- Corporate Governance System
- Creating an Internal Control System
- Dialogue with Shareholders and Investors
- Strengthening the Risk Management System
- Information Security Efforts
Corporate Governance System
The Toyo Tires Group corporate governance system consists of the Board of Directors, which is responsible for decision-making and supervision; the Executive Committee, which serves as the decision-making body for business execution; special committees, which act as deliberative and consultative bodies for their respective areas; and the Audit & Supervisory Board, which audits the performance of the Board of Directors and overall business execution. Our corporate governance structure allows these organs to effectively fulfill their respective functions and responsibilities.
The Board of Directors, which is composed of six members (including two outside directors), makes decisions on important matters, such as management policies, goals, and strategies, and supervises the execution of duties by directors. Outside directors attend important meetings, in addition to the Board of Directors meetings, give their candid opinion when appropriate, and work to monitor and supervise business.
The Executive Committee consists of eleven corporate officers (both senior corporate officers and corporate officers) responsible for a particular department. As the decision-making body for business execution, the committee discusses and decides upon important matters. Matters presented to the Executive Committee that required consideration by the Board of Directors are referred to the Board.
The special committees are the Compliance Committee, Crisis Management Committee, Organization & Personnel Committee, Technology Committee, Quality Assurance Committee, Safety & Environment Committee, and Investment & Credit Committee. As subordinate entities of the Executive Committee, each special committee propose plans related to important activities that need to be examined and dealt with throughout the company, analyzes results, and formulates corrective measures. The committees have the various divisions responsible for the execution of business operations implement the plans they have formulated and developed and report on progress in these efforts to the Executive Committee.
The Audit & Supervisory Board, which consists of four members, three of whom are outside members, reports on, discusses, and decides on important matters concerning audits. Audit and Supervisory Board members attend important meetings, such as those of the Board of Directors and the Executive Committee, bring up appropriate issues, and strive to increase the effective of checks on and audits of whether directors are properly fulfilling their duties.
The outside directors and outside auditors employ their particular expert knowledge and make proposals from an objective and neutral perspective, thereby fulfilling their supervisory and checking functions from an external standpoint.
To respond to the broader business and global expansion, the various group companies will work together and strive to strengthen group governance.
(The number of people appearing in the text is as of June 1, 2017)
Diagram of the Corporate Governance System (as of June 1, 2017)
Creating an Internal Control System
The Toyo Tires Group has formulated the “Toyo Tires Group Charter of Corporate Behavior” and the “Toyo Tires Group Code of Conduct” as principles of action to ensure that all Group members act in accordance with applicable laws and regulations, the Articles of Incorporation, and ethical standards. We also provide compliance training and education to all directors, officers, auditors and employees to ensure their full understanding and compliance with these.
We have also introduced a system of compliance officers, with the Chief Compliance Officer (CCO) as the party responsible for ascertaining items related to overall compliance and proposing and implementing various compliance related measures. The compliance promotion system was created by not only establishing a Compliance Committee chaired by the CCO but also appointing Compliance Officers (CO) for each organizational unit, appointing compliance leaders who execute compliance items in line with CO instructions, and taking other steps.
We have also reviewed “Reporting Hotline”, which have been set up and operated to enable employees to directly report and seek advice on compliance matters, and made some improvements, including securing multiple reporting routes to facilitate reporting of compliance-related issues and concerns.
In accordance with the Companies Act, the basic policy on constructing the internal control system was decided by the Board of Directors, and the internal control system was created in line with that basic policy, the basic policy is reviewed each year to reflect changes in the management environment and to ensure that our internal control system remains effective.
Dialogue with Shareholders and Investors
The Company holds quarterly financial results briefing. During the first half and full year briefings, our top executives provide detailed business information, including financial results, future business outlook, business environment, and market trends, to institutional investors and securities analysts.
In addition, efforts are made to improve understanding of the Group’s management by providing opportunities each quarter for IR staff to respond to the particular concerns of institutional investors and analysts (handling individual inquiries). Furthermore, the Group actively works to respond to requests by the growing number of overseas investors, which includes responding to individual inquiries except during the quiet period.
The opinions and requests received during these activities are regularly used as feedback for management and in-house related departments.
Furthermore, efforts are being made to create long-term relationships of trust through constructive dialogue with market participants, which includes inviting analysts to serve as instructors at seminars for management.
Expanding Communication Tools
Investor Relations Webpage
The group publishes an annual report as a communication tool to provide various information, including top management’s thoughts on the Group’s business, business strategy and objectives, and efforts to achieve those, to the various stakeholders, including Japanese and overseas institutional investors and to deepen understanding of and interest in the Group. In the 2016 annual report, we more thoroughly covered not only the growth story and business strategy in the “Mid-Term ’17” but also the corporate governance system, compliance system, and efforts related to human resource development and the environment.
On our website, there is an Investor Relations page for communicating the Group’s latest business information in a timely manner.
Strengthening the Risk Management System
In the Toyo Tires Group, the Chief Risk Management Officer oversees the risk management system the entire Group in line with “Risk Management Rules”. The Chief Risk Management Officer appoints a risk management officer for each material risk that could have a major impact on the Group and stipulates countermeasures for both non-emergency and emergency situations by creating a “Risk Management Manual”. When a crisis occurs, the risk management officer convenes the Emergency Response Meeting, decides on the most appropriate response based on the impact the crisis will have on the Group and stakeholders, and resolve the problem.
The Crisis Management Committee, which is convened by the Chief Risk Management Officer, discusses issues related to proposing and managing responses to crises and continually strives to strengthen the risk management system.
BCP Development and BCM Training
The Toyo Tires Group is also systematically promoting work to develop business continuity plans (BCP) and conduct business continuity management (BCM).
By FY 2014, seventeen business sites, including all manufacturing bases in Japan, had completed developing BCPs, and since FY 2015, BCM training to verify the effectiveness of the BCP has been conducted once year at each business site.
After conducting training in FY 2015 regarding what the emergency response headquarters would do on the day of an earthquake assuming a major earthquake hit during the daytime on a weekday, Ayabe Toyo Rubber Co. Ltd. conducted training in FY 2016 regarding what the emergency response headquarters would do on the days following a major earthquake. The training involved a series of operations including having all the member of each team that received information regarding damage sustained by clients and business partners and the various types of damage discussing measures to restore operations and then reporting that to the headquarters and following subsequent orders.
In addition to increasing the effectiveness of BCPs by continuing to conduct such training at each business site and reflecting what is learned and issues that arise during the training in BCP documentation, procedure manuals, and checklist, we are strengthening our ability to respond to emergencies.
Ayabe Toyo Rubber Co., Ltd. BCM Training
Information Security Efforts
In line with its information security policy and information security management rules, the Toyo Tires Group implements information security measures to prevent various problems such as infections by computer viruses that could lead to information leaks and system shutdowns.
As for actual measures, the Company continually works to improve and strengthen efforts in order to secure an appropriate information system for the changing environment both inside and outside the company, and this includes conducting in-house educational activities, spreading awareness of information security guidelines, creating systems to detect computer viruses, and developing response rules in case virus are detected.