The Toyota Boshoku group has stated as the first part of its corporate philosophy the desire to promote corporate growth while fulfilling our responsibilities as a good corporate citizen in order to satisfy all stakeholders. To realise this, the Company recognises the importance of maintaining and improving management efficiency, fairness and transparency as a global company alongside efforts to ensure sustainable corporate activities and will strive to expand and enhance its corporate governance.
Specifically, the Company will advance the following: (1) Securing the rights and equal treatment of shareholders; (2) Appropriate cooperation with stakeholders other than shareholders; (3) Ensuring appropriate information disclosure and transparency; (4) Appropriate execution of the roles and responsibilities of the Board of Directors; and (5) Engaging in constructive dialogue with shareholders.
Response to the Corporate Governance Code
Toyota Boshoku has determined that it is in compliance with all principles of the Corporate Governance Code. We submitted the Corporate Governance Report to the Tokyo Stock Exchange.
Corporate Governance System
In addition to resolutely responding to the Corporate Governance Code, Toyota Boshoku is working to strengthen corporate governance with the aim of increasing corporate value.
In July 2018, Toyota Boshoku established the Management Advisory Council to serve as a forum for the candid exchange of opinions regarding management issues and other issues. The council consists mainly of outside directors and is separate from organisations under the Companies Act.
Corporate governance system (chart)
Initiatives for improving corporate governance
Role of training for directors and audit & supervisory board members
Prior to assuming office, newly elected outside directors and outside audit & supervisory board members receive explanations from internal directors and standing audit & supervisory board members about required knowledge pertaining to areas such as the Company’s businesses, financial affairs and organisations.
We also implement new officer training for newly elected directors when needed and provide them with explanations on required legal knowledge and the roles and responsibilities of directors. Moreover, we also promote their acquisition of financial, accounting and other related knowledge.
Standing audit & supervisory board members continuously participate in external seminars and study workshops, not only when they are newly elected, and acquire and update required knowledge. Additionally, every year we invite outside lecturers and hold the Lecture for Executive officers and Executive Officer Legal Affair Seminars for all executives and these events feature timely content tailored to the circumstances of the times.
Support structure for outside directors and audit & supervisory board members
The Company sends materials about the Board of Directors meetings beforehand to outside directors and outside audit & supervisory board members and also provides them with prior explanations on the important management issues of measures submitted to the Board of Directors. Additionally, the Company has assigned audit & supervisory staff to the Audit & Supervisory Board Office as part of a structure for supporting the business duties of audit & supervisory board members. Audit & supervisory staff support the daily auditing activities of standing audit & supervisory board members while also supporting the auditing activities of outside audit & supervisory board members through the operation of the Audit & Supervisory Board.
Evaluation results of the effectiveness of the Board of Directors
In order to evaluate the effectiveness of the Board of Directors, the Company conducted interviews with all directors and audit & supervisory board members, including outside members, by the corporate officer in charge of the administrative office of the Board of Directors. The results are analysed based on evaluation criteria provided by external evaluation organisations, then reported to the Board of Directors. The Company will work to enhance the effectiveness of the Board of Directors by thoroughly reviewing measures to address issues.
［Overview of Fiscal 2018 evaluation results］
- Important management decision-making was handled effectively and duties were performed effectively.
- （２）Composition of the Board of Directors
- Number of directors, including multiple outside directors, as well as structure were generally appropriate.
- （３）Operational status of the Board of Directors meetings
- Necessary subjects were discussed and reported, oversight and decision-making were conducted in a timely and appropriate manner based on an exchange of opinions, and operations were running appropriately.
- （４）Presentation of information to outside directors
- Necessary information for advice and oversight was provided.
- （５）Main issues
- a. Made considerations for selecting outside directors with emphasis on greater diversity taking into account the appropriate composition of members.
b. Further invigorated strategy discussions.
Policy for constructive dialogue with shareholders
With the aims of achieving the Company’s sustainable growth and enhancing corporate value over the medium and long terms, the Company promotes constructive dialogue with shareholders and provides them with easy-to-understand explanations of the Company’s management policies and business conditions as part of efforts to gain the understanding of shareholders.
［Main policies for constructive dialogue with shareholders］
- （1）The Group Chief of the Corporate Planning Group is designated as the person in charge of overseeing dialogue with shareholders.
- （2）To promote dialogue with shareholders, relevant departments within Toyota Boshoku proactively cooperate, which includes creating and examining disclosure materials and sharing necessary information, while undertaking fair and proper information disclosure.
- （3）The Company holds quarterly results briefings and company information sessions that utilise domestic securities company conferences for analysists and institutional investors. Additionally, the Company holds plant tours for shareholders. Furthermore, the Company works to enhance its information disclosure by publishing business reports and the Toyota Boshoku Report.
- （4）Opinions obtained through dialogue with shareholders are provided to management and related departments as feedback and this information is shared.
- （5）The Company designates the period prior to the announcement of financial results as a silent period and restricts dialogue with investors. In the event that insider information is disclosed within the Company, the related parties sign the insider information registration management ledger as part of thoroughgoing information management.
Self-inspections are conducted on the status of internal controls via a checklist in order to regularly review and assess organisational governance processes, and the respective internal auditing departments are working to prevent inappropriate behaviour and mistakes at all our global locations by conducting audits at Toyota Boshoku divisions, plants, subsidiaries and affiliates. Auditing activities in collaboration with audit & supervisory board members are carried out and these include reporting results of audits to top management as well as receiving advice from audit & supervisory board members.