Governance

Establishing and operating transparent management systems
to further enhance Group-wide corporate governanceTo continue to be a trusted company, we are working to enhance corporate governance throughout the Toyoda
Gosei Group. We are improving the appropriateness and efficiency of our operations by developing andoperating internal control systems to create a fair and transparent corporate governance system, while we
ensure its effectiveness through management supervision and audits by outside directors and outside Audit &Supervisory Board members. Furthermore, we are also implementing legal compliance, corporate ethics, andrisk management activities.

Corporate Governance
Basic Philosophy
We view the enhancement and strengthening ofcorporate governance with the aim of ensuring soundand efficient corporate management to be crucial
in achieving sustainable growth. Based on this, weare building and maintaining fair and transparent
management systems and organizational systems
that can respond effectively to a changing businessenvironment.
Additionally, Toyoda Gosei pursues consummate
corporate governance by voluntarily implementing a
range of policies in accord with the letter and spiritof the ideals and principles in Japan’s Corporate
Governance Code, formulated by the Financial
Services Agency and the Tokyo Stock Exchange.

Corporate Governance System
Toyoda Gosei has adopted an audit and supervisoryboard system and set up the Shareholders’ Meeting,Board of Directors, Audit & Supervisory Board, andaccounting auditors as statutory entities. We have also
put in place internal auditors and other internal control
systems including internal audits. The Board of Directors
consists of eight directors and holds regular monthly
meetings (extraordinary meetings held as needed),
where matters prescribed by law or in the Articles ofIncorporation and important matters related to corporate
management are reported, discussed, and resolved.
A system of corporate officers is used to speed up decisionmaking and business execution. Furthermore, by introducing
the Chief Officer System in June 2023 and transferringsome of the president’s authority and responsibilities to theChief Officers, we will cross over the boundaries of businessand regional operation bases to manage priority functions
on a global basis, thereby realizing highly strategic businessexecution and accelerating the speed of management.
For important business matters, meetings for the General
Managers’ Council and Management Council are held
monthly. Functional council and committee meetings

relevant to key areas such as technology, costs, andpersonnel are also held as needed to ensure appropriate
management decisions.
The Audit & Supervisory Board consists of five members
and holds regular meetings. Members also attend
important meetings such as Board of Directors’ meetings
and audit each department and subsidiary, throughwhich they fulfill their function of auditing corporate
management. Accounting auditors are external auditors
who combine auditing functions with a commitment toensuring an independent and fair auditing system.
The Company uses the current system because audit,
supervisory, and execution functions are well coordinatedwith each other under this structure, with legality andefficiency of the Company’s decision-making andbusiness execution sufficiently ensured.
Also, in order to strengthen the supervisory function of
the Board of Directors and to increase the objectivity andtransparency of the decision-making process, we haveestablished the Executive Appointment Committee andExecutive Compensation Committee under the Board of
Directors as non-mandatory advisory committees.

Internal Control Systems
In accordance with the provisions of Japan’sCompanies Act, Toyoda Gosei has formulated a Basic
Policy on Establishing Internal Controls. Under thispolicy, we are striving to ensure appropriate operations
by establishing internal control systems, which help
us deliberate important matters, establish related rules
and guidelines, and handle internal audits, complianceand risk management. Every year, the Board of
Directors checks the status of establishment andoperation of internal controls in an ongoing initiative toimprove and reinforce them. In April 2023, we revised
the basic policy with the aim of improving internal
controls, including management of subsidiaries.
Also, to cultivate a healthy internal controls

70

environment at Toyoda Gosei and its subsidiaries, allGroup companies share its management philosophy.
The Toyoda Gosei Group Charter for Business Ethics,
a shared guideline for compliance, has also been
instituted and expanded to subsidiaries. While
respecting the independence of subsidiarymanagement, we receive regular business reports fromsubsidiaries and set up systems to confirm the
propriety and legality of subsidiaries’ businesses
through advance approval reports. We also send
non-executive directors and Audit & Supervisory Board
members to key subsidiaries in a system to monitor
and act as a check on their business execution.

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Corporate Governance System
Shareholders’ Meeting
Appointment/
Dismissal

Appointment/
Dismissal
Audit

Board of Directors
Appointment/
Dismissal
Reports

Supervision

Consultation
Submission/
ReportExecutive
Appointment
Committee

Appointment/
Dismissal

Audit & Supervisory Board

Cooperation

Accounting Auditors

Main Councils &Committees

ReportExecutive
Compensation
Committee

Audit

Audit

Audit & Supervisory
Board Dept.

• Board of Directors• Sustainability Council• General Managers’ Council• Management Council

Business Execution System

President• Sales and Technical Council• Research andDevelopment Council• Profit and Cost Council• Production andPurchasing Council• Human Resources Council• IT Planning Council

Direction/Supervision

Reports
Business Execution
Audit

Audit Div.
Cooperation with
Audit & Supervisory Board
and Accounting Auditors

Company-wide Councils

Corporate Officers

Submission/
ReportFunctional/Business Divisions

Management Councils

Decision/
Approval

Committees

Subsidiaries and affiliates

Sustainability Council
In November 2021, we established our new Sustainability
Council with the aim of achieving sustainable corporate
growth, improving corporate value, and contributing to thesustainable development of society. In this Council, we
work diligently to discuss and decide on key action items
related to sustainability and confirm how the initiatives
are progressing with a sense of urgency. Chaired by thepresident, the Council consists of all directors, including
those from outside the company, Audit & Supervisory
Board members, and general managers of divisions,
including those in overseas regions, and implements• Internal Controls
Committee• Export Control Committee• Central Safety and HealthCommittee• Carbon Neutrality andEnvironmental Committee• Quality Committee

Functional Councils

balanced sustainability measures with a high degree ofobjectivity and transparency.
Frequency

Generally meets twice yearly

Chairperson President

Members

All directors and Audit & Supervisory Board members(including outside directors and Audit & Supervisory
Board members), general managers of divisions andoverseas regional operation bases

Main
Agenda• Make decisions on key action items related to sustainability• Report on the status of implementation of key action
items and target values• Make decisions on important external disclosure items

Executive Compensation Committee and Executive Appointment Committee
Toyoda Gosei’s Executive Compensation Committee
The chair of both committees is appointed from outside
and Executive Appointment Committee are composed of
directors to further enhance transparency and objectivity.
members of which more than half are outside directors.
Name

Executive
Compensation
Committee(Number of meetings
in FY2022: 1)

Role

Members

Deliberates and reports on
the compensation systemfor directors and theirindividual compensation(restricted stock-based
compensation, etc.)

Katsumi Saito, president*
Naoki Miyazaki, director
Kimio Yamaka, outside
director (chairperson)
Mayumi Matsumoto,outside director
Takashi Wada, outside
director** Assumed position in June 2023

Attendance(FY2022)

Name

—
1/1
1/1
1/1
—

Executive
Appointment
Committee(Number of meetings
in FY2022: 2)

Role

Members

Deliberates and reports
on proposals regarding
the appointment anddismissal of directors andAudit & Supervisory Board
members (appointment of
the president, etc.)

Katsumi Saito, president*
Naoki Miyazaki, director
Kimio Yamaka, outside
director (chairperson)
Mayumi Matsumoto,outside director
Takashi Wada, outside
director*

Attendance(FY2022)
—
2/2
2/2
2/2
—

* Assumed position in June 2023

T OYODA GOSEI REP OR T 20 2371Governance

Policies and Procedures to Appoint and Remove Senior Officers and Nominate Candidates for Directors andAudit & Supervisory Board Members
Nominations of candidates for directors and Audit &magnetism in terms of their ability to make accurate
Supervisory Board members are made after deliberationand prompt decisions after taking into account theand reporting by the Executive Appointment Committee,balance of knowledge, experience, and capabilities offollowed by a resolution of the Board of Directors and athe management team and the Board of Directors as asubsequent Shareholders’ Meeting.
whole. The candidates are comprehensively nominated
The nomination policy for senior officer and director
and appointed on the basis of their ability to fully
candidates is based on the candidate’s personal
comply with laws and corporate ethics.
Skills Matrix• The following table shows each director’s and Audit & Supervisory Board (ASB) member’s expected field ofspecialty based on their past experience.
• The composition of our Board of Directors and Audit & Supervisory Board (ASB) as a whole takes into consideration
the balance of knowledge, experience, and abilities, as well as diversity and number of members.

Director

Director

Director

Director
OutsideIndependent

Outside

◎









◎







Overseas operations

Finance

Legal/Risk management

















Technology

Manufacturing (production/
quality management)OutsideIndependentOutsideIndependent







Sales














Environment and energy

Personnel



DX







New business(non-automotive)

72

OutsideIndependentAttendance at Board of
Directors’ meetings(Apr. 2022–Mar. 2023)
Attendance at Audit &Supervisory Board meetings(Apr. 2022–Mar. 2023)

ASB Member ASB Member ASB Member ASB Member ASB Member

OutsideIndependentCorporate management

Masahiko
Yokoi**

Takashi Wada**

Director

Hitoshi
Kuwayama*

MayumiMatsumotoDirector

Chika Kako

Kimio Yamaka

Director
Vice President

Yamato Suzuki

Naoki Miyazaki

Director
President

Kenji Oiso

Mitsuhiro
Nawashiro**

Executive Compensation
Committee◎ indicates chairperson
Executive Appointment
Committee◎ indicates chairperson

Masaki Oka

Skill

Hiroshi Yasuda

Position at
Toyoda Gosei

Katsumi Saito**

Name* Assumed positionin June 2022** Assumed positionin June 2023






























−

13/13

13/13

−

13/13

13/13

13/13

−

13/13

13/13

13/13

11/11

−

−

−

−

−

−

−

−

−

12/12

12/12

12/12

10/10

−

About Toyoda Gosei

Value Creation Story

The nomination policy for Audit & Supervisory Board
member candidates is to nominate candidates from acomprehensive perspective of putting the right personin the right position while ensuring a balance between
diverse perspectives on corporate management,
including knowledge of finance, accounting, and legal
affairs, and knowledge of the Company’s business.

Value Creation Strategy

Foundation of Value Creation

Data

If a candidate for senior officer or director is found tohave committed any fraudulent act or seriously violated
any law or regulation, or the Articles of Incorporation,
we will take procedures for their dismissal.

Skills required by the Board of Directors and Audit & Supervisory Board are selected to
implement the medium- to long-term business plan with the aim of achieving sustainablegrowth and increasing the corporate value of the Company.





Reasons for Skill Selection and Its Definition

To make appropriate management decisions that contribute to the Toyoda Gosei’s sustainable growth and enhancement of corporate value based on
experience and a proven track record in corporate management in the drastically changing global business environment surrounding Toyoda Gosei.
To grow our business globally by utilizing overseas business experience and knowledge of the overseas business environmentand business management.
To establish an accurate financial reporting system and a solid financial foundation, to invest in growth to achieve sustainablegrowth and increase corporate value, and to realize appropriate shareholder returns.
To implement the establishment of a governance structure based on legal compliance and appropriate risk management, tobuild a foundation for sustainable growth and increased corporate value, as well as to improve the effectiveness of supervision.
To achieve business growth as indicated in the medium-term business plan through technological innovation using advanced
technology and through skills and expertise in medium- to long-term product planning and development.
To adopt innovative production technologies and improve manufacturing sites and to maintain and improve product quality as
a company with its main focus on the automotive parts manufacturing and sales business.
To expand sales globally in response to changing automobile needs and to continue to provide high value-added products based on
skills and knowledge in preparation of sales strategies and information gathering through smooth communication with customers.
To accelerate and implement initiatives integrated with business operations in areas requiring environmental consideration andto fulfill our social responsibility.
To develop and maximize the abilities of each and every employee by utilizing knowledge of diversity, inclusion, respect forhuman rights, and wellbeing.
To implement business transformation and establish a corporate culture utilizing digital technology, which is necessary tostrengthen the Company’s management foundation and build new businesses.
To plan and implement medium- to long-term plans to search for, develop, and launch new businesses in non-automotive
fields, and to expand new businesses in the future.

T OYODA GOSEI REP OR T 20 2373Governance

Changes in Numbers of Directors and Audit & Supervisory Board Members
In 2012, Toyoda Gosei adopted a system of corporate
officers and downsized its Board of Directors to nine
directors from 23 as of 2011. It appointed its first outside
director in 2015.
No. of Directors

The Board currently comprises eight directors, three or
37% of whom are outside directors. One of the outside
directors is a woman. The outside director appointments
have increased the Board’s objectivity and diversity.

Outside Director Ratio

Female Director Ratio

23

2011

8

0%

37%

0%

12%

2023

2011

2023

2011

2023

No. of Audit & Supervisory Board (ASB) members
5

2011

Outside ASB Member Ratio

Female ASB Member Ratio

5

2023

60%

60%

0%

20%

2011

2023

2011

2023

Major Initiatives to Strengthen the Governance Structure
2012

2015

2019

2020

2021

2022

2023

 Changed ratio of outside directors to 1/3

Board ofDirectors
and Audit &Supervisory
Board Reduced number of
appointed directors

Business
Execution
System Adopted a corporate Reduced the number ofcorporate officers
officer system
 Started implementation ofJapan’s Corporate Governance Code

 Established Executive Compensation
Committee and Executive
Appointment Committee
 Appointed a female director

 Appointed an independent
outside director as a chairpersonof both committees
 Appointed a female Audit &Supervisory Board member Adopted the Chief
Officer System
 Established the Sustainability Council

Councils
andCommittees

 Changed name to Compliance and Risk Management Committee Corporate Conduct
Ethics Committee
 Environmental Committee

Board of Directors
The Board of Directors deliberates from many different
perspectives on the direction of management,
including management and business strategies, thenreports and discusses on progress after any necessary
resolutions have been passed. In such a way, theBoard supervises from a number of different viewpoints
on whether management strategies are being

 Changed name to Carbon Neutrality
and Environmental Committee

executed appropriately. In addition to strengthening
the Company’s internal control system and risk
management system, in recent years the Board of
Directors has been working to achieve sustainablecorporate growth amid a chaotic business environment,
including political instability, worsening environmental
problems, and the COVID-19 pandemic.

Main Agenda Items and Reports by the Board of Directors in FY2022

74

 Changed name to Internal
Controls Committee

Topic

Main Agenda Items and Reports

Management/
Business
Strategies• Medium- to long-term business strategy• Domestic and overseas subsidiaries’ business strategies (expansions, mergers,
downsizing)• Business execution reports (results, production, quality, safety, technology/development,
intellectual property, priority risk management, etc.)• Progress report on matters resolved by the Board

Corporate• Financial results, etc.
• Appointment of directors and Audit & Supervisory Board members, appointment ofexecutives, executive compensation• Sustainability measures• Internal control systems, internal audit department reports

Investment and
Loan Projects• Investment in buildings and facilities for expansion of domestic and overseas production
bases• Financing for domestic and overseas subsidiaries

Number of Agenda Items and Reportsby the Board of Directors in FY2022
1Q

2Q

3Q

4Q

Total

Agenda
Items

16

2

8

9

35

Reports

14

8

9

8

39

Total

30

10

17

17

74

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Evaluation of the Effectiveness of the Board of Directors
Effective functioning of corporate governance isessential for the Company’s sustainable growth, toenhance corporate value, and to contribute to thesustainable development of society. Therefore, to ensure
the effectiveness of the roles and responsibilities of theBoard of Directors, evaluations and opinions are heard
every year from members of the Board. The Board of
Directors then analyzes, evaluates, and deliberates on
measures for improvement. In FY2022, debriefings withall nine directors and all five Audit & Supervisory Board
members were conducted to assess their performance.
As a result, Toyoda Gosei found no material deficiencies
across any of its assessments and concluded that theBoard continues to function effectively.
As in the previous year, the Board received high ratings
for its openness and candid discussions and support
for outside officers. We believe that questions andopinions from outside officers are important for ourdecision-making process, and we will continue these
efforts. However, regarding the Board’s discussions on
medium- to long-term policies, which has been an issue

for some time, members commented that opportunities
were provided for discussion at the Board of Directors’
meetings, but more active discussion was desired,
and that opportunities for discussion of measures andstrategies were desired rather than reports on initiatives.
Accordingly, Toyoda Gosei will set up opportunities fordiscussion and exchange of opinions not limited to theBoard of Directors’ meetings. Regarding the resumptionof opportunities to understand the actual situation on
the front line through on-site visits, we have resumed
process inspections for the agenda items raised by
the Board of Directors’ meetings as a priority, andwe will further expand such opportunities this year. In
addition, we are working to improve communication
by holding lunch gatherings to ensure opportunities
exclusively for communication among outside officers,
and by replacing individual interviews with roundtablediscussion-type meetings with all outside directors
for further improving communication. Through these
efforts, we will work to further improve the effectivenessof the Board in the current fiscal year.

Board Effectiveness Evaluation Process
Evaluation Method

Debriefing Items (Main Items)

Interview: Nine directors and five Audit & Supervisory Board members
Evaluation process: Analysis of interviews and debriefing results to ensure
anonymity• Roles and responsibilities of directors• Deliberations within the Board• Supervisory function of the Board• Support for outside officers* More detailed sub-items are laid out under the main items of the debriefing
to allow for a well-rounded evaluation.

FY2022 Board Effectiveness Evaluation Results
Issues Identified

Measures

Enhancing discussions on medium- to longterm plans and future visions

Enhance discussion of the 2030 Business Plan and its initiatives for medium- to long-term
management strategy and corporate value enhancement

Providing information to outside officers• Provide more in-depth information through explanations of business operations by executives in charge• Enhance opportunities for discussion with officer candidates• Resume opportunities for on-site visits that had been suspended due to COVID-19 measures

Opportunities for exchange of opinions among
outside officers

Plan opportunities for exchange of opinions among outside officers to further improve governance

Ensuring further diversity of the Board

Continue to select candidates with diversity in mind based on the skill matrix and to treat this as an
ongoing issue for consideration

Issues Evaluated in FY2021 for Board Effectiveness and Status of Initiatives in FY2022
Main Feedback (Issues) in FY2021
Enhancing discussions on medium- to longterm plans and future visions
Discussions on measures to respond toenvironmental changes (CASE, etc.)

Initiatives in FY2022
Continued to provide opportunities for discussion and reporting at the Board of Directors’ meetings on
initiatives to improve corporate value and medium- to long-term management strategies in response tochanges in the business environment

Explanations on the background of individual
investments and their relationship withmedium- to long-term strategies

Discussed individual projects at the executive level after indicating the direction of capital investment tomake projects easier to understandEnsuring time for outside officer liaison
meetings

Increased the time given for outside officer liaison meetings for further exchange of ideas anddiscussions

Ensuring further diversity of the Board

Continued selection of diversity-conscious candidates by arranging experience and expertise required
for the growth of the Company in a skills matrix

T OYODA GOSEI REP OR T 20 2375

Governance

Expected Roles of and Support for Outside Directors
All three outside directors possess a wealth ofexperience and keen insight.
Mr. Yamaka brings a wealth of experience andinsight in the areas of finance and the environment,
Ms. Matsumoto in the areas of the environment andthe SDGs, and Mr. Wada in the areas of corporate
management and manufacturing. Ms. Matsumoto is
Toyoda Gosei’s first female director.
The three adeptly fulfill monitoring and advisory roles in
addition to actively participating in Board discussions.
In their monitoring role, they receive support in theform of departmental briefings on business operations
and challenges and direct access to frontline
operations through on-site visits to domestic andoverseas subsidiaries to better understand the actual
state of operations. Additionally, they are briefed inadvance on the content and background of resolutions
to be voted on at Board meetings to facilitate sounddecision-making.
At the same time, the outside directors advise
management on company direction and businesschallenges. Advisory opportunities include regularlyscheduled liaison meetings attended by all outside
directors and outside Audit & Supervisory Board
members, each of whom also attends various othermeetings, including the Sustainability Council,
Sales and Technical Council, Carbon Neutrality andEnvironmental Committee, and ad hoc meetings.

Outside Directors and Outside Audit & Supervisory Board Members
At the annual Shareholders’ Meeting, held on June 15,2023, Kimio Yamaka, Mayumi Matsumoto, and Takashi
Wada were appointed as outside directors, andMasahiko Yokoi was appointed as an outside Audit &Supervisory Board member. Including Chika Kako andHitoshi Kuwayama, who are currently in office, a totalof three outside Audit & Supervisory Board members
have been appointed.

Election of Outside Directors and Outside Audit & Supervisory Board Members
Appointment

Outsidedirectors

Name

Independent
Director/Auditor

Kimio
Yamaka

To benefit from his management oversight and advice based on his extensive experience and expertise infinance, particularly policy finance, project due diligence, and the environmental and energy sectors.
Mr. Yamaka has been designated as an independent director because he meets the requisite criteria and isdeemed free of potential conflicts of interest with regular shareholders.



To benefit from her management oversight and advice based on her extensive experience and high-levelinsight as a news anchor and researcher in the broad fields of social issues, environment, and energy in the
management of Toyoda Gosei.
Ms. Matsumoto has been designated as an independent director because she meets the requisite criteria and isdeemed free of potential conflicts of interest with regular shareholders.



To benefit from his management oversight and advice based on his extensive experience and expertise in the
management of manufacturing companies over many years.
Mr. Wada has been designated as an independent director because he meets the requisite criteria and isdeemed free of potential conflicts of interest with regular shareholders.

MayumiMatsumotoTakashiWada

To incorporate into Toyoda Gosei’s audits her wealth of experience and keen insight gained from her career at
Toyota Motor Corporation, where she served mainly in vehicle development and materials development roles
and was involved in management as a managing officer.

Chika Kako
OutsideAudit &
Supervisory
Board
members76

Reason for Appointment

Hitoshi
Kuwayama

To incorporate his extensive experience and deep insight as a lawyer in the auditing of Toyoda Gosei.
Mr. Kuwayama has been designated as an independent auditor because he meets the requisite criteria and isdeemed free of potential conflicts of interest with regular shareholders.

Masahiko
YokoiTo incorporate his extensive experience and deep insight as a manager in the auditing of Toyoda Gosei.
Mr. Yokoi has been designated as an independent auditor because he meets the requisite criteria and is deemed
free of potential conflicts of interest with regular shareholders.

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Executive Compensation
Directors’ compensation consists of monthly fixedcompensation and performance-based compensationin the form of cash bonuses (short-term incentive) andstock-based compensation (long-term incentive) basedon the idea that directors should be appropriately
incentivized to pursue sustained growth in Toyoda Gosei’svalue. Directors’ compensation is split roughly 70:20:10
among monthly compensation, cash bonuses, and stockbased compensation, respectively.
Monthly compensation is set at a fixed amount thatreflects the recipient’s job responsibilities and experience
as well as compensation levels at other companies. Cashbonuses are based primarily on fiscal yearly consolidated
operating profit. Secondary variables that factor into theirdetermination include the degree to which fiscal yearlyplans are attained, employees’ bonus levels, bonus levels
at other companies, medium- to long-term earnings,
previously paid bonus amounts, and contributions to ESG
management. Stock-based compensation is intended as
an incentive to pursue sustained growth in Toyoda Gosei’svalue. It is paid in the form of restricted stock to promote
greater sharing of value with shareholders.
Director Compensation Scheme
FixedCompensation

Through June 2020
Monthly compensation
Capped at ¥60 million/month
Up to¥720 million annualized()

Short-termLong-term

Performance-based compensation

Cash bonuses[Amount approved at annual
Shareholders’ Meetings]

80%

20%

Directors’ aggregate annual cash compensation (monthly
compensation plus bonuses) is capped at ¥650 million(outside directors’ share of which is capped at ¥65 million).
Directors’ aggregate annual restricted stock-based
compensation is capped at ¥100 million (outside directors
are not eligible for restricted stock-based compensation).
All three compensation caps were approved at the annual
Shareholders’ Meeting on June 12, 2020.
Outside directors and Audit & Supervisory Board
members receive only fixed monthly compensation
because their role is to oversee and audit managementfrom an independent vantage point.
Individual directors’ compensation is set in accord withthe above policies following a fair and transparent review/
reporting process by the majority-independent Executive
Compensation Committee, established in 2019.
At Executive Compensation Committee meetings, outside
directors have made suggestions about further enlarging
the incentive element of director compensation by, e.g.,
adjusting compensation to reflect the extent of directors’
respective environmental contributions.
Total Compensation for Each Officer Class,Total by Each Type of Compensation, and Numberof Officers Receiving the Compensation
Total Amount by Type of Compensation

From July 2020
Monthly
compensation

Cash bonuses

Restricted
stock-based
compensation

70%

Officer Class

Number(Millions of yen)
Total Executive
Fixed
Performance-based Non-cash of Subject
Compensation Compensation compensation Compensation
Officers(Millions of yen) Monthly
Stock-based (People)
Cash bonuses
compensation

20%

10%

Directors(excluding outside
directors)
Audit & Supervisory
Board members(excluding outside
members)
Outside officers

Compensation

325

222

74

28

6

76

76

—

—

2

70

70

—

—

7

* Bonuses are provisions for FY2022.

Internal Audits, Audit & Supervisory Board Members’ Audits, and Accounting Audits
We have set up the Audit Division to handle internal
audits. With the aims of achieving business objectives
and preventing misconduct and mistakes, internal
audits are conducted across the overall business(including audits of functional departments) based on
an internal auditing plan approved by management at
the beginning of each term.
The results of internal audits are reported to
management, and audited departments are given
recommendations for improvements based on the audit
results. The effectiveness of internal audits is increased
by checking their improvement plans and results.
Each Audit & Supervisory Board member follows theauditing policy and audit plan established by the Audit& Supervisory Board when investigating the Company
and subsidiaries. They attend the meetings of importantdeliberative bodies and committees including theBoard of Directors, General Managers’ Council, andManagement Council, listen to reports on businessfrom directors and others, inspect financial statements
and other important documents, and conduct on-site
audits of offices and subsidiaries to audit theperformance of duties by directors from theperspectives of ensuring legality and appropriateness,
protecting assets and rights, and preventing loss.
Moreover, a special department has been establishedto assist the auditors’ audits.
The certified public accountants who performed the
FY2022 accounting audit of Toyoda Gosei were Satoko
Nakatani and Kosaku Kawahara ofPricewaterhouseCoopers Aarata LLC.
Audit & Supervisory Board members, internal auditing
department personnel, and accounting auditors
regularly meet to confirm their respective auditing
systems, auditing policy, auditing plans, implementation
status, and audit results. They cooperate in performing
efficient and effective audits, contacting each other as
needed to exchange ideas and share information.

T OYODA GOSEI REP OR T 20 2377