GovernanceInterview with Outside Officers
Two outside officers, Mr. Wada and Mr. Yokoi, who took office in June 2023, discussed governance and the 2030
Business Plan.

Takashi Wada
Outside Director

Masahiko Yokoi

Outside Audit &Supervisory Board Member

We have great expectations for the growth of Toyoda Gosei,
which aims to bring together the future dreamsof its stakeholders by providing value in safety,
comfort, and decarbonization.
Chapter 1:
Providing a push when making bigdecisions and major changes needed tostrengthen corporate governance
Wada: I joined Sanken Electric in 1979, whose main
products are semiconductors, electronic components,
and power supply systems, and have been with thecompany for over 40 years. My first assignment was in
the Information Systems Department, where for about 20years I installed ever-changing IT technologies, from host78

computers to online systems, at sales and production
sites. Since I experienced the first period of digitalizationin Japan and the world, I am open-minded about
implementing DX, which has attracted growing attention
recently.
After that, I was involved in a wide range of areas,
including the secretarial section, materials and production
management, and factory and production control, andfrom 2015, I served as president for six years andchairman for one year. At the time of my appointment aspresident, the company was in a very difficult situation interms of performance and finances due to the lingeringAbout Toyoda Gosei

Value Creation Story

effects of the Great East Japan Earthquake and otherfactors, and we were proceeding with large-scale
structural reforms and new growth strategies at the sametime. Despite the difficult business environment, weinvested in R&D to strengthen our development
capabilities, which are the seeds of sustainable growth.
With regard to work styles, we launched a project called
the New Normal Project led by young employees andestablished an operations center to implement reforms inwork styles, and were among the first to introduce theabolition of uniforms, a flextime system, an open plansystem, remote meetings, and other measures. Thanks
to these efforts, a teleworking system was almost fully inplace at the onset of the COVID-19 pandemic, enabling
us to minimize disruptions to conducting work due to thespread of the infection.
I have the impression that Toyoda Gosei has a nononsense corporate culture and a DNA of steadily
accumulating runs through hits rather than trying to slug
one-hit home runs. This culture is quite similar to Sanken
Electric, and has both good and bad points at times. For
example, when major changes or decisions need to bemade, there is hesitation. I think one major role of an
outside director is to give a push to management when it
is in doubt. On the other hand, this position has theimportant role of supervising management execution,and I think there are things that the execution side does
not want to be known or, if possible, does not want tosay. Having been in the execution position in Sanken
Electric, I understand that well, but in order to overcome
difficult issues, it is essential to build a relationship of trust
and a sense of unity, and communication is the only way
to achieve this. I hope to be in a position where I canconsult with the corporate officers and everyone on site
about any doubts they may have as they share
information with me. I have experienced a number of
tough management decisions in an industry different
from Toyoda Gosei, and I have no vested interest, so I
hope that my experience will be of some help.

Strengthening crisis management toremain a company of integrity
Yokoi: My career is completely different from Mr. Wada. I
became a reporter for the Asahi Shimbun in 1978 andhave been at the forefront of the media world ever since.

Value Creation Strategy

Foundation of Value Creation

Data

When I was a correspondent in New York, I encountered
the Tylenol Incident, in which a lethal drug was mixed intoa fever medicine and several people who took it died. Itis considered the gold standard of risk management.
When I analyzed the company’s response in my ownway, I found two key points. The first was that thecompany’s credo clearly prioritized its stakeholders, with
the number one priority being the customer, or end user.
Another was the overwhelming speed with which thecompany responded to prevent the damage fromspreading. They were able to make quick decisions
because they were completely unwavering in their basic
principles of what the company valued most.
Later, as head of the society department and editorial
bureau of the Asahi Shimbun’s Tokyo headquarters, I
was in a position to uncover a series of suspected casesthat led to corporate fraud and a political administration
change. On the other hand, as a media outlet
representing Japan, I was often denounced by society
and other media outlets, and I experienced five press
conferences to explain and apologize for my reporting,and I learned firsthand that if you do not act with integrity
and speed when something goes wrong, it can be fatal.
Based on this experience, the first thing I did when I
became president of Nagoya Broadcasting Network was
to create a crisis management team of three elite
department heads in order to rebuild a crisis
management system. I also reviewed the regulations
pertaining to internal controls to ensure that we do not
betray the trust of viewers, which is the most importantfactor in the media.
As an outside Audit & Supervisory Board member for
Toyoda Gosei, one of the things I must fulfill is to help
with crisis management. Toyoda Gosei is a sincere
company and has probably had very few crises that haveshaken its management. I would like to help create asystem that, when an emergency occurs, concentrates
information and makes decisions immediately based on
the principle of what we should protect.
The next area in which I would like to help is with internal
regulations. Internal regulations, especially those related
to internal controls, show what the organization values
most. Toyoda Gosei is a B to B company, so in the past,
we may have been oriented toward automobile
manufacturers, our direct customers, but as Toyoda
Gosei expands its business domains in the future, it willT OYODA GOSEI REP OR T 20 2379

Governancebe necessary to let end users and the rest of the world
know what the company values and to have themrecognize the value in its existence. I would like to utilize
my experience in the media to assist in this regard.

Chapter 2:
A corporate culture that welcomes diverse
opinions from outside officers
Wada: Toyoda Gosei’s Board of Directors has been very
good in that it takes the time to provide us, the outsideofficers, with a thorough explanation in advance and thatthe business divisions and people on the front lines
provide us with a lot of information. I believe that in thefuture, as our understanding of each of our businesses
progresses, we will build up to full-fledged discussions atboard meetings. We are also provided with opportunities
to have specific topics for outside officers explained tous, so we are beginning to share a common
understanding of issues based on our respective skills
and areas of expertise.
Yokoi: As Mr. Wada mentioned earlier, our role is toencourage while closely monitoring execution. We do notwant to give rubber-stamp approval, but rather want toprovide support while discerning the direction that should
be taken in the future. To do this, it is of utmost
importance to stimulate discussion at board meetings.
This is not an easy task, but the chairperson encourages
attendees to speak up, and is working to ensure that thepresident and others on the executive side have anappropriate sense of urgency. The effectiveness of theBoard of Directors has been further enhanced by diverse
viewpoints and active discussions, and this is a very
positive step in the right direction.
Wada: In this era of VUCA (volatility, uncertainty,complexity, and ambiguity), various structural changes
are taking place, and the automobile industry isundergoing a once-in-a-century transformation. This is
an important period of change for the company, and it
would be a good idea to add speed and challenge above
all else to the values of our employees. If each and every
employee of the Toyoda Gosei Group can take a step
forward with the mindset of not being afraid of failure,
speeding up, taking on challenges, and never giving up,
we will be closer to achieving the 2030 Business Plan.
Yokoi: The expectations of the times and of society for
Toyoda Gosei have been gradually changing. Is it reallyenough for us to continue with our past approach ofprofessionalism, which is to perfectly complete the work
we have been contracted to do? In order to venture into
new business areas, it is necessary to have a corporate
culture that matches the new business areas. In his
presentation of the 2030 Business Plan, company
president Saito spoke passionately about his attachment
to rubber and plastics, the roots of the Company’sbusiness, and he linked their chemical structures toorganization theory through the term “polymers.” He also
expressed his strong commitment to change thiscompany through his specialty, which is humanresources. I felt that Mr. Saito has become the president
at the right time.
From now on, we must actively communicate to not only
shareholders, employees, and business partners, butalso to the wider public so that they feel that they canentrust their lives to this company because of its
products, they can join this company and trust that it willtake their lives on the right path, or they want to form analliance with this company.
Wada: Toyoda Gosei is a Toyota Group company inwhich Toyota Motor Corporation holds more than 40% of
the shares and accounts for more than half of its sales.
This fact remains unchanged, so it is absolutely
necessary for us to grow by leveraging the strengths of80

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Datathe Group. Conversely, if the concentric circles of theGroup are broken up when the Toyota Group implements
its once-in-a-century transformation and competes withautomakers around the world, the Japanese auto
industry will be weakened, and so I believe that now is
the time to focus on Group growth.
However, looking ahead, we should consider creating theseeds for Toyoda Gosei to grow as an individual and to
put its growth on track. We must aim for growth throughour own creativity and power, rather than leaving it toothers. It is the role of outside officers such as myself tooffer our opinions and push them forward.

Chapter 3:
Achieving the 2030 Business Plan
Wada: In the 2030 Business Plan, we set managementtargets of 1.2 trillion yen in sales revenue and 100 billion
yen in operating profit, but investors will judge whether
these targets are large or small. As a manufacturer,
Toyoda Gosei’s first major goal is to generate profits fromits products and to create value for society by ensuringthat customers and end-users also value the quality of its
products. Since it is our employees who actually createthat value, it is most important that our goals areincorporated into each of our business divisions and thateach and every employee is able to understand thesegoals and link them to action. In addition, we must also
evaluate whether or not the resources for those actions
is sufficient.
The other day, I told the president that we should
visualize the skill map of the entire human capital andquickly evaluate which skills are lacking and which are
too much. Only then can we create an effective training
plan for individual personnel, and thus set targets forenhancing the workforce. Without such an assessment,
the company will only be able to take partial measures,such as hiring mid-career workers due to a lack ofexpertise in a certain area, and it is difficult to succeed
this way. The same is true for women’s advancement.
The objective is not to create female section managers
for the target of 100 female managers in Toyoda Gosei inJapan, but rather to quickly incorporate women’s thinking
into management. It is important to think about how to
first develop section managers, and from there, develop
them into division managers and corporate officers. This

will also require an inventory of employee skills. It is
important to approach essential issues with a firm graspof the overall picture.
Yokoi: Medium- to long-term management plans have
two objectives. One is to provide a specific itinerary forgrowth, and the other is to share the goal of what kind ofcompany it will be in the future with its stakeholders. The
plan works well in terms of visualizing the goals. It makes
clear management’s will to be this kind of company. The
plan is not about abstract compliance, but rather it is a
declaration of what we will follow and what we willcomply with. We have demonstrated the first step in thisdirection.
Toyoda Gosei is a company that will grow through thepursuit of safety and comfort. With regard to carbon
neutrality, we will not only prevent harm from being doneto the environment but also make it our corporate
mission to do business with a focus on decarbonization.
In other words, we are a company that brings together
the future dreams of its stakeholders. I have great
expectations for this vision.
Wada: That’s right. As a corporate group that createssocial value in line with the times and delivers it in a timely
manner, I would like to do my utmost to support Toyoda
Gosei’s strategies and challenges so that ourstakeholders will support us.

T OYODA GOSEI REP OR T 20 2381