Corporate Governance and Management Transparency
Continually revise management systems, strengthen internal controls and strive for timely and appropriate information disclosure as part of efforts to fulfill the company’s social responsibilities
Fifth CSR Road Map goals
- Enhance management transparency, continually reflect stakeholder feedback in management, and fulfill responsibilities to explain corporate activities
- Perform monitoring based on the Basic Policy for Internal Control Systems, in accordance with Japan’s Companies Act
- Establish a group-wide management system for social responsibility, and stimulate initiatives by expanding training and education, etc.
From the outset, one of the Toray Group’s managerial principles has been that the purpose of a company is to contribute to society. The Group has developed a Management Philosophy that incorporates this principle.
The Group’s Management Philosophy is structured with the following components: the Corporate Philosophy, Corporate Missions, and Corporate Guiding Principles. The Corporate Missions specify the Group’s commitment “To provide our shareholders with dependable and trustworthy management,” and the Corporate Guiding Principles stipulate the Group’s commitment to “Obtaining the trust of society and meeting the expectations by acting fairly while maintaining high ethical standards and a strong sense of responsibility and maintaining transparency in management.”
In all of its corporate governance efforts, the Group’s basic policy is to live up to these philosophies.
Toray’s Management Structure
Toray’s Board of Directors is made up of 25 members (two of whom are outside directors). The Toray Group operates in a broad spectrum of business fields at a global level. Business management and decision-making, as well as oversight, require expertise related to the day-to-day operations of Toray worksites. To that end, the composition of the Board of Directors is designed to ensure that members bring a diverse range of perspectives to management oversight and decision-making based on their expertise in the Group’s businesses.
The Board of Corporate Auditors (four auditors, two of whom are outside corporate auditors) is entirely independent of the Board of Directors. Based on professional expertise in finance, accounting, and law, as well as an understanding of the Group’s businesses, the Board of Corporate Auditors exercises oversight over directors’ execution of their duties.
In December 2015, the Toray Group formed the Governance Committee to serve as an advisory body to the Board of Directors. More than half of the members of this committee are outside directors, including the committee chairman.
Remuneration for directors consists of monthly remuneration, a bonus and stock acquisition rights in the form of stock options; meanwhile remuneration for corporate auditors consists of monthly remuneration. The purpose of this structure is to ensure management transparency and fairness, and to provide enhanced incentives for the improvement of financial performance and corporate value in the short-, medium- and long-term perspectives. Furthermore, the amount of remuneration paid to directors and auditors is determined while taking into account the results of research conducted by a third-party organization to ensure an objective perspective.
Toray Group’s Corporate Governance System
Ensuring Proper Business Conduct and Transparency
With the revision of its Basic Policy on Internal Control Systems, Toray began disclosing the status of internal control in its business reports in 2015. The Company will continue to make every effort to apply internal controls to ensure legal compliance, efficient execution of duties, information storage and management, and risk management against losses.
Toray also employs internal guidelines on information disclosure and strives to secure management transparency, using its own indicators to measure information disclosure. As shown above, Toray reported a 76% achievement rate in fiscal 2015, slightly below its target.
In December 2015, Toray formulated its Basic Policy on Corporate Governance based on Japan’s Corporate Governance Code and publicly released a Corporate Governance Report containing the information required.
Corporate Governance Report (Items)Updated on June 29, 2016
- Ⅰ. Toray’s Basic Policy on Corporate Governance and Capital Structure, Corporate Attributes and Other Basic Information
- Ⅱ. Organization of Management related to Management Decision-Making, Execution of Duties and Oversight, and other Corporate Governance Structures
- Ⅲ. Implementation of Measures for Shareholders and Other Stakeholders
- Ⅳ. Items regarding Internal Control System
- Ⅴ. Others
Dialogue with Labor Unions
Toray holds meetings of the Central Labor and Management Council twice a year. The meetings are attended by directors at the senior vice president level and higher and labor representatives at the union head level and above. In addition to briefing the union on management information, the meetings facilitate ongoing dialogue with the union. Resolution of labor issues is undertaken at separate Labor and Management Council meetings. As of March 2016, Toray Workers’ Union membership stood at 8,451 workers.