Standards for Judging the Independence of Outside Directors/Corporate Auditors
Toray Industries, Inc. (the “Company”) established the following standards for the independence of outside directors and outside corporate auditors (collectively, “Outside Director/Corporate Auditor”) to ensure the objectivity and transparency of governance.
If an Outside Director/Corporate Auditor or a candidate for Outside Director/Corporate Auditor is found not to fall under any of the following items as a result of an investigation of the candidate performed by the Company to a reasonably practicable extent, the Company shall judge that he/she possesses independence.
- An executive (Note 1) of the Company, its subsidiaries, or affiliated companies (collectively, the “Group”) or a person who has been an executive of the Group in the past 10 years.
- A current major shareholder of the Company (Note 2) or an executive thereof.
- A party of which the Group directly or indirectly holds 10% or more voting rights out of the total number of voting rights, or an executive thereof.
- A major client or supplier (Note 3) of the Group or an executive thereof.
- A person who belongs to an audit company acting as the independent auditor of the Company or Group companies.
- A person rendering professional services, such as a consultant, attorney-at-law, or certified public accountant, who receives a large amount of monetary consideration or other property (Note 4) from the Group besides remuneration as a member of the Board or corporate auditor (if the person receiving such property is a body such as a legal person and partnership, including a consulting firm, legal firm, or accounting firm, a person who belongs to such body).
- A person who receives a large donation (Note 5) from the Group (if the person receiving such large donation is a body such as a legal person and partnership, an executive thereof).
- An executive of a company in which an executive of the Group is elected as a member of the Board or corporate auditor.
- A person who has fallen under any of items 2 through 8 above in the past three years.
- If a person who falls under any of items 1 through 8 above is an important person (Note 6), a spouse or relative within the second degree of kinship thereof.
- Any other person who is likely to have conflicts of interest with general shareholders and is subject to circumstances reasonably deemed unable to fulfill his/her duties as an independent Outside Director/Corporate Auditor.
- An “executive” means an executive director, executive officer, operating officer of a legal person or other body, or other person or employee similar thereto. When judging the independence of an outside corporate auditor, a non-executive director is included.
- A “major shareholder” means a shareholder who holds shares with 10% or more of voting rights in his/her own name or another person’s name at the end of the most recent fiscal year of the Company.
- With respect to a “major client or supplier,” in order to enable a substantial judgment of the degree of a possible conflict of interest, the Company shall examine the importance of the transactions for both the Group and the counterparty using an appropriate indicator and disclose summaries of the results.
- With respect to a “large amount of monetary consideration or other property,” the Company examines the importance of the monetary consideration, etc. for both the Group and counterparty using an appropriate indicator and discloses summaries of the results.
- With respect to a “large donation,” the Company examines the importance of the donation for both the Group and recipient using an appropriate indicator and discloses summaries of the results.
- An “important person” means an executive director, executive officer, operating officer, or an employee with a senior managerial position of General Manager or higher.