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

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 dreams
of its stakeholders by providing value in safety,
comfort, and decarbonization.
Chapter 1:
Providing a push when making big
decisions 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 20
years 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 the
spread 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 be
made, 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. It
is considered the gold standard of risk management.
When I analyzed the company’s response in my own
way, 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 will

T 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 outside
officers, 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 the
future, 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

Data

the Group. Conversely, if the concentric circles of theGroup are broken up when the Toyota Group implements
its once-in-a-century transformation and competes with
automakers 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 for
growth, 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 the
pursuit 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 our
stakeholders will support us.

T OYODA GOSEI REP OR T 20 2381

Governance

Message from the CRO
We aim for sustainable growth anddevelopment through initiatives tocontrol risk and the challenge toturn risk into opportunity.

Hiromasa Zaitsu
Risks Surrounding Toyoda Gosei
There are a diverse range of risks that could shakethe foundations of management, and they are making
the situation unclear and uncertain. They include thestrategic business risks of the automotive industry
in the midst of a period of major change, as wellas natural disasters, infectious diseases, trade
restrictions and sanctions, human rights violations,and information security.
In order to continue sustainable growth anddevelopment as a company, it has become importantto understand and accurately address these risks.

Controlling Risks
The Internal Controls Committee, chaired by thepresident, has been established to implement
specific measures through three subcommittees:
the Risk Management Subcommittee for selecting
and mitigating important risks, the Compliance
Subcommittee for ensuring thorough compliancewith corporate ethics and laws, and the Internal Audit
Subcommittee to implement internal auditing in asystematic manner.
In particular, as a response to key risks, we have been
focusing on the following measures; preparations fora Nankai Trough earthquake since we are locatedin the Tokai region in Japan, prompt sharing of
information and strengthening of cooperation at the
global level to continue production operations undersuch circumstances as the COVID-19 pandemic andthe impact of the conflict in Ukraine, visualization andsystematic improvement of cybersecurity measures,and so on.

82

Corporate Officer

CRO

Future Initiatives
In June 2023, we created the new role of CRO.
We have been implementing preventative measures tomitigate risks and prompt and appropriate responses
to incidents when they occur. Going forward, as CRO,I will work to raise the overall level and respond more
flexibly by providing horizontal coordination to relevant
departments within the company and to affiliates inJapan and overseas. We will address issues related tothe organizational structure in a cross-organizationalmanner from the standpoint of the CRO, such as
different departments being responsible for different
types of risks and the difficulty of identifying the
responsible department due to the involvement ofmultiple departments depending on the type of risk.
In addition, several issues have emerged, which
require responses in cooperation with entities ineach region on a global basis such as the revisionof laws and regulations on trade controls in various
countries. We will work to develop internal response
systems and specific measures to deal with suchcomplex and multifaceted risks. Although there are
an increasing number of risks for which it is difficult toknow the correct response, we will prepare for themby assessing the current situation and developing
response scenarios based on a variety of situations.
We are committed to risk management with the belief
that enhancing our ability to respond to contingencies
will be a proactive approach to turning risks into
opportunities for the Company.

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Risk Management
Basic Philosophy
We are working to prevent risks that could have graveconsequences for management and to minimize
damage in adverse events. For these purposes, we
identify risks in each function and make decisions on
how to respond in meetings of the Board of Directors,
Internal Controls Committee, and various general
councils.
An Internal Controls Committee headed by thecompany president identifies key risks, determines
measures to counter them, and checks on the
progress in executing these measures. In this way,
Organization of Internal Controls Committee

these measures are made more effective.
In addition, initiatives to deal with key risks or
unexpected risks due to political instability or otherexternal factors are discussed regularly by the Boardof Directors, and continuous improvements are made.
Moreover, Risk Management and Response Guidelines
have been established. These guidelines show theactions taken to prevent potential risks and to respondto problems appropriately and quickly.

Internal Controls Committee

Chairperson: President Saito

Deliberation of policies and measures related to internal controls

Risk Management Subcommittee

Compliance Subcommittee

Identifies major risks, decides measures
to avoid or mitigate them, confirms
implementation status

Reports and deliberates on corporate ethics
and status of compliance with laws, etc.

Internal Audit Subcommittee
Status reports on internal audits

Principal risk management activities
Specify key risks for the next fiscal year
● Confirm plans to counter key risks●

Final report on the progress status ofactivities for the current fiscal year
● Improve and review risk management
policies, activities, standards, etc.

PLAN

●

ACTIONPLAN

ACTION

DO

DO(Execution of annual plan)● Share information on key risks (includingGroup companies in Japan and abroad)● Apply to company departmental policies● Conduct activities based on plan
Review yearly activities (including Group
companies in Japan and abroad)● Share risk analysis● Evaluate and discuss activities withmembers of the Board of Directors
●

CHECK

CHECK

External disclosure of activities (securities report, corporate governance report, integrated report, company website, etc.)

Response to Key Risks
Operating foundation risks (primarily handled by CRO)and business strategy risks (primarily handled by CFO)
based on the business environment are assessedfrom the perspective of impact on operations (financial
impact, etc.) and possibility of occurrence (frequency),and key risks are identified.
Key risks are reflected in company policy as important
action items, and initiatives are made to mitigate or
prevent risks.

Examples of Key Risks
Classification

Main Key Risks

Large Large-scale disasters (earthquakes, storm
and flood damage, etc.)
 Risks, opportunities, and responses basedon TCFD DX support
 Recalls due to serious quality issues

 Cyberattacks/scam emails
 Carbon neutrality measures Raw material procurement, energy price hikes, etc.
 BEV conversion measures
 Injuries and operation shutdowns due to serious work accidents

Medium Leakage of confidential information
 Trade friction

 Traffic accidents (causing serious damage/injury)
 Incidents of harassment

Small Antitrust law violations
 Business operations with partnercompanies

 Interruption of business operations due to fire or explosion
accidents

Size of risk
Impact on
operations(financial impact,etc.)
×Possibility ofoccurrence(frequency)

T OYODA GOSEI REP OR T 20 2383

GovernanceCrisis Management Project in Anticipation of Large-Scale Earthquake Disasters
A crisis management system has been put in place forthe event of a massive disaster, such as the predicted
Nankai Trough earthquake or natural disasters due toclimate change. This system is based on the principles
of human life first, community support, and earlyrecovery. Specifically, in addition to infrastructure andsystem measures based on the Crisis Management
Project, resilience training has been conducted morethan 180 times for directors and members of antidisaster
departments since FY2013. These efforts are basedon the company’s belief that improving the skills of
response personnel is essential. Specific proceduresfor the recovery of affected buildings, facilities,

and processes have also been established, and foralternative production in a production recovery system.
Recovery training for design drawings and other datais also carried out so that product development can becontinued even after disasters. In addition, workshops
to strengthen crisis management not only in Toyoda
Gosei companies but also at Group companies andsuppliers are conducted regularly. Assessments using
anti-earthquake measure implementation statuscheck sheets, clarification of weak points with graphs,
presentation of responses taken at Toyoda Gosei andother companies, and collaborative preparation ofbusiness continuation plans (BCP) are carried out.

Disaster Response

Initiatives to Date

Disaster outbreak – First response

Recovery

Permanent

Warning & Monitoring Team
Earthquake
occursEmergency
earthquake alertFirst Response
Task Force
Advance Team
(investigative team)

Emergency
Task Force

Life Support
Task ForceDistrict
Task Force

Production
Restoration
Task ForceInstructions
Reports

Classification

Measures

Facilityandequipment
measures Earthquake resistance measures for buildings and facilities
 Establishment of a disaster prevention center to serve as
an operations base for the entire company in the event of
a disaster Equipping all locations with a multi-channel access (MCA)
radio system*1 and satellite phones
 Installation of crisis management servers (earthquakeresistant structure) and emergency power generators
 Operation of a DR*2 system and DCs*3

Systemmeasures Implementation of site and building safety assessments
 Training in operation of earthquake early warning systems
and employee safety information systems
 Preparation of supply chain information
 Preparation of a business continuity plan (BCP)

Skills Ongoing resilience training (disaster simulation exercises)*1 Radio system used in Japan for various purposes, from daily
operations to emergencies and disasters*2 System for restoring and repairing damaged systems (Disaster
Recovery)*3 General term for special facilities equipped with and operating
computers, data communications, and other equipment (DataCenter)Enhancing Our Global Risk Response
In response to global risks that occur not only inJapan but also in other countries (e.g., parts and raw
material shortages, the Ukraine conflict, etc.), we aretaking necessary actions on a global basis to quickly
assess the situation (weekly BCP reports) both in

84

Japan and overseas. Standardization is also underway
so that domestic and international locations can takemeasures on their own initiative, and we are enhancing
our ability to respond to key risks seen in the businessenvironment of each company.

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Basic Policy for Cybersecurity Measures
To strengthen the control of confidential information,
annual checks of the compliance status of each division
based on company confidentiality management
regulations are conducted together with onsite audits.
Self-inspections are also done at Group companies inJapan and overseas, as well as at major suppliers.
Confidentiality officers are assigned in all departments,
and confidentiality education activities are conductedbased on information system security operating

standards and a confidential information management
manual. At domestic and international Group
companies and major suppliers, specific measures
are stratified and executed based on the size ofthe impact on Toyoda Gosei and inspection results
for cybersecurity risk measures at each company.
Regular reports and discussions are conducted in allcompany-wide councils, and cybersecurity measures
are implemented together globally.

Main Cybersecurity Measures
Classification

Prevent
leakage due tonegligence

Prevent leakage
and damage
due to malicious
intentMeasures (domestic and international Group companies and suppliers respond in accordance with the size of the impact)

Facility andequipment
measures Data encryption on personal computers

Systemmeasures Security measures when sending emails out of the company (mandatory cc to superior’s email address,
encryption of attached files)

Facility andequipment
measures Installation of computer anti-virus software Constant monitoring of unauthorizedcommunications
 Prevention of unauthorized connections to
the network

 Firewalls to control communication with outside parties Detecting and preventing tampering with systems open to the
public outside the company

Systemmeasures Confidentiality pledge
 Stricter standards for allowing items to betaken from premises

 Restricted access to file servers

Educational activities(morale measures) USB device connection controls

 Security training for employees Training in responding to targeted email attacks
 Company-wide confidentiality controls inspections and on-site audits using check sheets

Compliance
Basic Philosophy
Toyoda Gosei’s management philosophy states, “We
promote business operations with integrity throughthe establishment of a system founded on thoroughcompliance and corporate ethics.” Together withhighly ethical and fair business practices, we strive
for thorough compliance in all areas based on thisphilosophy. The Toyoda Gosei Group Charter for
Business Ethics sets forth shared values and acode of conduct for the entire Toyoda Gosei Group.
Group companies in Japan and other countries thenformulate and implement their own code of conduct
based on the Charter. Toyoda Gosei Co., Ltd. has alsoestablished the Toyoda Gosei Guidelines for Business
Ethics, which it expects every employee to follow, andhas worked to familiarize all employees with theseguidelines.

Compliance Implementation System

Toyoda Gosei Compliance Implementation System

Toyoda Gosei has established the Internal Controls
Committee with the Company’s president serving aschairman and all company officers as members, whose
activities include reporting on and discussing thestatus of compliance with business ethics, laws, andregulations. The items reported and discussed in theCommittee are shared with the compliance advocates
selected by each department in the Company-wide
Compliance Implementation Council so that they will
be incorporated into the activities of each workplace.
The Committee works for thorough compliance witha unified approach between management and theworkplace.

Corporate activities

Domestic
affiliates

Support for thecompliance system

Management
Philosophy

Support for thecompliance system

Toyoda Gosei
Group Charterfor Business Ethics

Overseas
affiliates

Toyoda Gosei Guidelines
for Business Ethics
All company executives

Compliance advocates from each divisionInternal Controls
Committee

Company-wide Compliance
Implementation Council

Ensuring compliance
Legal affairs/
compliance training

Compliance consultation office(internal/external)
Labor consultation office(internal)

T OYODA GOSEI REP OR T 20 2385

GovernanceSpecific Compliance Initiatives
Training and Educational Activities
Toyoda Gosei conducts various training and education
activities with the aim of raising and solidifying
compliance awareness in every employee. Trainings
are conducted by level in the company and by risks
corresponding to the work. The level-specific trainings
target new officers, new managers, mid-level employees,
new employees and others as an opportunity to spreadand deepen awareness of compliance at various career
stages. Risk-specific training is conducted for specificrisks. These trainings include training for transferees

prior to overseas assignments, antitrust law training forpeople in sales and other business departments, training
for sports clubs, and more. The training programs
are proactive in incorporating online training so that alarge number of eligible participants can participate.
Educational tools are also prepared, including aCompliance Academy that is regularly published in thecompany newsletter, and Compliance KY Case Studies
using various case study materials.

List of Workshops/Education at Toyoda Gosei
Category

Workshop name/education

For eachrisk

Education

Main content

Frequency

Company officers

Company law, fiduciary duty, etc.

As
neededNew manager training

New managers

Compliance, mindset as a manager, antitrust laws, bribery, etc.

1 time/year

General employees (mid-level)

Compliance, contracts, internal company regulations, laws (antitrust laws, bribery, etc.)

1 time/year

Fifth-year employee training

General employees (skilledworkers)

Compliance in manufacturing settings

1 time/year

New employee training

New employees

Compliance, laws

Whenjoining thecompany

Pre-overseas assignment
training

Management/Generalemployees

Key points on compliance in other countries (antitrust laws,
bribery, etc.)As
neededAntitrust law training

Management/Generalemployees (sales)

Laws, internal company regulations

1 time/year

Product liability law training

Management/Generalemployees (technical)

Laws, internal company regulations

1 time/year

Training for sports clubs

Management/Generalemployees (athletes, staff)

Compliance overall

1 time/year

Compliance Academy(company newsletter)All employees

Presentation of compliance cases

4 times/year

For each Legal affairs/compliancetraining
level

Workshops

Recipients

Workshops/study sessions
for officers

Compliance KY Case Studies All employees

Theme-based case studies and interpretations (100)−Compliance Awareness Surveys and Self-Inspections
To ascertain the degree to which complianceawareness has been incorporated into the company
and whether there are any signs of problems, we
conduct an annual compliance implementationquestionnaire survey of all employees. The resultsof the survey are reported to the Internal Controls
Committee, and measures are implemented
throughout the company, and each workplace also
conducts improvement activities led by complianceadvocates by referring to the departmental feedback
reports of the questionnaires. Domestic and overseas
Group companies conduct annual self-inspectionsof the status of their compliance implementation
systems, status of compliance with antitrust andcompetition laws, bribery regulations, and otherimportant laws and regulations, as well as risks in key
functions including internal controls, human resources,
accounting, procurement, and quality. The results ofthese inspections are reviewed by each functional

86

department of the Company, and feedback reports
are provided to support each company in making
improvements and taking action so that the entire
Toyoda Gosei Group is working to ensure thoroughcompliance by implementing the PDCA cycle.
From the FY2022 Compliance Implementation Questionnaire

Aware

Implementing

93.9%

95.1%

I am aware of most of theinformation in the Toyoda Gosei
Guidelines for Business Ethics

We are implementing complianceand conducting awarenesscampaigns in the workplace

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Initiatives for the Prevention of Antitrust and Competition Law Violations
The Group Charter for Business Ethics states that the
Toyoda Gosei Group will conduct business activities
with a spirit of “fair and free competition” (compliancewith antitrust and competition laws). We haveformulated the Codes of Conduct for Antitrust Law
Compliance as guidelines to be followed by our
employees, and are working to ensure thoroughcompliance by employees through training andeducational activities. Antitrust law compliancemanuals based on the laws of each country areprepared for the regions where Group companies arelocated, and initiatives are made to prevent
anticompetitive acts globally.

Anti-Bribery Initiatives
The Group Charter for Business Ethics clearly statesthat in Toyoda Gosei Group’s relationships withgovernment agencies and political parties, we shallstrictly refrain from any actions that could be mistaken
for “back-scratching” or cronyism in the eyes ofsociety in general, and shall strive to maintain highly
transparent and sound relationships. We have also

formulated Global Anti-Bribery Guidelines as acommon guide for global activities, and are making
Group-wide efforts to prevent bribery, accounting
fraud, and other forms of corruption. Education isprovided to employees through level-specific training
and training for Group companies doing business inregions where there is high risk to prevent corruption.

Initiatives to Ensure thorough Export Controls
Toyoda Gosei has established an import/export controls
system to ensure that goods, technical materials,
software, and other items subject to import/export
restrictions, as well as items that violate laws andregulations (such as counterfeit products), are not takenout of the country or brought into the country without
proper authorization.

In addition to ensuring compliance with laws andregulations through the Security Export Control Systemand company regulations, the Company ensures thatdomestic and overseas Group companies conduct
installation and check for defects through self-inspection,and provide appropriate support in cooperation with thehead office and overseas control companies.

Early Detection and Correction of Problems through an Internal Reporting System
We have established compliance consultation offices
both inside and outside the company for the purposeof early detection and correction of complianceissues and violations of internal rules and laws andregulations in the course of business operations.
Outside lawyers are in charge of the external offices
to deal with problems from an objective standpoint.
This system allows all employees of the company
and family members living with them to receive
consultations, and the company takes thoroughmeasures to protect their privacy and ensure thatthey will not be treated unfairly because of theirreport. In addition to the internal consultation officeof each Group company in Japan, they also have acommon external compliance consultation office with

the Company. Overseas Group companies also haveexternal or internal consultation services. In FY2022, asa result of making the consultation offices known to all
and building trust, 66 reports and consultations werereceived from within the company and its domestic
affiliates, mainly concerning labor management,
workplace problems, and harassment. These cases
were promptly investigated and appropriate corrective
measures were taken to resolve the issues.
No. of Compliance Consultations/Reports (Japan)
FY

2019

2020

2021

2022

No. of cases

48

69

42

66

T OYODA GOSEI REP OR T 20 2387Governance

Officers (As of October 31, 2023)

President, CEO

Vice President, CFO, CMO

Director, Corporate Officer

Director, Corporate Officer, CTO

Katsumi Saito

Hiroshi Yasuda

Masaki Oka

Mitsuhiro Nawashiro

Apr. 1988

Joined Toyoda Gosei

June 2012 General Manager, Technical
Administration Division, Toyoda
Gosei
Jan. 2015 General Manager, Human
Resources Development
Division, Toyoda Gosei
June 2018 Corporate Officer, Toyoda Gosei(Retired in June 2019 due to achange in the board system)
Jan. 2019 President, TG Meteor GmbH

Apr. 1982

Joined Toyoda Gosei

June 2012 Corporate Officer, Toyoda Gosei
June 2016 Director, Managing Officer,
Toyoda Gosei
June 2018 Director, Senior Managing
Officer, Toyoda Gosei

Apr. 1985

Joined Toyota Motor Corp.

Jan. 2014 General Manager of Related
Business Department, Toyota
Motor Corp.
Jan. 2015 Adviser, Toyoda Gosei
June 2015 Corporate Officer, Toyoda Gosei

June 2019 Director, Corporate Officer,
Toyoda Gosei

June 2018 Director, Managing Officer,
Toyoda Gosei

June 2023 Executive Vice President,
Toyoda Gosei(CFO/CMO)

June 2019 Director, Corporate Officer,
Toyoda Gosei

Sept. 1997 Joined Toyoda Gosei
Jan. 2011 General Manager,
Manufacturing Division 3,
Interior & Exterior Components
Business Unit, Toyoda Gosei
Mar. 2018 President, Toyoda Gosei Minda
India Pvt. Ltd.
June 2018 Corporate Officer, Toyoda Gosei(Retired in June 2019 due to achange in the board system)
June 2021 Corporate Officer, Toyoda Gosei

June 2023 President, CEO, Toyoda Gosei

Director

Outside Director

Outside Director

Outside Director

Naoki Miyazaki

Kimio Yamaka

Mayumi Matsumoto

Takashi Wada

Apr. 1980

Joined Toyota Motor Co., Ltd.

Apr. 1980

Joined Japan Development
BankOct. 1987 Contract newscaster, TV Asahi
Corporation

Apr. 1979

June 2008 Managing Officer, Toyota Motor
Corp.

Joined Sanken Electric Co.,Ltd.

Apr. 2007

Deputy Director-General,
Development Bank of Japan

Apr. 1993

Contract newscaster, Japan
Broadcasting Corporation

Apr. 2007

July 2009

Director of the Energy Strategy
Institute Co., Ltd. (current)

July 2003

Freelance announcer, Horipro Inc.

General Manager, Production
Division, Production
Headquarters, Sanken Electric

Apr. 2013

Senior Managing Officer, Toyota
Motor Corp.

Apr. 2014

Adviser, Toyoda Gosei

June 2014 Executive Vice President,
Toyoda Gosei
June 2015 President, Toyoda Gosei
June 2020 Chairman, Toyoda Gosei
June 2021 Director, Toyoda Gosei

Dec. 2012 General Advisor on Energy
Policy for Yamagata Pref.
(current)
Apr. 2014

Project Professor, Graduate
School of Economics, Kyoto
University (current)

May 2008 Collaborative Researcher, ResearchCenter for Advanced Science andTechnology, The University of Tokyo
May 2009 Project Researcher, ResearchCenter for Advanced Science andTechnology, The University of Tokyo
Apr. 2011

Director, Principal Researcher,International Environment andEconomy InstituteApr. 2013

Visiting Associate Professor, Special
Division of Environmental and Energy
Science, Komaba Organization for
Educational Excellence (KOMEX),The University of Tokyo

June 2016 Director, Toyoda Gosei
Significant Concurrent Positions:
Vice Chairman, Toyota Boshoku
Corporation
Outside Audit & Supervisory Board
member, Hino Motors, Ltd.

Significant Concurrent Positions:
Director of the Energy Strategy InstituteCo., Ltd.
Project Professor, Graduate School of
Economics, Kyoto University

July 2017

General Advisor on Energy Policy for
Yamagata Pref.

June 2019 Director, Toyoda Gosei

Director, Japan Council for
Renewable Energy

June 2007 Corporate Officer, Sanken
Electric
Apr. 2009

Head, Production
Headquarters, Sanken ElectricJune 2009 Director and Senior Vice
President, Sanken ElectricJune 2012 Director and Executive Vice
President, Sanken Electric
Apr. 2015

President and Representative
Director, Sanken ElectricJune 2021 Chairman and Representative
Director, Sanken ElectricJune 2022 Senior Advisor, Sanken ElectricJune 2023 Director, Toyoda Gosei
Significant Concurrent Positions:
Senior Advisor, Sanken Electric

Significant Concurrent Positions:
Visiting Associate Professor, Komaba
Organization for Educational Excellence(KOMEX), The University of Tokyo
Director, Principal Researcher, International
Environment and Economy Institute
Director, Japan Council for Renewable Energy

88About Toyoda Gosei

Audit & Supervisory Board
MemberKenji Oiso
Apr. 1980

Joined Sumitomo Metal
Industries, Ltd.

Value Creation Story

Audit & Supervisory Board
Member

Yamato Suzuki
Apr. 1987

Joined Toyota Motor Corp.

Value Creation Strategy

Foundation of Value Creation

Outside Audit & Supervisory
Board Member

Chika Kako
Apr. 1989

Joined Toyota Motor Corp.

Jan. 2012 Group Leader, Litigation Dept.,
Legal Division, Toyota Motor
Corp. (Project Senior Manager)

Jan. 2015 Chief Engineer, Lexus
International ZL, Toyota Motor
Corp.

June 2004 Joined Mitsubishi Sumitomo
Silicon, Co., Ltd.

Jan. 2015 Project General Manager,
Corporate Planning Division,
Toyoda Gosei

Jan. 2018 Managing Officer, Toyota Motor
Corp.

Mar. 2006 General Manager, Finance &Accounting Division, SUMCO Corp.

Jan. 2016 Deputy General Manager, Legal
Division, Toyoda Gosei

Apr. 2011

Corporate Officer, SUMCO Corp.

Apr. 2014

Functional Officer, Yokogawa
Sumikin Bridge Corp.

June 2016 General Manager, Legal
Division, Toyoda Gosei

Apr. 2002

Deputy Manager, Finance &Accounting Div., Sumitomo
Metal Ind., Ltd.

Jan. 2016 Joined Miraial Co., Ltd.

June 2021 Audit & Supervisory Board
Member, Toyoda Gosei

Feb. 2016 General Manager, Finance &Accounting Division, Miraial Co., Ltd.
Apr. 2017

Project General Manager, Finance &Accounting Division, Toyoda Gosei

Apr. 2019

Managing Director, Toyoda
Gosei Corporate Pension Fund

Data

Jan. 2019 Field General Manager, Material
Technology Field, Advanced
R&D and Engineering Company,
Toyota Motor Corp.
Jan. 2020 Senior General Manager,
Material Technology Field,
Advanced R&D and Engineering
Company, Toyota Motor Corp.
June 2020 Audit & Supervisory Board
Member, Toyoda Gosei
Significant Concurrent Positions:
Senior General Manager, Material
Technology Field, Advanced R&D andEngineering Company, Toyota Motor
Corp.

June 2020 Audit & Supervisory Board
Member, Toyoda Gosei

Corporate Officers

Hiromasa Zaitsu (CRO)
Yutaka Ogasawara
Tadashi Yamamoto
Outside Audit & Supervisory
Board Member

Hitoshi Kuwayama

Outside Audit & Supervisory
Board Member

Masahiko Yokoi

Kenji Hayashi

Apr. 1990

Registered as attorney
Joined Midosuji LPC

Apr. 1978

Apr. 1997

Partner at Midosuji LPC

June 2010 Director, Representative of
Osaka Head Office of the Asahi
Shimbun Company

Nobuhisa Tanaka

June 2013 Director, Nagoya Broadcasting
Network Co., Ltd.

Katsufumi Otani

June 2014 President and Representative
Director, Nagoya Broadcasting
Network

Bijay Krishna Shrestha

June 2019 Chairman and Representative
Director, Nagoya Broadcasting
Network

Yasushi Okada

May 2011 Outside Company Auditor,
Maxvalu Nishinihon Co., Ltd.
Apr. 2012

Vice Chairman, Osaka Bar
Association

Apr. 2013

Part-time Lecturer, Kyoto
University Law School

May 2015 Outside Director, Maxvalu
Nishinihon Co., Ltd.
Apr. 2020

Senior Partner, Midosuji LPC

Joined the Asahi Shimbun
Company

Makoto Hasegawa (CSMO)

June 2020 Outside Director, Zett
Corporation (Audit andSupervisory Committee
Member)June 2022 Advisor, Nagoya Broadcasting
Network

June 2022 Audit & Supervisory Board
Member, Toyoda Gosei

Significant Concurrent Positions:
Advisor, Nagoya Broadcasting Network

Significant Concurrent Positions:
Senior Partner, Midosuji LPC
Outside Director, Zett Corporation(Audit and Supervisory Committee
Member)T OYODA GOSEI REP OR T 20 2389