as delegated by the Board of Directors, and reporting on companywide projects. The auditing structure consists of four auditors, two of whom are outside auditors. Auditors attend meetings of the Board of Directors and other important meetings and provide their opinion, as well as oversee the business execution of directors through such means as operational audits of each division. Toyobo has retained KPMG AZSA LLC as its accounting auditor in line with the Companies Act. The Internal Audit Office conducts internal audits, including at Group companies. Internal audits include monitoring to assess the effectiveness of internal controls.

Risk Management Structure

Toyobo has established the Planning Council and Management Council under the Board of Corporate Executive Officers. These bodies examine any significant new business proposals, investments or other initiatives prior to their implementation, and take steps to manage any business risks. For management of specific risks, Toyobo has established the CSR Committee, chaired by the President, for overall risk management. Subcommittees under this body consist of the Global Environment and Safety Committee, Product Liability Prevention/Quality Assurance Committee, Compliance Committee, Export Reviewing Committee, Internal Control Committee, Information Committee, and Research and Development Committee.

Strengthening of Group Governance

Toyobo has put in place a structure for company-wide corporate governance by establishing a special division in its Finance Department to manage affiliated companies, and reorganizing its Group companies by business division. For the auditing structure, Toyobo’s in-house auditors conduct oversight in alliance with the auditors of affiliated companies through the Group auditing boards and other bodies.

Compliance Structure

Toyobo has established the Compliance Committee to conduct decision-making and oversight for Toyobo's compliance activities, with compliance planning and strategy provided by the Compliance Group within the Legal Department. Toyobo has also formulated the Toyobo CSR Charter and Toyobo Corporate Code of Conduct, and taken steps to ensure that the rules are universally understood.

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