Introduction

GovernancePursuing sound governanceEngage in corporate management that meets societal needs and has
a lasting positive reputation for value● Instill a healthy corporate culture and business practices

Top Message

VisionStrategy

shareholders, and to hear reports on the status of businessexecution. Outside directors attend Board meetings, where they
actively exchange opinions, and monitor and supervise
management. The Board of Directors also receives regular reports
on important management risks debated in the Executive
Committee and the Sustainability Committee, supervises risk

Materiality

Close-up

GovernanceDatamanagement and assesses its effectiveness.
The Nomination & Compensation Committee, which acts as
an advisory body to the Board of Directors, met twice in fiscal
2023 to discuss executive candidates, executive compensation
policies, and the amount of executive compensation, and to give
advice, recommendations, and reports to the Board of Directors.

●

Challenge

Governance structure (As of March 27, 2024)
General Meeting of Shareholders (annually)

Deepening understanding of our corporate philosophy among
executives and employees● Regular dialogue with shareholders and investors● Improving awareness of the Toyo Tire Group Charter of Corporate
Behavior and Code of Conduct

Audit & Supervisory Board (once a month in principle)●

Initiatives

Members: 5 Audit & Supervisory Board members(including 3 outside members)

Board of Directors (monthly)
Members: 8 directors (including 4 outside directors)

Nomination & Compensation Committee (twice a year)
Members: 6 directors(including 4 outside directors)

Executive Committee (twice a month)
Special committees

Our policy

We practice the ideals set forth in our Company Philosophy, Mission, Vision, and Fundamental Values, which together make up
our philosophy framework. In order to meet the expectations of our stakeholders and improve our corporate value, we seek to ensure
management transparency and efficiency, work to maintain and build appropriate management systems, and endeavor to further
strengthen our corporate governance, internal control systems, and compliance.
As part of our efforts to strengthen compliance, which we consider to be the essential element that embodies our philosophy, weestablished the Toyo Tire Group Charter of Corporate Behavior as a set of common principles to help all Group companies conduct
sincere business activities. We also formulated the Toyo Tire Group Code of Conduct to assist all executives and employees in
implementing the Charter of Corporate Behavior, and seek to instill that code across the whole Group. The Charter of Corporate
Behavior and the Code of Conduct are reviewed when appropriate and any necessary revisions are resolved upon by the Board of
Directors.

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TOYO TIRE Integrated Report 2024

Deliberates important issues related to R&D (strengthening of our core competence
technologies, that are our platform technology and leading technology, to realize theGroup’s management vision and medium-term business plans, as well as important
issues relating to technology in general

Conducts discussions and examinations to promote, enhance and strengthen compliancewithin the Group

Quality Assurance Committee (quarterly)

Crisis Management Committee (quarterly)

Establishes our policies and measures to promote and operate Group-wide quality
assurance system. Discuss countermeasures if a serious quality issue arises toimplement policies, measures and responses for each department, primarily
centered around the quality assurance departments

Deliberates the planning of measures and management against crisis

The Toyo Tire Group practices the principles of Japan’s Corporate Governance Code in an appropriate fashion to ensure
effective corporate governance. We seek to ensure the rights and equal treatment of shareholders and to appropriately
cooperate and engage in dialogue with our other stakeholders. We strive to make appropriate information disclosure andensure transparency to help achieve those aims. The Board of Directors is accountable to the Company’s shareholders
and, as such, strives to appropriately execute its roles and responsibilities in order to enhance profitability and capitalefficiency and, by extension, achieve the Company’s sustainable growth and increase corporate value over the medium tolong term.

Our corporate governance system consists of the Board of
Directors, which is responsible for decision-making andsupervisory functions, and, under that, the Nomination &Compensation Committee, which acts as an advisory body to theBoard of Directors on personnel affairs, compensation and othermatters pertaining to directors.
We also have an Executive Committee that makes decisions
on business execution, various special committees that deliberateand consult on individual fields, and an Audit & Supervisory

Technology Committee (monthly)

Discusses important matters related to the sustainability across the Group as well as
policies and strategies for strengthening and promoting sustainability management

Compliance Committee (quarterly)Sound governance

Governance structure

Sustainability Committee (quarterly)

Board, a body that audits the Board of Directors and theexecution of directors’ duties. This system enables all thesefunctions to be fully exercised.
The Board of Directors meets, in principle, once a month tosupervise the execution of duties by directors and decide
important matters, including the appointment of the representative
director and executive directors, determination of basic
management policies, approval of important investment plans,
determination or approval of the convening of general meetings ofshareholders, agenda items to be presented and the proposals
and documents to be submitted (including financial statements
and supplementary statements) at the general meeting of

Organization & Personnel Committee (quarterly)

Investment & Credit Committee (twice a month)

Deliberates important issues related human resources

Deliberates investments and credit related to business activities

Governance overview• Organizational format

Company with an
Audit & Supervisory
Board• Directors

8• (female directors:

1)• (outside directors: 4)• Audit & Supervisory
Board members• (outside members

53)• Independent officers(including Audit &Supervisory Board
members)7• Number of Board of
Directors’ meetings(FY2023)

17• Attendance of outside
directors at Board
meetings (FY2023)

100%

Appropriate composition of Board of Directors
In our medium-term business plan, we have set the goal ofbolstering our ability to flexibly respond to changes, and we areworking to achieve this goal through the coordination of all ourfunctions on a global scale. In our value creation processes too,
we recognize that our strength lies in inter-functional collaborationin business processes, and plan to achieve outputs andoutcomes through our business activities. We believe that the
governance structure to achieve such outputs and outcomesrequires members of the Board of Directors to have knowledge
and experience of “corporate management,” “finance andaccounting,” and “legal and risk management.” We have therefore
positioned these areas of expertise as core qualities for ensuring
the effectiveness of management oversight and decision-making
functions. Moreover, in order to deepen discussions on growthstrategies, we have worked to ensure that the Board of Directors
is well balanced overall, by appointing one or more persons withexpert knowledge and experience in the areas of “sales andmarketing,” “research and development,” “manufacturing andquality assurance,” “experience outside Japan,” “digitaltransformation,” and “sustainability.”→ See p.70 for details of skill matrix.

Assessing the effectiveness of the Board
As part of our effort to promote sustainable growth and improve corporate value in the medium to long term, we have been conducting anannual analysis and assessment of the operation, composition and activities of the Board of Directors since 2017, with the aim of improving
the Board’s functionality. In order to ensure fairness, we use a third-party body to aggregate and evaluate survey results.

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Introduction

Governance

The main changes made this year are the assessment criteria. In previous years, the key focus areas were the composition and operation of
the Board and the substantiveness of the discussions at Board meetings. This year, we have added questions related to sustainability, a newperspective required to ensure sound corporate governance.

Overview of assessment
Assessment
subject

Self-assessment by directors and auditors, withthird-party evaluation

Methodology

Questionnaire (18 questions)

Questionnaire
designFive-point scale scoring with comment field foreach question

Assessment
criteria① Composition and operation of Board of Directors→ Board size, composition, operational status, quality of
information provided, etc.
② Management strategy & management planning→ Discussions during the development stage, decision-making on
strategic directions, level of contribution, etc.
③ Risk management→ Oversight of management, sustainability actions based on risks
and opportunities, etc.
④ Overall assessment

Assessment process
Previous Aroundyear December
This year

VisionStrategy

Materiality

Close-up

Governance

Data

Engaging in dialogue with shareholders and investors
Toyo Tire Corporation holds an annual general meeting ofshareholders, and quarterly financial results briefings. Top
management conveys its opinions on performance trends,
business environments and future outlook for the Group to
institutional investors and securities analysts when we announce
interim and full-year business results. In addition to these
activities, we also seek to promote understanding of Groupstrategy by creating multiple opportunities for the company
president and other senior executives to engage in a dialogue on
the issues that interest institutional investors and securities
analysts, and providing quarterly opportunities (individualinterviews) for investors to communicate and ask questions of IR
staff. We also respond proactively to dialogue requests frominstitutional investors around the world either in the form ofindividual interviews or conferences. In 2023, senior executives
engaged with investors through small meetings on 10 occasions(89 attendees from 82 institutions) and IR staff handled 348
interviews for shareholders and investors from 231 institutions.
Our Shareholder Relations (SR) staff continues to engage indialogue with shareholders, including institutional investors inJapan, focusing on topics such as our governance structure andsustainability initiatives. Opinions and requests obtained throughsuch dialogue are promptly fed back to the company, leading to
improvements, such as the enhancement of disclosed
information.

Progress in governance
Review Review assessment methodology

Early
February

Survey Survey directors and auditors

Early
March

Analysis

Late
March

Report to Board of Directors and consider
Reportnext course of action

Aggregation and feedback of evaluation
results by third-party body

We have been strengthening our corporate governance system
on an ongoing basis. We will continue reviewing our governancearrangements based on the results of the annual effectivenessassessments and take the necessary measures to improve theeffectiveness of the Board of Directors.

Governance system

Overview of FY2023 assessment results andnext course of action
Most of the assessment results have been positive, andimprovements have been made in areas where issues were raisedin the last year, which suggest that the Board of Directors as awhole is functioning effectively. The third-party evaluation has also
confirmed that our Board of Directors is functioning properly ingeneral, and that it is structured in a way that assures effectiveness.
Among the assessment criteria, management supervision was
once again highly evaluated. Since improvements have also been
made to issues, we believe that the effectiveness of the Board of
Directors as a whole has been ensured.
Improving the quality and timing of information provision toensure time to review information before meetings is an ongoingissue. While we received positive feedback on the quality of theinformation we provide in response to the improvements we madeto optimize the volume of information, we believe that further
improvements are necessary, including further enhancements to
information. With regard to the timing of information provision,
although we make sure we distribute materials in advance, we willconsider distributing materials even earlier and will review themechanism we use to provide information, so that we can provide it
as quickly as possible and ensure Board members have sufficient
time to consider important matters before meetings.
With regard to the newly added questions on sustainability
initiatives, our current initiatives and stance were positively
evaluated, to some extent. However, we recognize the need tointegrate initiatives for a number of topics into our business andinstill them throughout the organization. We will expand
opportunities for deliberation at Board meetings and consider
appropriate responses while keeping a close eye on trends aroundthe world.

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Top Message

TOYO TIRE Integrated Report 2024

• Chairperson of the Board of
Directors appointed(separation of chair from CEO)• Nomination & Compensation
Committee established as avoluntary advisory body to theBoard of Directors, with external
officers being the majority• Independent outside directors
increased (from 2 to 3, making
up over 1/3 of the Board)• Executive reporting enhanced(more discussions from mediumto long-term perspective)• Rules of the Board of Directors
revised (transfer of powers)• Independent outside directors
increased (from 3 to 4)• Set female directors

Management/executive

2017• Mid-Term Plan ’17 drawn up• Business transfers and other“select and focus” strategies
pursued2018• Capital and business alliance
formed with Mitsubishi
Corporation

Company-wide risk management system
Our policy
We will manage any risks that might affect the Group’s business activities on a company-wide basis through our basic
approach set out in the Risk Management Policy and Risk Management Rules. We will thus strive to promote sustainablegrowth, uphold our corporate value and fulfil our responsibilities to our stakeholders.

Organizational responsibilities (April 2024)
Executive Committee
Crisis Management Committee

Special Committees

Risk Management Secretariat

2019(General Affairs Dept., Corporate Infrastructure Division,
Corporate Administration Dept., Corporate Administration Division)• Trade name changed• Growth strategy developed
based on capital and businessalliance

Each Headquarters / Subsidiaries

2020

Risk management initiatives
2021• Mid-Term Plan ’21 drawn up• Sustainability Committee
established2022• Sustainability management
policy made public2023

The risks that are expected to have an impact on the Group’sbusiness activities are managed by the organization function or
meeting body responsible for each risk. We recognize that, as theGroup’s business activities and supply chain expand globally, awide variety of risks become more intricately linked and complex.
For that reason, in 2023, we decided to restructure our companywide risk management system to enable us to position risks thatwould have a significant impact on management if they were tooccur or materialize as “significant risks,” and prioritize the formingof concentrated and strategic measures to counter these risks.
For example, the Corporate Headquarters identifies risks
associated with climate change and human rights risks in all ourbusiness activities, including our supply chain, and assesses theirsignificance, formulates countermeasures in cooperation with
relevant divisions and reports on such activities to the
Sustainability Committee. The Crisis Management Committee,
which oversees company-wide risk management, investigates andconfirms the effectiveness of the risk management activities
conducted by various special committees and organizational
functions within the Company, including any measures taken tocounter the above-mentioned type of ESG risks, on a quarterly
basis. The Crisis Management Committee regularly reports theresults of its investigations to the Executive Committee and theBoard of Directors.
Material risks will be reviewed when deemed necessary in lightof changes in the external environment and the Group’s businessenvironment.
Significant risks• Risk of wind, snow or water-

related disaster• Risk of earthquake, volcanic
eruption or tsunami• Risk of supply chain disruption• Risk of information system
failure• Risk of infectious disease• Risk of contingent liability related to
product compensation• Risk of changes in the consumer
market• Risk of changes in the competitiveenvironment• Risk of climate change• Human rights risks in the supply chain

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Introduction

GovernanceTop Message

VisionStrategy

Materiality

Close-up

Governance

Data

Message from the Chairman
Compliance

Board of Directors’ role inadding a medium- to long-term
perspective

Our policy
We ensure that all executives and employees within the Group prioritize compliance in their day-to-day operations.

Organizational responsibilities

Report/Consult

Instruct/Order

ReportReportCompliance Officer (CO)Instruct/Order

CCO: Investigates, gives instructions and orders (including thesuspension of operations and shipments, etc.) and makessuggestions on compliance matters for the entire Group
CO: Investigates, gives instructions and orders (including suspensionof operations and shipments, etc.) and makes suggestions oncompliance matters in their department
CL: Assists COs and reports to department managers and COs upon
becoming aware of a compliance incident when promoting
compliance activities in the workplace

Consultation Counter to Comply
Antimonopoly Law

ReportCompliance
Leader (CL)Instruct/Order

Internal Reporting System
Reporting Hotline

ReportHarassment Hotline

Report/Consult

Whistle-blowing/Consult

Employees

Instilling the Group Charter of Corporate Behavior andCode of Conduct
We instill awareness in each and every Group employee and work
to strengthen compliance by creating the Global Code of Conduct
Handbook (available in ten languages: Japanese, English, Russian,German, Italian, Chinese, Thai, Malay, Portuguese and Serbian) as
a guide for putting the Toyo Tire Group Charter of Corporate

Behavior and the Toyo Tire Group Code of Conduct in practice.
In Japan, we conduct read-along training sessions for all
executives and employees, including Group companies, of theCode of Conduct Handbook or the Supplementary Reader withfamiliar and specific examples for manufacturing or sales sites.
Upon completing the training, each participant submits a written
pledge to promote compliance.

Conducting compliance awareness surveys

Whistleblowing system

We conduct annual compliance awareness surveys to ascertain
the degree of compliance-related awareness among employees
and aid our future endeavors.

The Toyo Tire Group has been operating a whistleblowing systemsince 2006. As part of the system, we have established a hotline
mechanism for employees to directly report or seek advice oncompliance matters and other concerns that they fear could
develop into a crisis event. The hotline can be accessed throughmultiple channels and accepts anonymous reporting from both
inside and outside the company so that necessary information
can be conveyed easily and smoothly to governance bodies. To
detect and solve harassment incidents in the workplace at an
early stage, we have set up harassment advice desks for
employees and assigned counselors at each of our business sites
in Japan. We have also set up a customer service center andweb-based inquiry form for consumers, local communities, andother members of the general public.

2023 compliance awareness survey results
Implementing activities to promote compliance

Made one or more attempts to raise complianceawareness over the past year

Response rate

89.9%(2022: 89.4%)

94%(2022: 94%)

Degree of compliance awareness and understanding

Understand what compliance means* Toyo Tire compliance: Instead of simply adhering to laws andregulations, we must comply with laws, regulations and internal
rules, and be guided in our actions by a keen sense of ethics.

89%(2022: 88%)

Degree of embedding of compliance

Remain conscious of compliance when
conducting own work activities

63

Report/Consult

ReportHeads oforganizational units

Outside specialized body

We set up the Compliance Committee as one of the special committees under the jurisdiction of the Executive Committee to consult andinvestigate ways to promote compliance. The Chief Compliance Officer (CCO), compliance officers (CO) and compliance leaders (CL) play a
key role in promoting compliance under our compliance officer system.
The Compliance Committee, chaired by the CCO
The Compliance Department provides support at all stages so that the system functions properly and effectively.
appointed by the Board of Directors, meets quarterly inCompliance Committee
principle, and reports the results of its discussions
Board of Directors
Audit &
Chair: CCO (Compliance & Legal Division Manager)
twice a year to the Executive Committee, which isSupervisory
Members: COs
President & CEO
Director
Board Member
Observers: Directors and Audit & Supervisory Board
supervised by the Board of Directors. The status ofmembers
Secretariat: Compliance Dept.
activities to promote compliance is also reported to theReportAppoint
ReportReportAppoint
Board of Directors as appropriate.
Chief Compliance Officer (CCO)

TOYO TIRE Integrated Report 2024

94%

(2022: 94%)

Yasuhiro Yamada
Chairman of the Board

The fiscal 2023 annual results far exceeded the initial plan, withboth net sales and operating income hitting record highs. These
results were the output of our value creation process, which was
generated by our officers and employees following the rightstrategy and working to the best of their ability to implement it.
The higher level of operating cash flow resulting from thisachievement will generate future investments into the Company’s
growth and higher investor returns, and it is proof that our earning
power is growing.
I define the Board of Directors as a body that oversees andadvises the Company by applying the unique perspectives andabilities of its members and, ultimately, acts as a manager tasked
with generating long-term value for shareholders and stakeholders
to make the Company globally competitive. It often seems almost
inevitable that companies, under pressures from the capital andconsumer markets and faced with the need to meet the level ofdiscipline as high as that required in the US and Europe, become
obsessed with annual results. In order to avoid a myopic focus onshort-term results in visible aspects, the Board of Directors is
required to assume the role of being the force that guides theCompany to create value from a medium- to long-term
perspective. To fulfill this function, the Board must do more thansimply taking the outward form required by the code. It must
embody within it an intrinsic culture that can be formed only when
it runs on two wheels working together: the quality of outside
directors and their sense of responsibility on one side, and thecommitment of the executive officers on the other.
All of our outside directors are unafraid to voice their opinions
while respecting the sincerity of the executives’ argument. The
executives on the other hand have built a positive attitude, willingto take on board the comments and advice of outside directors
and make further improvements. In other words, we are beginningto see cooperative dynamics emerge from uncompromising
discussions and meaningful interactions between the outside
directors and executives at board meetings. These meetings truly
are our monthly sword fights. It may still be work in progress, but I
can really see that our Board of Directors is beginning to develop
a robust culture and am proud of this achievement.
In addition to agenda items to discuss, the Board of Directors
has made executive reporting a regular feature, where members
are able to share issues on the factory floor as well as ideas forpotential future technologies, and review plans and reasonings forlaunching value-added products in different markets. Business
management and executive reporting also focus regularly onother themes around issues and policies that are important in themedium to long term, such as digital transformation, human rights
and decarbonization. Our outside directors have a wealth ofexpert knowledge and experience in different fields and do nothesitate to offer substantial and constructive comments, providing
deep insights and panoramic perspectives. It takes aconsiderable amount of energy for the executive members to facesuch questioning, but in terms of governance, this is a healthy
exercise that prevents the Company’s management frombecoming complacent or oblivious to the common sense of theoutside world.
In order to enable these uncompromising interactions to takeplace and suggestions and ideas gained from them to beincorporated into operations, the effectiveness of the Board of
Directors must be guaranteed. Although the evaluation of board
effectiveness tends to become all about improving indicatorscores, I believe that the more important point is whether or not
the management of the Company is based on identifying issues inboard discussions and making improvements. It is only natural foran asymmetry of information to exist between outside directors
and executive members. In order to enable discussions to takeplace on an equal footing, the executive side is working to fill theinformation gap and will proactively continue this effort andimprove the quality of information.
The next year is the final year of Medium-Term ’21 Plan. In
order to raise our baseline performance level, it is important not to
obsess over external factors, whether good or bad, and focus on
how we manage internal challenges. In the meantime, theexecutives have already started reviewing and drafting the outlineof the next medium-term plan. The Board of Directors will, as amanager that oversees and advises the Company and generates
long-term value, also be involved in the development of the plan
as a responsible manager with a good understanding of theCompany’s medium-term issues, advising on the appropriatenessof policies, strategies and resource allocations as required. I willcontinue doing my best to improve the quality of the Company’s
governance in order to increase its corporate value.

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Introduction

GovernanceTop Message

VisionStrategy

Materiality

Close-up

Governance

Data

Messages from the Outside Directors

In fiscal 2023, we achieved the business plan with the highest
profit ever, albeit, we must admit, with the help of some external
factors. The purpose of a business plan is to set out a clear andunambiguous policy direction that shows what the company
wants to be and to put forward the technology development,
production capacity and sales strategy needed to achieve thevision while looking squarely at the company’s actual ability. In ourcase, however, the correlation between the target figures and theactual ability seems rather tenuous, which means it is not veryclear how we managed to achieve these figures.
A company blindly chasing numbers can lose sight of whattruly matters as the social conditions change around it, so I hopethat the next medium-term plan will include a more concrete setof figures based on a clear vision as well as a thorough analysis of
the actual state of the Company, and that a business strategy will
be developed to achieve those targets.
Firstly, a key consideration in technology development is thelinking of elemental technologies to technologies forcommercialization. For a manufacturer, everything starts from a
medium- to long-term development road map that interlock thetwo together and a product strategy that makes the best use of
the technological seeds we have.
The role of technology development is to contribute to the
future of the company while addressing today’s challenges. Those
who are engaged in this mission must have a mindset thatenables them to pursue the quest to the end. In the developmentof elemental technologies, in particular, it is not good to be too
preoccupied with getting results in the individual tasks in front of
you if that means you just give up when you fail. What the people
working in development need is stubborn perseverance and thedetermination to keep trying no matter what. For the
management, the most important thing is to allow the R&D teams
to keep on dreaming, and this requires patience and commitment.
It is often the case that a technology that does not seem
immediately useful may still sow many seeds of othertechnologies in the development process. It is the companies thatkeep trying until these seeds grow, blossom and bear fruits thatfind new paths to success and win out. I believe that theconviction and commitment to see the process through will give
the Company flexibility to respond to the future we are yet to see.

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TOYO TIRE Integrated Report 2024

Honest planning, strategic
investment, and stubborn
determination

Lead toward the future byasking questions

Ken Morita

Atsushi Takeda

Outside Director

Outside Director

The same principle applies to production, where the key is tohave a production plan based on the reality of the actual
production capacity. Instead of simply using the estimatedmaximum plant capacity, the plan must take honest account ofpossible negative factors that may occur; otherwise, targets may
be missed, and that can affect the morale of frontline workers. In
manufacturing, every problem, from material supplies and facility
maintenance to changeover losses and the number and standardof operators, translates straight to the output. Therefore, the mostimportant prerequisite is to consider all risk factors and develop a
production plan that allows sufficient leeway.
Another issue I would like to highlight is system development
for digital transformation, to which the Company has been
spending a considerable amount of money and time. As timegoes by, however, approach to these things change, and so does
the world in which we operate. Rather than aiming to create aperfect system at the first go, it may be necessary to accept acompromise and be willing to improve the system while using it.
The key is to complete a system that is simple, uncomplicatedand flexible without delay. One of the basic rules of management
is not to waste resources such as time and money, and byfollowing this rule and setting up a system quickly, the team will
get a sense of achievement and be able to enjoy the result, which
will energize the organization.
In everything from the core functions such as technology,
production and sales to more novel requirements of our times
such as digital transformation and ESG, it is critically importantthat the Company draws up implementation plans that are basedon its management philosophy and vision and yet rooted firmly inreality, and choose where to invest the resources it has earned
from a medium- to long-term perspective. I look forward to seeing
the quality of the Company’s management continue to improve.

Some say that the good fiscal 2023 results came with the help offavorable external factors, but my take is more positive; other thanexchange gains, even those helpful factors such material
procurement costs and sea freight and other delivery costs wereobtained through careful negotiations with our suppliers and were
therefore the fruit of the Company’s own efforts. Also, themarketing strategy that saw an expansion of channels in the
North American market and increase in high value-added productsales contributed significantly to the results. These low-key but
persistent efforts all added up to offset the increased start-up
costs of the Serbia Factory and the unstable operations of the
U.S. plant. I believe, therefore, that the best ever performance wehave recorded in the Company’s history has been won by thecollective strength of the Company.
We have already achieved most of the Medium-Term ’21
Plan’s quantitative targets ahead of schedule, but slip-ups happen
when the going looks easy. It is important to tighten our grip on
the reins at this point.
I think the crucial period is from this summer until autumn
2025, when the Medium-Term ’21 Plan reaches the end of theroad. It is essential that the Sales Division in particular take a goodlook at the market conditions and review the overall productportfolio, including the lineup of models on offer and optimal
pricing, and devise a marketing strategy that strikes a goodoverall balance.
Production sites also need to adjust their operations in
response to fluctuating demands. The Serbia Factory is operating
more stably now with better training on the factory floor, but many
obstacles remain before it can start a vertical take-off toward
full-scale operation. For the Sales Division, it is more important
than ever to monitor the operating levels of production sites
constantly and draw up sales policy and sales plans that takeaccount of the supply and demand balance constantly. To do this,good communication throughout the value chain along the corefunctions of production, sales and R&D is essential. I would like to
see the digital transformation system currently in development
implemented and fully leveraged to enable the use of real-time
information for this purpose.
Another key is to decide what leads our next medium-termbusiness plan. What should be our goals in a tumultuous period

for the automotive industry as it goes through a majortransformation? How should we be involved in the lifestylechanges that will come with the expansion and embedding of car
sharing and autonomous driving, and the creation of newcityscapes and downtown revitalization they will bring? These aresome of the questions we need to answer. For example, oursensing technology and airless tire technology may be able toaddress some of the challenges. For this to happen, the R&D
Division needs to have a wider perspective that takes in possible
future business models as it develops the seeds of newtechnologies and, most importantly, have a vision to match suchseeds with societal needs. Think, for example, what sort of worldis possible with our airless tire technology? How can wecontribute to the society of the future through our core business?
This way of thinking is what sustainability is about.
We changed our company name in 2019, which marked ourtransition from a rubber product manufacturer to a tire
manufacturer. Depending on how we proceed, we may well needto explore new ways of contributing to society through our tirebusiness. We may, if our future vision calls for it, also need to look
to collaborating with other companies or partnering with the
public sector or academia. In order to explore these possibilities,
we need people who can rise above the daily demands of work,
look at the big picture from a wider perspective and bring a fresh
outlook to business concept development. In order to ensure
future competitiveness, a good recruitment strategy is crucial.
Attracting talent is a challenge not only for us but for thewhole manufacturing sector. I believe that the key is tocommunicate our way of working and our belief in what we do,
not just attractive terms and conditions.
The Company’s executive members and outside directors areengaging in highly active discussions at board meetings, skillfully
facilitated by the chairperson, on a wide range of topics fromimmediate financial results to medium- to long-term issues. I am
committed to playing my part in the sustainable growth of theCompany through my role on the Board of Directors as well as byvisiting the frontline workplaces that support our business
operations.

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Introduction

GovernanceI believe the record high corporate performance achieved in fiscal
2023 resulted from the steady establishment of efficiency-oriented
measures stipulated in the Medium-Term ’21 Plan, but it also
undoubtedly benefited from what you might call tailwind
assistance in the form of declining ocean freight rates and a
depreciating Japanese currency. I would like to see the Company
maintain and improve its earning power while continuously
increasing resilience in the face of change so that it can still enjoy
a steady increase in profits when any tailwinds turn into
headwinds.
One essential factor here is a high degree of sensitivity to risk.
Company-related risks are becoming increasingly diverse andfrequent. In addition to geopolitical factors and climate change,
the inherent dangers from cyber risks and other risk areas havegrown rapidly more intense in recent years. The impact of theserisks on companies operating on the global stage isimmeasurable, so I think management needs to be conscious ofthese risks at all times and work hard to control them without evertaking their eyes off the ball. Having introduced a stronger risk
management system, the Toyo Tire Group now needs not only toidentify important risks in a timely manner, but also to analyzeeach risk in detail from multiple perspectives and determine how
best to manage it. For instance, the Group’s business strategy
involves concentrating management resources in specific areas
both in terms of products and geographical regions. That is oneof the Group’s strengths, but it comes with its own risks.
Furthermore, certification issues have taken center stage in the
manufacturing industry in Japan in recent years. The impact of
reputational risk on a company’s brand value can be enormous.
Yes, it is important to manage any crisis that might arise whenrisks surface, but it is equally important for the entire organization,
including the Board of Directors, to discuss ways of preventing
those business risks and explore the best direction to be taken interms of risk management.
The current management challenge for the Group is tostabilize its two main production bases in the United States andEurope. Capacity utilization at the main U.S. plant needs to be
improved. Full production systems are scheduled to be up andrunning at the Serbia Factory within the current business year.
However, the plant needs to be able to respond more flexibly to

67

TOYO TIRE Integrated Report 2024

Top Message

VisionStrategy

Materiality

Close-up

Governance

Data

Build Your Own Foundation:
A Critical Juncture

Building up strengths to getleverage for future value
creation

Michio Yoneda

Yukiko Araki

Outside Director

Outside Director

demand fluctuation due to various environmental changes byrevising its enterprise resource planning (ERP) and organicallylinking business functions, such as production, sales, andinventory. In other words, it needs to promote data-driven
management.
Digital technology is not a panacea and should not be treatedas such. Before systemizing a business process, you have to takestock of the process itself. Don’t rely too much on external
experts, but do the business process reengineering (BPR)
yourselves because you are the ones that understand yourbusiness the best. The Toyo Tire Group, like many othercompanies, have to deal with a lack of IT-savvy human resources.
The Board of Directors must supervise the execution of digitaltransformation (DX) initiatives, including cost aspects, and decide
for itself whether it is possible to build a particular system thatincorporates the Group’s policies and needs or not, rather thanleaving it up to consulting companies and IT systems vendors.
Meanwhile, looking at the financial base, the Group has madesome progress over the past few years on improving earning
power, which is the main premise of the medium-term plan, andachieved a high level of return on equity (ROE). The capital
adequacy ratio is currently sitting above 60%, which could beconsidered ideal, but the price to book value ratio (PBR) is lagging
behind. The market is probably assessing the sustainability ofthese earnings and financial strengths. In that sense, the Group’scommitment to effective growth investment and expansion ofshareholder returns are important financial strategies.
Our debates in the Board of Directors have always been
vigorous, and I feel that the Board’s business execution
capabilities have also improved. To further enhance theeffectiveness of the Board, I believe it is necessary to stimulateeven more debate of medium- to long-term issues and further
strengthen the Board’s supervisory function. I believe the role ofan outside director is to serve as both a management supervisor
and a catalyst for astute action. If we outside directors fulfill these
designated roles, we can create effective chemical reactions that
help propel Toyo Tire management to even greater heights andachievements.

In 2023, a number of factors such as the weakening of yen and adrop in ocean freight rates helped to boost our profitability, but wecan also attribute the positive results to the embedding of the
management policy to actively pursue profits, which has enabled
us to leverage our strengths. Although we are already building up
profits in 2024, there are many uncertainties facing us in theexternal environment. In order to further bolster our strengths, wemust differentiate ourselves against our competitors in key
markets outside North America, and generate profits throughbusiness strategies that reflect the TOYO TIRE culture andidentity.
In terms of production and supply, the key to supporting thebusiness strategies will be how we utilize the Serbia Factory,
which came into operation in 2022. In the tire business, which is
our core business, production technologies are the criticalfoundation, which are so important that one might say that the tirebusiness is a process industry. For this reason, I believe that it will
become important for the Company to make production
technologies more efficient and advanced so that more value canbe added to products to meet the needs and expectations ofdifferent markets and to roll out the latest technologies available atthe Serbia Factory strategically on a global scale. We will need toreview our strategies for investing into production facilities andtechnological development toward the next medium-term plan.
We must also bear in mind that society is rightly calling on
companies to make efforts to reduce the environmental impact of
their business activities, and that we need to include a long-term
perspective of environmental value creation in our decisionmaking. As the global competition heats up, however, some mayview this from a short-term outlook and fear that actions andinvestments that look to the future may impact revenues
negatively. Adverse factors such as the politically motivatedbacklash against ESG and, in the automotive industry, the slowing
down of policies to accelerate EV adoption may also complicate
medium-to-long-term management decision-making.
However, these factors do not change the medium-to-longterm trend that requires businesses to be responsible for and play
an active role in the environmental conservation and climate
action. It is important that we do not allow the vagaries of fashion
to sway us, and instead run our business with a firm focus on the

big picture, always considering how we as a manufacturer create
value for society through our products, services and technologies.
Naturally, any environmental value we create will be underpinnedby the unique added value we can offer such as the joy of driving
and comfort. Technological development work is what secures
our values and outlook as a company, and I feel that we can bemuch more open to the outside world about the work we do, notonly regarding the current product development pipeline but also
our diverse initiatives to sow and nurture the seeds of the future.
I would like to see the management team to present a clear
vision of a sustainable mobility that the Company is trying toachieve, share this future vision across the workforce, and leadfrom the front on this journey. I strongly believe that employees will
feel motivated and fulfilled if they can tangibly feel that the work
they do make a positive contribution to society.
With a view to increasing corporate value, I would like to see
the Company redouble its public relations efforts, proactively
communicating to our broad range of external stakeholders on
our visions, goals and day-to-day achievements. It is often said
that Japanese companies in general, not just our Company, arepoor at appealing to the outside world compared to companies inother countries, but the metrics by which stakeholders assesscompanies are changing. Good disclosure practices enable fairassessments and can also lead to opportunities to collaborate
with companies from other industries as well as academic
institutions that share the same vision and aspirations to createsocial value together.
As a director, I am committed to playing my part in the
Company’s growth and its endeavor to make a sustainable
society a reality through its business.

TOYO TIRE Integrated Report 2024

68

Introduction

GovernanceTop Message

VisionStrategy

Materiality

Close-up

Governance

Data

Directors, Audit & Supervisory Board Members and Corporate Officers
Directors

Apr. 1973
Dec. 2003

Apr. 1983

Number of shares of the Company held

Number of shares of the Company held

032,192Joined Mitsubishi Corporation
Director, Hokuetsu Paper Mills, Ltd. (currently, Hokuetsu
Corporation)
General Manager, Paper & Packaging Dept., Mitsubishi
Corporation
Senior Vice President; Division COO, Living Essential
Products Division, Mitsubishi Corporation
Adviser (full-time), Toyo Tire Corporation
Director, Chairman of the Board (current position)

Mar. 2014
Jul. 2015

Joined Toyo Tire Corporation
President, Toyo Tire Holdings of Americas Inc.
Division General Manager, Tire Planning Division, Toyo Tire
Corporation
Corporate Officer; Division General Manager, Tire Planning
Division, Tire Business Group Headquarters; General
Manager, Europe Business Unit
Senior Corporate Officer; Division General Manager, Tire
Planning Division, Tire Business Group Headquarters;
General Manager, North America Business Unit
Representative Director, President & CEO (current position)

Director, Corporate Officer

Director, Corporate Officer

Tatsuo Mitsuhata

Satoru Moriya(Date of birth: December 13, 1964)(Date of birth: December 23, 1965)

Number of shares of the Company held

Number of shares of the Company held

Career summary, positions, assignment and significant concurrent positions

Career summary, positions, assignment and significant concurrent positions

14,062

Jan. 2019
Mar. 2019

Career summary, positions, assignment and significant concurrent positions(Date of birth: April 2, 1961)

Nov. 2015

Jan. 2017

Career summary, positions, assignment and significant concurrent positions(Date of birth: April 8, 1958)

Apr. 1985
Apr. 2010
Jan. 2013

Jan. 2016

Number of shares of the Company held

Takashi Shimizu

Apr. 1983
Jun. 2007

Apr. 1988
Jan. 2012
Jul. 2014(Date of birth: December 13, 1960)

Number of shares of the Company held

Yasuhiro Yamada(Date of birth: June 14, 1949)

Career summary, positions, assignment and significant concurrent positions

Apr. 2018
Mar. 2019

Yukiko Araki

Representative Director, President & CEO

Career summary, positions, assignment and significant concurrent positions

Apr. 2015

Outside Director

Michio Yoneda

Director, Chairman of the Board

5,073

Apr. 2013

Outside Director

Joined Toyo Tire Corporation
President, Toyo Tire U.S.A. Corp.
General Manager, Europe Business Unit, Tire BusinessGroup Headquarters, Toyo Tire Corporation
Corporate Officer; Division General Manager, Tire Planning
Division, Tire Business Group Headquarters
Corporate Officer; Vice President, North American Business
Development DivisionCorporate Officer; Vice President, Sales Headquarters
Director; Corporate Officer; Vice President, Sales
Headquarters (current position)

Mar. 2020

Joined Bank of Japan
President & CEO, Osaka Securities Exchange Co., Ltd.
(currently, Osaka Exchange, Inc.)
Director & Representative Executive Officer, Group COO,
Japan Exchange Group, Inc.
Special Advisor (part-time), Toyo Tire Corporation
Outside Director, Asahi Broadcasting Group Holdings
Corporation (current position)
Outside Corporate Auditor, Sumitomo Chemical Company,
Limited (current position)
Outside Director, Toyo Tire Corporation (current position)

Significant
concurrent
positions

Outside Director, Asahi Broadcasting Group Holdings
Corporation; Outside Corporate Auditor, Sumitomo Chemical
Company, Limited

Jan. 2013
Dec. 2016
Jun. 2018
Jun. 2018

0Jul. 2006

Jul. 2008
Dec. 2012

Apr. 2018

Dec. 2020
Mar. 2021
Mar. 2023
Jun. 2023
Significant
concurrent
positions

Joined Japan’s Ministry of International Trade and Industry(currently, Ministry of Economy, Trade and Industry)
Director, Tourism Economy and International Affairs Division,
Policy Bureau of Japan’s Ministry of Land, Infrastructure andTransport (currently, Ministry of Land, Infrastructure, Transport
and Tourism)
Deputy Governor, Yamagata Prefecture
Joined Hitachi, Ltd.; General Manager, CSR Division, Legaland Communications Group; Member, Environmental
Strategy Office
Corporate Officer; Executive General Manager, Sustainability
Promotion Division, Government & External Relations Group,
Hitachi, Ltd.
Outside Director, Fuji Pharma Co., Ltd. (current position)
Outside Director, Nakanishi Inc. (current position)
Outside Director, Toyo Tire Corporation (current position)
Outside Director, Hirose Electric Co., Ltd. (current position)
Outside Director, Fuji Pharma Co., Ltd.; Outside Director,
Nakanishi Inc.; Outside Director, Hirose Electric Co., Ltd.

10,843Apr. 1989
Nov. 2014
Apr. 2015
Jan. 2017
Feb. 2018
Jan. 2019Feb. 2020
Mar. 2021

Joined Toyo Tire Corporation
General Manager, O.E. Tire Development Dept.
General Manager, O.E. Tire Development Dept.; General
Manager, O.E. Tire Technical Service Dept.
Division General Manager, R&D Division No. 1
Corporate Officer; Division General Manager, R&D Division
No. 1, R&D Headquarters
Corporate Officer; Division General Manager, Technology
Development Division, R&D Headquarters; Division General
Manager, Product Development DivisionCorporate Officer; Vice President, R&D Headquarters
Director; Corporate Officer; Vice President, R&D
Headquarters (current position)

Audit & Supervisory Board Members

Corporate Officers

Standing Audit & Supervisory Board Member

President & CEO

Takashi Shimizu*

Corporate Officer

Masami Miyamori

Executive Corporate Officer

Tomoshige Mizutani

Corporate Officer

Yoji Imura

Senior Corporate Officer

Masayuki Kanai

Corporate Officer

Kenta Kuribayashi

Corporate Officer

Tatsuo Mitsuhata*

Corporate Officer

Yuji Miyazaki

Mitsunobu Kohno

Standing Audit & Supervisory Board Member

Satoshi Takashina

Audit & Supervisory Board Member

Tomoyuki Matsuba

Audit & Supervisory Board Member

Yasuhiro Kitao

Corporate Officer

Satoru Moriya*

Corporate Officer

Tamotsu Mizutani

Tsukasa Takahashi

Corporate Officer

Kiyohito Hasumi

Corporate Officer

Ichiro Shima

Corporate Officer

Hideaki Takahashi

Corporate Officer

Junichi Uda

Corporate Officer

Hiroshi Nobuzawa

Corporate Officer

Haruhiko Kitagawa

Audit & Supervisory Board Member* Indicates post held concurrently with that ofTomoyuki Matsuba, Yasuhiro Kitao and Tsukasa Takahashi are outside auditors.

director

Skill matrix
Outside Director

Outside Director

Ken Morita

Atsushi Takeda(Date of birth: October 24, 1948)(Date of birth: February 27, 1947)

Number of shares of the Company held

Number of shares of the Company held0

Career summary, positions, assignment and significant concurrent positions

Apr. 1971

May 1970
Jun. 2002
Apr. 2006

Oct. 2000
Apr. 2006
Jun. 2009
Jun. 2012
Nov. 2015

69

0

Career summary, positions, assignment and significant concurrent positions
Joined Matsushita Electric Industrial Co., Ltd. (currently,
Panasonic Holdings Corporation)
Representative Director and President, Matsushita Plasma
Display Co., Ltd.
Senior Vice President, Panasonic AVC Networks Company(currently, Panasonic Connect Co., Ltd.), Matsushita ElectricIndustrial Co., Ltd.
Representative Director and Senior Managing Executive
Officer, Panasonic Corporation (currently, Panasonic Holdings
Corporation)
Advisor, Panasonic Corporation (currently, PanasonicHoldings Corporation)
Outside Director, the Company (current position)

TOYO TIRE Integrated Report 2024

〇 Major skill / ● Other skill

Jun. 2014
Mar. 2016

Joined Nippon Steel Corporation
Director, Nippon Steel Corporation
President and Representative Director, Nippon Steel Coated
Sheet Corporation
Director and Advisor, Nippon Steel Coated Sheet
Corporation
Outside Director, Toyo Tire Corporation (current position)

Nomination

Area able to exhibit particular expertise

OutsideandResearch Manufacturing Finance
Legal
Experience
Corporate Sales andDigitalandand quality
andand risk
outsideSustainability Compensation
management marketingtransformation
development assurance accounting management
Japan
Committee

Name

Officer category

Yasuhiro Yamada

Director, Chairman of the
Board

〇

●

Takashi Shimizu

Representative Director,
President & CEO〇〇

Tatsuo Mitsuhata

Director, Corporate
Officer●〇

Satoru Moriya

Director, Corporate
Officer●●

Ken Morita

Director●〇

Atsushi Takeda

Director●〇

Michio Yoneda

Director●〇

Yukiko Araki

Director

●

●

●

●

〇

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〇

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〇

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〇

〇

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TOYO TIRE Integrated Report 202470