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Corporate Governance
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TOYOTA INDUSTRIES CORPORATION

Toyota Industries Corporation is determined to act withinauditors, including two standing auditors. The corporate

both the letter and the spirit of the law, in Japan andauditors, appointed at the general meeting ofoverseas. It seeks to pursue its business activities in a fairshareholders, conduct an operations audit as well as anmanner, and to do so in a transparent way. In accordance

accounting audit. For this purpose, the auditors arewith this principle, we attempt to provide the highest

granted a great deal of authority. In the operations audit,

possible levels of disclosure and accountability tothey investigate whether ordinances and articles ofshareholders and others concerned.

incorporation are being observed in the execution of theWe have adopted the divisional organization system; asduties of the directors. In order to prevent illegal or

ANNUAL REPORT 2001

a rule, the day-to-day operations of each business have

improper resolutions from being made at the Board

been entrusted to the authority of the division manager.

meeting, the auditors attend the meeting and are able toMatters concerning strategic decision-making and thegive their opinions if necessary. If any violation of anestablishment of divisional and company-wide businessordinance or articles of incorporation is made by agoals are discussed and decided in the management

director or the prospect of such a violation is identified,committees and meetings described below. Necessary

it is reported to the Board of Directors.

issues, when appropriate, are presented and discussed atmeetings of the Board of Directors.

Board of Directors
The Board of Directors, the highest body for making
corporate decisions related to business and affairs

In the accounting audit, the consistency of theaccounting auditor’s auditing method and results isassessed. If the accounting auditor’s auditing method orresults are identified as inconsistent, the auditors include
the matter and the reason for it in the audit report.

throughout the entire operation, is composed of 32

Management Committee

members, including corporate auditors. The Board ofThe Management Committee deliberates upon important

Directors makes decisions about important mattersmatters concerning all aspects of management. The

concerning corporate management, except for thoseCommittee is composed of most of the directors andmatters that come within the authority of the generalstanding auditors. It is chaired by the President.

meeting of shareholders. The Board is chaired by either

Necessary issues are presented to the Board of Directors

the Chairman or the President. The Board deliberates

for discussion and decision.

upon matters specified in commercial law, articles ofincorporation and regulations of the Board of Directors.
Meetings are held once a month as a rule.

Expanded Executive Vice President’s
Committee
As a rule, the Expanded Executive Vice President’s

Board of Auditors

Committee, composed of the eight directors at and above

The Board of Auditors is composed of four corporate

the level of Senior Managing Director, deliberates uponthe company’s important management issues such as
business operations, new products, overseas matters,

Toyota Industries’ Basic Philosophyand IT. The Committee is chaired by the President.
Compared to the Management Committee and others,
the Expanded Executive Vice President’s Committee
can deliberate with relatively few members, allowing
swift, flexible and rapid decision-making. Necessary
issues are presented to the Board of Directors fordiscussion and decision.

Divisional System and In-House
Company System
In order to respond rapidly to changes in the businessenvironment, the divisional system organization wasadopted in 1971. Based on the divisional system,
vehicle, engine, car air-conditioning compressor, textile
machinery and electronics businesses. Also,
operational management authority has been vested in

Respect for Others
Toyota Industries is respectful of the people, culture and tradition ofeach country and region in which it operates. It also works topromote economic growth and prosperity in those countries.
Respect for the Natural Environment
Toyota Industries believes that economic growth and conservation of
the natural environment are compatible. It strives to offer products
and services that are clean, safe and of high quality.
Respect for Customers
Toyota Industries conducts intensive product research and forwardlooking development activities to create new value for its customers.
Respect for Employees
Toyota Industries nurtures the inventiveness and other abilities of its
employees. It seeks to create a climate of cooperation, so that
employees and the company can realize their full potential.

division managers, who have responsibility for theirdivisions’ sales volume, profits and losses. Because
management responsibility has been clarified, rapid

Department, the Personnel Affairs and Labor Relations

decision-making is possible, which has contributed to

Department, and the Corporate Audit Office, among

the improvement and expansion of businessothers. It also conducts regular checks of eachperformance.

department and promotes educational activities.

from Toyota Motor Corporation, an in-house company
system was established for the Industrial Vehicle
Division and Materials Handling System Division, andwe created an “in-house company,” TOYOTA Material
Handling Company, in April 2001. The purpose of thisarrangement is to give TOYOTA Material Handling
Company a greater degree of autonomy than otherdivisions. If this “in-house company” system proves
successful in terms of net sales, operating income,return on assets (ROA) and cash flows, we willconsider extending it to other divisions.

Corporate Code of Conduct Council

Goals and Objectives Management
Each fiscal year, the President sets corporate objectives
and business targets for each division. In order toattain these targets and objectives, action items arebroken down, clarified and expanded not only at thedepartmental and group level, but also at theindividual level. According to this fiscal-year goals andobjectives management system, corporate targets,business objectives and action items penetrate all theway to the bottom of the organization, and fiscal-year
corporate goals and business objectives can beattained. Thanks to the system, goals, objectives andaction items become clear at the individual level.
Furthermore, in April 2001, the new assessment/In 1991, we established a Code of Conduct Council for

remuneration system for white-collar employees

the purpose of promoting awareness of ethical, legal,

below the level of senior staff was revised. Goals andsocial and environmental issues. The Council isobjectives management has become closely tied to ourchaired by a Senior Managing Director. In 1998, theobjective attainment assessment, the backbone ofCouncil published a guide for employees containing

which is the new assessment/remuneration system,

specific guidelines on good conduct.

and interrelated with the salary of all white-collar

The Council liaises closely with the Legalemployees.

ANNUAL REPORT 2001Taking advantage of the opportunity presented by
the transfer of the industrial equipment sales division

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TOYOTA INDUSTRIES CORPORATION

diversification has been proceeding efficiently in theRespect for the Law
Toyota Industries is determined to comply with the letter and thespirit of the law, in Japan and overseas, and to be fair and transparent
in all its dealings.