Risk Management

Basic Stance

The Toyota Boshoku group anticipates various risks including management risk, risk in daily operations, and risk associated with disasters and accidents, as well as risk arising from the external environment such as global warming and water, corruption-related risks (such as bribery, cartels (agreements upon bids, prices, allocating the supplier and any item to avoid competition among with competitors), embezzlement, and conflicts of interest), and social reputation risk^*.
In order to respond swiftly and appropriately to these risks, we identify issues through risk assessments and are continuously working to comprehensively reinforce our management and mitigate risks.

Risk of losing societal trust

Risk Management Activities

Centered on the Chief Risk Officer (CRO), regions, the Corporate Operation unit and other functions are working together to continually implement a PDCA (plan-do-check-action) cycle for risk management, in order to counter the various risks affecting our business.
The Risk Management Promotion Meeting has been established within the Toyota Boshoku group to globally address business execution and continuity-related risk, as well as compliance risks such as corruption, bribery, accounting fraud, and conflicts of interest, and convenes twice a year.
We are performing even more effective risk management activities, including monitoring the status of risk response by the Board of Directors.

The risk management system and associated activities

Evaluation points for materiality-impacting risks (Impact level)

By managing risks from the perspective of improving corporate value over the medium- to long-term, we are able to prevent risks before they occur.

Materiality	Evaluation points
1. As an Interior Space Creator we will contribute to people's quality of life, creating comfort, safety, and reassurance through innovation	Stable supply
2. Using our established technical capability, we will contribute to realize a society with no traffic casualties through providing products that assure safety	Product safety
3. Together with our business partners, we will realize MONOZUKURI innovations that minimize environmental stress	Environmental impact
4. We will develop people capable of contributing to society, who have diverse values, a challenging spirit and understand the value of strong teamwork	Occupational safety
5. We will continue to be a company of integrity trusted by all our stakeholders, inheriting our tradition of fairness and moral behavior to the next generation	Compliance

Response in the event of a crisis

Crisis levels

When a crisis occurs in the Toyota Boshoku group, the crisis level is determined according to the situation. We then appoint an appropriate chief of the disaster control headquarters, and set up a response system based on the crisis level.

Level	Chief of the disaster control headquarters
Level A (Serious crisis)	President (Comprehensive Countermeasures Headquarters)
Level B (Major crisis)	Chief Officer or Segment Chief of the Segment to which the department and region with responsibility for said risk(s) belongs (Countermeasures project)
Level C (Individualized response crisis)	Chief of department with responsibility for individual said risk(s), subsidiary company president (Countermeasures team)

Crisis response system (in case of Crisis Level A)

Main Actions Taken Against Global Priority Risks in Fiscal 2026

Risk	Main actions taken in fiscal 2026
Earthquakes	Evacuation drills, drills for setting up a company-wide disaster response headquarters, on-site in-house firefighting organization drills, drills to operate a disaster response headquarters at an alternative site in the event that headquarters is affected by a disaster Promotion of Business Continuity Management (BCM) activities, etc.
Fire and explosion	Safety and fire prevention cross-checks conducted by officers, division general managers, department general managers, and chief leader-level personnel; safety and fire prevention inspections at regions outside Japan and high-risk suppliers Preventing the fading of memories of past fires and conducting hazard prediction training at the Safety Act Center; Fire Services Act training for managers; and fire prevention education during Toyota Boshoku Group Fire Prevention Day
Cyberattack	Ongoing initiatives to enhance company members' awareness of security (in-house exhibitions, security training, targeted email drills, etc.) Strengthening system- and operational-related measures aimed at early detection of cyber risks, and preventing the spread of viruses within the Company
Geoeconomic	Strengthening information gathering and responding promptly as needed regarding trends in US trade policy, including tariff policies Incorporating expertise and insights from experts on economic security and geopolitical trends In collaboration with various economic organizations such as the Japan Auto Parts Industries Association (JAPIA), sharing industry and policy trends with relevant parties and responding in a timely manner

Global Priority Risks in Fiscal 2027

Based on the results of the risk assessment for fiscal 2026, we selected global priority risks for fiscal 2027.

Risk map formulation process

Considering the risk environment surrounding the Toyota Boshoku group, CRO and others selected (drafted) the global priority risks based on:
1. results of risk analysis and assessment by the department responsible for risk;
2. risks considered important by external organizations, etc.; and
3. information on crises that have emerged within the Toyota Boshoku group.
These global priority risks were then discussed and finalized by the Risk Management Promotion Meeting.

4 Global priority risks in fiscal 2027

Earthquakes
Fire and explosion
Cyberattack
Geoeconomic risk

FY2027 Toyota Boshoku group risk map

Education and training

To enhance understanding of risk management activities and risk sensitivity, risk management training has been provided since fiscal 2022 for risk management personnel in the departments responsible for risk and at affiliated companies (inside and outside Japan).

Initiatives to enhance risk sensitivity

In fiscal 2026, with the aim of improving risk management capabilities and enhancing the effectiveness of the Business Continuity Plan (BCP) and Business Continuity Management (BCM), we conducted practical training focused on initial response drills simulating large-scale disasters. In addition, we regularly issue a risk management newsletter to share various risk cases within the Toyota Boshoku group and alert our company members to its publication.

BCM Activities

We are promoting BCM activities to enhance the effectiveness of the BCP, and build mechanisms to realize continuous improvement in normal times. In addition, we are carrying out activities including periodic evacuation drills, drills for setting up a response headquarters, emergency communication drills using safety confirmation tools, and stockpiling supplies for local residents.

Confidentiality Management and Information Security

Basic policy and structure

The Toyota Boshoku group considers the appropriate management of confidential information to be a key element of our business activities, and we have established a group-wide Information Security Policy. Based on this policy, we have created a global confidentiality management system, and each company in the group is working as one in a systematic and continuous manner to strengthen information security.

Information Security Policy

Initiatives to strengthen security

In light of recent advances in digitalization and the increasing sophistication of cyberattacks, we continue to implement and deepen these initiatives.
In addition, once a year, the Company and its consolidated subsidiaries inside and outside Japan collaborate to inspect the status of information security initiatives using the security guidelines. By means of this process, we work to improve internal systems, rules, education, and technical measures to ensure the same level of security on a global basis.

Security activities promotion cycle

Specific confidentiality management actions undertaken

Category	Target	Content	Frequency
Training	Personnel in charge of / responsible for confidentiality management	Carrying out training on confidentiality management	Once a year
	All company members	Carrying out internal training using audio-based learning materials posted on the intranet	Once a year
		Carrying out confidentiality management training by level, including upon joining the company, promotion, overseas assignment, and hiring as a permanent employee	Once for each
		Carrying out e-Learning training and targeted email drills	Training: Once a year Drills: Four times a year
Awareness	All company members	Posting information on the intranet, showing videos in cafeterias, displaying informational and caution-prompting message upon PC startup, etc.	Twice a month
Awareness	All company members	Activities to improve awareness during Confidentiality Management Month^*	Once a year
Auditing	Each division	Carrying out workplace self-inspection	Once a year
Auditing	Selected divisions	Conducting on-site audits and verifying compliance with rules	Once a year
Strengthening at affiliates	Affiliates inside Japan	Verifying confidentiality management status and identifying issues/promoting improvements through on-site visits by the General Affairs Department	As needed
Strengthening at affiliates	Affiliates inside Japan	Carrying out e-Learning training and targeted email drills	Training: Once a year Drills: Four times a year

Carrying out distribution of CHRO (Chief Human Resource Officer) messages, workplace self-inspections, workplace discussions, etc.

Developing human resources and raising awareness

In addition to enhancing systems, we believe it is important to raise the awareness of each and every company member, and so we continuously conduct e-Learning training and targeted email drills.^* Through hands-on training, we are carrying out activities to enhance security awareness.

Response drills using simulated suspicious emails

Enhancing guidelines and rules

The security guidelines are based on ISO 27001/27002, NIST (the United States' National Institute of Standards and Technology) Cybersecurity Framework, the Cybersecurity Management Guidelines of Japan's Ministry of Economy, Trade and Industry, etc., and are periodically reviewed to ensure they are responsive to changes in the environment.
We also update our confidentiality management rules and related procedures, and have introduced and are operating an internal information leak detection system to counter the risk of confidential information leaks.

●Provisions in line with our security guidelines

1. Systematic management planning (preparation of systems and rules, etc.)
2. Human resource management planning (training for company members, simulation training, etc.)
3. Technological management planning (improper system access/computer virus countermeasures, restoration measures, security surveillance, etc.)
4. Physical management planning (controlling access to relevant rooms/areas, etc.)
5. Preparation of response systems for accidents and hostile acts

Supply chain response and future policy

Particularly in recent years, we have been focusing not only on the countermeasures implemented by Toyota Boshoku, but also on close cooperation with group companies and suppliers to prevent security weak spots emerging in the supply chain as a whole.
In order to counteract increasingly sophisticated and diverse cyberattacks, we are enhancing our specialized knowledge, and proactively providing explanations and proposals addressing the importance of confidentiality management and information security, along with specific countermeasures.
Going forward, we aim to continue further strengthening security measures by working in unity with group companies and suppliers. We will make thoroughly safeguarding the safety and security of the entire supply chain our top priority, and aim to further bolster and advance information security.