Corporate Governance
As a global company operating in various countries and regions, Toyota Industries seeks efficient management while
maintaining and enhancing the fairness and transparency of its corporate activities.

Basic Perspective of Corporate GovernanceToyota Industries strives to enhance its corporate value in a stable manner over the long term and maintains society’s trustby earnestly fulfilling its social responsibilities in accordance with its Basic Philosophy. To that end, Toyota Industries strives
to further enhance its corporate governance in its efforts to maintain and improve management efficiency and the fairness
and transparency of its corporate activities.

Corporate Governance Structure

division regularly to monitor and follow the status of theirbusiness execution. At meetings of the Management
Council, directors, managing officers and audit &supervisory board members convene to report and confirm
the monthly status of business operations and share overall
deliberations at Board of Directors meetings and othermanagement-related information.
In addition, issues pertaining to human resources,quality, production, procurement and technologies are
discussed at the corresponding functional meetings. We
have also put in place committees to deliberate on more
specific matters, such as CSR, the environment and exporttransaction controls. These functional meetings andcommittees discuss important matters and action themes inrespective areas.

Implementation Structure
Toyota Industries convenes monthly meetings of the Boardof Directors to resolve important management matters andmonitor the execution of duties by directors. We also
appoint outside directors who have a wealth of experienceand knowledge concerning business management. They
attend meetings of the Board of Directors and give opinions
and ask questions as deemed necessary. Through thissupervisory function of outside directors, we ensure thelegality and validity of the Board’s decisions as well as
directors’ execution of duties from an objective perspective.
The Management Committee, which is composed of
directors at the executive vice president level and above as
well as relevant managing officers and audit & supervisoryboard members, deliberates on a variety of issues
concerning important management matters such as our
corporate vision, management policies, medium-termbusiness strategies and major investments.
Toyota Industries has a divisional organization system,with significant authority delegated to each businessdivision. For especially crucial matters, however, we haveestablished the Business Operation Committee to enable
the president to meet with the heads of each business

Audit & Supervisory Board System
Toyota Industries has adopted an audit & supervisory board
system. Two full-time audit & supervisory board members
and three outside audit & supervisory board members
attend meetings of the Board of Directors to monitor the
execution of duties by directors. At the same time, meetingsof the Audit & Supervisory Board are held once a month todiscuss and make decisions on important matters related toauditing. The full-time audit & supervisory board members

Shareholders’ Meetings
Selection/
Dismissal

Independent Auditors

Accounting
Audit

Selection/
Dismissal

ReportingExecutive Compensation
Committee

Exchange ofOpinions

Executive Appointment
Committee

Management Committee(Deliberates on important matters from management’s perspective)

Management Council

Cooperation

Board of Directors
Appointment/
Monitoring

Discussion/
ReportingMonitoring

Selection/Dismissal

Selection/
Dismissal

Direction/
Supervision

Reporting

Audit & Supervisory Board
Audit & Supervisory
Board Office

Monitoring

Human Resources

CSR

Quality

Environmental

Production

Export Transaction
Controls

Procurement

Safety and HealthTechnologies

Profit Improvement(Reports on and confirms execution of business operations)Internal Audit

Functional Meetings*1, Committees*2
Managing Officers

Business Divisions/In-House Company/Departments
Subsidiaries/Affiliates(As of June 10, 2016)
Toyota Industries’ Corporate Governance Reports are available at: https://www.toyota-shokki.co.jp/ (in Japanese)

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Toyota Industries Report 2016

*2: Committees

Reporting
Audit Dept.

n Appointment of Independent Members ofManagement
As a publicly listed company, Toyota Industries strives toensure the fairness and transparency of management.
Following the Securities Listing Regulations stipulated by
the Tokyo Stock Exchange and Nagoya Stock Exchange,
respectively, to further enhance our corporate
governance Toyota Industries has appointed as
independent members of management two outside
directors and two outside audit & supervisory board
members who are deemed to have no conflicts ofinterest with our shareholders.

Internal Control System
In accordance with the Companies Act, in May 2006 Toyota
Industries’ Board of Directors adopted the Basic Policies for
the Establishment of an Internal Control System (Basic
Policies) to ensure compliance, risk management as well as
the effectiveness and efficiency of business operations by
incorporating these policies into each business segment’s
annual policies and day-to-day routine management. The
CSR Committee, at its meeting held in March, assesses the
progress made in implementing the Basic Policies in theyear under review and determines actions for the coming
year, including reviewing the implementation structure andenhancing day-to-day operational management.
A revision was made to the Companies Act in April 2015
(enforced in May 2015), further requiring companies to set
up and upgrade a system to ensure the fairness of theiroperations and effectiveness of auditor duties. Accordingly,
we reviewed our Basic Policies, and the revised policies
have been adopted by the Board of Directors.
Furthermore, based on the Financial Instruments andExchange Law (so-called Japanese Sarbanes-Oxley Act(J-SOX)), we have established and appropriately operated
an internal control system to maintain the reliability offinancial reporting. The system’s status and progress arereviewed by the Audit Department and audited byindependent auditors. We determine which Toyota Industries

Group companies fall within the scope of J-SOX based on
the degree of impact on the reliability of financial reporting.
We determined that our internal controls over financial
reporting as of the end of fiscal 2016 were effective, andaccordingly, submitted an Internal Control Report in June
2016. The report was reviewed by independent auditors andjudged fair in their Independent Auditors’ Report.

Compliance Four Pillars of Compliance Activities
We believe that compliance means both adhering to laws
and regulations and observing ethics and social norms. In
order to ensure compliance, it is vital to instill an awarenessof compliance in each and every employee.
Under the strong leadership of top management, we
promote compliance throughout the Toyota Industries
Group, including consolidated subsidiaries in and outside
Japan, by formulating a Code of Conduct and thoroughly
informing employees together with checking and monitoring
compliance.
n Four Pillars of Compliance Activities

4

3

2

1

Checking
andMonitoring

Thoroughly
Informing
Employees

Formulating
rules

Leadership/
Organization

CSR selfassessment

Education on
relevant laws
and regulations

Employee Codeof Conduct

Declaration by
the presidentInternal rules

Compliance
Subcommittee

Audit

Manuals

Establishment and Reinforcement of
Implementation Organization
To promote compliance throughout the Toyota Industries
Group, we have established the Compliance Subcommittee(led by director in charge of the Legal Department*) as asubordinate organization to the CSR Committee. Every year,
the subcommittee formulates an action policy and conductsa follow-up check on the progress of corresponding
activities twice during that year.
*As of March 31, 2016n Organization for Promoting Compliance*1: Functional
Meetings

President

Business Operation Committee(Follows up on the execution of business operations)

Reportingcarry out auditing by attending primary meetings andreceiving reports directly from directors. Additionally, we
have assigned dedicated personnel, while audit &supervisory board members monitor the legality andefficiency of management through collaboration withindependent auditors and the Audit Department.

CSR Committee

n Internal Control Assessment System (Based on J-SOX)
Internal control activities undertaken by eachdepartment and consolidated subsidiary(Establishment and operation of internal controls)

Annual financial report

Activity reports
Compliance Subcommittee

Internal Control Report

Departments in charge of legal compliance: 12
Supporting department: 1

Review of internal
Improvement of Detection ofcontrols byinternal controls deficiencies Audit Department

These entities deliberate andfollow up on issues in respective areas.

Internal Control Audit Report
Audit on internal controls by independent auditors

Policies

Toyota Industries
Corporation

Consolidated
subsidiaries in Japan

Consolidated subsidiaries
outside Japan

Compliance committees

Compliance officers

17In addition, we have set up compliance committees at
subsidiaries in Japan and appointed compliance officers at
subsidiaries outside Japan in our efforts to promoteautonomous activities in respective communities incollaboration with the Compliance Subcommittee. In fiscal
2016, we carried out activities in line with local needs.
n Activities in Japan
We held a conference to improve responsiveness ofcompliance personnel from 31 consolidated subsidiaries inJapan. The conference also included a seminar by externallawyers regarding such topics as proper initial responses
when a case of misconduct occurs and measures toprevent recurrence.
n Activities in North America
We held the Compliance Officer Conference in North
America with participation of compliance officers from 19
bases. In fiscal 2016, we exchanged opinions on safe andsecure workplaces compliant with the Code of Conduct,
how to engage in communication that gives consideration to
cultural diversity and other themes that reflected current
U.S. social conditions.
n Activities in Europe
In Europe, the regional headquarters introduced ane-learning system to provide effective education on the
Code of Conduct at respective bases while identifying andassessing compliance risks and promoting preventive legal
measures for selected priority matters.
n Activities in China
In China, compliance officers from sevenbases attended the Compliance Officer
Conference in which they engaged in an
exchange of opinions and formulated astandardized Code of Conduct
applicable to all bases in the country. In
addition, a misconduct prevention
seminar regarding bribery,embezzlement, leakage of confidential
information and other sensitive themes
Standardized Code of
was held, with supervisors from each
Conductbase in attendance. Through these measures, we are
striving to raise an awareness of the prevention of
misconduct at all bases in China.
n Activities in Asia, Oceania and South America
We held a conference in Singapore attended by presidents
and compliance officers from nine bases in Asia (excluding
China), Oceania and South America, where we haven’t
established a regional headquarters, to promote complianceactivities. In addition to group discussions, the conference
also featured a lecture by an
external lawyer regarding
management of confidential
information, bribery prevention
and initial response when acase of misconduct occurs, allof which are a matter ofconcern in emerging countries. Compliance conference held in Singapore

Formulation of Code of Conduct andDissemination
Toyota Industries has formulated and distributed to
executives and all employees the Toyota Industries
Corporation Employee Code of Conduct, which serves asconduct guidelines that should be observed by employees,
and has been providing familiarization training. Subsidiaries
in and outside Japan have formulated their own Code of
Conduct appropriate to their respective business lines andcorporate cultures. Toyota Industries’ 31 consolidated
subsidiaries in Japan and 73 consolidated subsidiaries
outside Japan have already created their own Code of
Conduct and have been working to instill an awarenessamong their employees.
Simultaneously, to prevent significant risks of bribery andviolations of antitrust laws, in addition to the Code of
Conduct we have formulated corresponding regulations andbeen undertaking activities to familiarize employees withthese regulations.
Regarding bribery, Toyota Industries formulated then Compliance Committees (in Japan) and Compliance Ofﬁcers (outside Japan)(As of March 31, 2016)

Compliance officer
in Europe (TMHE)

Compliance officer
in China (TIMC)

Andreas Lundh

Zhu Lingling

Europe:37 companies

North America:
19 companies

Asia: 14 companies

Global Guidelines for Bribery Prevention. Particularly, incountries with a high risk of bribery, each base hasdeveloped internal rules in accordance with the applicablelaws in respective countries and been conducting activities
to familiarize employees with them.
As for antitrust laws, we have put in place a system toconduct a check and review before and after employees ofToyota Industries contact competitors. We are alsofamiliarizing all employees that they are prohibited from any
acts that may possibly constitute a violation of antitrust laws.
In fiscal 2016, we set up antitrust law compliance month andconducted enlightenment activities at relevant departments.

Thoroughly Informing Employees about
Applicable Laws and Regulations

Sanjay Agrawal

Sheena Seger

n Compliance Education Provided

Toyota Industries
Executive training

South America:
3 companies

TINA: Toyota Industries North America, Inc.
TMHE: Toyota Material Handling Europe AB
TIMC: Toyota Industries Management (China) Co., Ltd.
TMHIN: Toyota Material Handling India Pvt. Ltd.

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Toyota Industries Report 2016

Compliance, Environment (water quality and waste), Traffic safety,
Japan’s Personal Information Protection Law, Compliance hotline,
Prevention of bribery, Insider trading regulations, Copyrights, Japan’s
subcontracting law, Sexual harassment, Abuse of power in theworkplace, etc.

Courses established in fiscal 2016
Product liability, Basics of contracts, Export/import transaction control,
Antitrust laws (cartels), Act on Prohibition of Unauthorized Computer
Access, Management of confidential information, Illegal activities, etc.
*Provided to all employees. Additional courses are under consideration.

We have been working to strengthen checking andmonitoring of compliance through such measures asconducting ongoing compliance self-assessment andpromoting prevention activities at consolidated subsidiaries.
n Prevention Activities
We have been promoting prevention measures atconsolidated subsidiaries in and outside Japan through theCompliance Subcommittees and other entities based on
past incidents that occurred at Toyota Industries. Since
fiscal 2016, we have started using violations of laws andcases of misconduct at other companies as reference sothat similar compliance infringements will not occur at the
Toyota Industries Group. Specifically, in view of an insider
trading allegation at another company in Japan, we
reviewed our internal regulations on insider trading.
n Compliance Hotline
We also operate a compliance hotline (helpline) that allows
employees and their families to seek advice from external
experts on compliance-related matters without being
exposed to negative consequences, as well as to ensure
early discovery and the prevention of issues. This compliancehotline is cited in the Toyota Industries Corporation Employee
Code of Conduct, and we periodically distribute pamphlets
to inform our employees of the service. In fiscal 2016, we
introduced similar helplines at respective consolidated
subsidiaries in China, North America and Europe.

Compliance officer
in North America(TINA)

Japan: 31 companies

Oceania: 1 company

Courses started up to fiscal 2015

Checking and Monitoring ComplianceToyota Industries provides required legal knowledge toemployees according to their job ranks or positions,familiarizing them with the initial responses that should be
followed upon the occurrence of a problem and educatingthem on risk management. To new or young employees, we
provide easy-to-understand guidance on “what to do” and“what not to do” in order to improve their complianceawareness based on laws and corporate ethics, using the
Toyota Industries Corporation Employee Code of Conduct
as an instructional material.
Over the three years since fiscal 2014, we have created
and disseminated 27 e-learning materials in order tocultivate a deeper understanding of compliance among
employees and create an environment in which employees
foster compliance consciousness on their own.
In addition, in fiscal 2016 we invited external lawyers tohold executive legal seminars on “antitrust laws” and“revision of theCompanies Act
and corporate
governance” fordirectors, audit &supervisory board
Screen display of e-learning material to promotemembers andcompliancemanaging officers.

(As of March 31, 2016)

FY2014Compliance officer
in India (TMHIN)n Example Topics of e-Learning Materials

Rank-based (clerical,
technical) training
Training by function

Consolidated
subsidiaries inJapan

FY2015FY2016FY2017

Conducted training for newly appointed executives and legal seminars for executives

Ongoing initiative

Promoted training on quality, safety, the environment, labor, management ofconfidential information, export transactions, subcontracting and antitrust laws

Ongoing initiative★12,000 employees participated★12,000 employees participated★10,900 employees participated

Conducted training on the Code of Conduct, safety, etc.
★15,400 employees participated★20,200 employees participatedOngoing initiative★24,500 employees participated19Management of Confidential Information
Basic Perspective
We recognize that the personal information of customers,
employees and business partners as well as information
concerning our technologies and sales activities are assetsthat need to be protected. Accordingly, we are making ourutmost efforts to safeguard confidential information andstrengthen its management as one of the CSR areas.

Implementation Structure
Toyota Industries has set up the Information Security
Subcommittee (led by a director in charge of the General
Administration Department*1) as a subordinate organization
to the CSR Committee to promote proper management ofconfidential information, taking appropriate actions against
the risk of leakage of confidential information and complying
with laws such as the Unfair Competition Prevention Act andthe Act on the Protection of Personal Information.
To thoroughly implement the initiatives adopted by thesubcommittee, we appoint information security managers*2
and information security administrators*3 at eachdepartment. We strive to raise awareness about information
security among their staff by holding workplace meetingsand conducting self-checks regarding their information
security practices.
In fiscal 2016, to counter an increase in risk for leakageof confidential information we strengthened the security
check of visitors at the gates of the Toyota Industries
premises as well as conducted response training at theheadquarters based on the assumption that an incident or
accident occurred.
n Activity Examples

Activities up to fiscal 2015
Activities by Toyota Industries• Rank-based group education• Restrictions on taking photographs on company premises• Attaching a security cable with a lock to all PCs to prevent
unauthorized removal off the premises• Restricting the copying of electronic data on recording media• Stronger monitoring of email correspondence• Requiring employees to sign a confidentiality agreement andchecking the history of electronic data being taken off the premises
upon retirement
Activities in collaboration with other Toyota Group companies• “All Toyota Information Security Awareness Month” activities in May
and October to raise employee awareness and conduct auditing by
checking off-the-premises removal of personal computers andrecording media, etc.

New activities in fiscal 2016
• Strengthening the security check of information devices that visitors
bring onto the Toyota Industries premises• Conducting response training at the headquarters based on theassumption that an incident or accident occurred, etc.

Our consolidated subsidiaries in and outside Japan also
appoint respective information security managers andinformation security administrators. We have also developed
common guidelines concerning management of confidential
information, which have been distributed among these20

Toyota Industries Report 2016

subsidiaries, and follow up on their activities on a periodic
basis in our efforts to raise the level of confidential information
management throughout the Toyota Industries Group.
*1: As of March 31, 2016
*2: Head of each department*3: A person within the department, appointed by the head

Risk Management
Basic Perspective
Based on the Basic Policies for the Establishment of anInternal Control System in compliance with the Companies
Act, Toyota Industries is working to strengthen regulations
and a structure to promote risk management. We regard thefollowing aspects as the basics of risk management andimplement initiatives accordingly.
(1)	Incorporating measures to prevent and reduce potential
risks into daily routines and following up on the progressof implementation(2)	Ensuring quick and precise actions to minimize the impact
on business and society when a risk becomes apparent

Implementation Structure
Business divisions and other departments at the Head Officedevelop and promote annual action policies that integrate
measures to prevent and control risks related to quality,
safety, the environment, personnel, export transactions,disasters and information security. Progress is assessed andfollowed up by each functional management entity such as
the CSR Committee and the Environmental Committee. At
the same time, functional departments at the Head Officesuch as those responsible for quality, safety and theenvironment formulate rules and regulations and manuals
from a Group-wide perspective, including consolidated
subsidiaries. By confirming and following up on the progress
through operational audits and workplace inspections, they
provide support for raising the level of risk management at
each business division and consolidated subsidiary.
We have also formulated the Crisis Response Manual,
which defines our initial response to a problem or a crisis.
This manual lays out basic rules to be followed when a risk
becomes evident and a problem or crisis occurs. The aim isto ensure quick reporting to top management, perform an
accurate assessment of the impact on society and businessactivities and minimize damage through appropriate actions.
The content is reviewed and revised as deemed necessary
in response to changes in businesses and the surrounding
environment.

Furthermore, we divide these measures into the three
categories of “precautionary, pre-disaster mitigation,” “initial
response to be followed immediately after the disaster” and“restoration of production,” and are respectively making
Company-wide efforts.
In fiscal 2016, based on the results of a review of ourefforts in the previous fiscal year, we conducted disaster
drills in more realistic settings, confirmed procedures andstandardized countermeasures. We intend to continuously
upgrade our activities.

Discussion among members of
Plant Response Headquarters

Disaster Prevention Structure
We have been reinforcing our disaster prevention structure
to enable smooth transition from the initial response stage tothe production restoration stage.
The Disaster Prevention Response Headquarters, led by
the executive vice president and consisting ofrepresentatives from the functional departments at the Head
Office, is responsible for collecting information from plants
and other relevant parties and making Company-widedecisions based on the information collected.

Identifying inadequacies anditems to be improvedb) Tabletop Exercise
We provide training to the head (plant manager) andmembers of each Plant Response Headquarters to ensurethat we promptly make an initial response and offer support
to local communities in case of a disaster. Since fiscal 2015,
in addition to drills for enabling quick disaster response, wehave been holding discussion sessions on the theme of“thinking on your own” to raise awareness of each member
for disaster prevention.

n Disaster Prevention Structure
Disaster Prevention Response Headquarters (Established in Kariya Plant)
Plant Response
Headquarters
Kariya Plant
Obu Plant
Kyowa Plant
Nagakusa Plant &Morioka Works
Takahama Plant
Hekinan Plant
Higashichita Plant
Higashiura Plant
Anjo Plant

Key Facility
e-Lab (information
systems headquarters)

Remote Sites

Educational Sites
Company dormitories
Company resort
facilities

Affiliated Companies

Suppliers

Tokyo Office
Toyota L&F Customers
Center (Chiba)
TMHG Training Center(Handa)Efforts to Cultivate Human Resources
through Training
1. Training at Disaster Prevention Response
Headquarters 
We conduct simulation training in which employees collectinformation on damages to both inside and outside thecompany premises, swiftly make decisions and disseminate
these decisions throughout Toyota Industries.
Since fiscal 2015, assuming the occurrence of a disaster
during nighttime and on a weekend or holiday, we havebeen providing training to members selected from thefunctional departments who live close to the Head Office.

Response to Possible Major Earthquake
We consider the occurrence of a major earthquake as oneof the most significant risks. Since fiscal 2011, we havebeen implementing disaster prevention measures that focus
on three basic policies, namely placing maximum priority on
human life; placing top priority on the recovery of local
communities; and ensuring the quickest possible recovery.

Headquarters discussed the preparation status andinadequacies of items in the standard response procedures
formulated by each plant and worked to improve theprocedures to better respond to a disaster.

Reviewing policies on resumption ofoperations and how to return home

Disaster response meeting

2. Training at Plant Response Headquarters a) Workshops
In fiscal 2016, members of the Plant Response

Checking internal disasterdamage information

Confirming how to decide toresume operations

3. Training for Restoration a) Power Restoration Drill
Each plant has developed procedures to restore power
supplies, including electricity and gas, which are essential inrestoring production activities. Starting from fiscal 2015,
each plant conducts genchi genbutsu training on a periodic
basis. Through the training we are identifying problems andmaking improvements to step up our efforts to ensure quick
restoration activities. In fiscal 2016, we selected a modelbusiness division andstandardized measures.
We will consider theapplication of the initiatives
taken at the modelbusiness division
throughout the company.
Drill to restore a primary power sourceb) System Restoration Drill
The e-Lab, responsible for managing Toyota Industries’ dataservers, has created procedures to restore critical data aftera disaster. We conduct restoration drills jointly with Toyoda
High System, Incorporated, a consolidated subsidiaryengaged in development and operation of information
infrastructures and systems, and work to improve ourreadiness for quick restoration.
4. Training for Identifying Disaster Damage Starting from fiscal 2014, we repeatedly conduct drills jointlywith our affiliated companies and suppliers in order tofamiliarize them with the use of IT tools to quickly identify thedamage status during a disaster.

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