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Updated on May 18, 2023

Progress on Toray’s Recurrence Prevention Measures in Response to Recommendations of the Expert Committee

In response to the recommendations in the expert committee report released on April 12, 2022, Toray is implementing a series of measures to prevent recurrence of this problem.

1. Enhancing compliance awareness

Recurrence prevention measures	Implementation plan	Status
(1) Improving compliance education
Promote thorough training group-wide concerning private-sector certification and standards based on the recommendations.	May 2022 Create education materials	May 2022 Completed
	June 2022 Introduce training	June 2022 Started training in Quality Assurance Division June 2022 Introduced and ongoing in in-house training August 2022 Completed training in Quality Assurance Division November 2022 Implemented the Quality Assurance Compliance Month Continue operation in FY2023
(2) Incorporating quality assurance contribution into performance reviews
Update the human resources evaluation system with more emphasis on compliance contribution, including quality assurance efforts.	June 2022 Review evaluation content	June 2022 Completed
	1st half FY 2022 Introduce updated system	1st half FY 2022 Started management by objectives September 2022 Completed evaluations for 1st half FY 2022 2nd half FY 2022 Started management by objectives March 2023 Completed evaluations for 2nd half FY 2022 Continue operation in FY2023
(3) Sharing recurrence prevention activities
Publicize the progress made with recurrence prevention measures on Toray corporate website.	May 2022 Launch special website	May 2022 Launched special website June 2022 Launched in-house site Now in operation
(4) Heightened and continued commitment by the senior management team
Ensure senior managers continually communicate to employees the importance of compliance while declaring their own personal compliance responsibility and mission.	April 2022 Introduce series of measures	April 2022 Started Appropriately announce of top message - Each executive committee (every month) - Korea Conference (April, October) - Americas Conference (April, October) - China Conference (June, December) - Europe Conference (July, January) - Ethics and Compliance Committee (July, February) - Japanese Subsidiaries and Affiliated Companies Conference (August) - ASEAN Conference (September, March) Continue operation in FY2023
	June 2022 Declare compliance commitment	June 2022 Declared July 2022 Disclosed on in-house magazine December 2022 Declaration of personal behavior regarding compliance by executives

2. Establishing work procedures and an education system for UL-related operations

Recurrence prevention measures	Implementation plan	Status
Document the proper operation procedures and the responsibilities and roles of the relevant personnel. Promote training on UL rules, and obtain third-party audits and verification of Toray's certification management system.	April 2022 Hold UL seminars	April 2022 Held UL seminar May 2022 Held UL seminar in addition May 2022 Held CMJ seminar
	June 2022 Introduce operation procedure manual	June 2022 Started operating FUS procedure manual July 2022 Started operating certification rule book Continue operation in FY2023
	July 2022 Launch certification management system	July 2022 Started certification qualification system Continue operation in FY2023
	3rd quarter FY 2022 Conduct third-party audits	October 2022 UL verification audit, C-CAP (customer corrective action process) November 2022 UL verification audit, C-CAP (#2nd) December 2022 UL verification audit, C-CAP (#3rd) December 2022 UL verification audit, C-CAP pass/exemption

3. Transferring personnel between business divisions and other interaction

Recurrence prevention measures	Implementation plan	Status
Implement personnel changes of quality assurance department managers across business divisions, and personnel changes across business divisions at the management level.	June 2022 Establish personnel transfer plan	June 2022 Changed director in charge
	2nd quarter of FY 2022 and beyond Introduce series of measures	November 2022 Started personnel transfer plan Ongoing execution
Conduct training sessions using this case as a teaching tool, attended by employees and executives from different business divisions.	April 2022 Start to include case studies in training sessions	April 2022 Started Introduce in training sequentially - Toray Trainee Program for section managers outside Japan (June) - Special training of compliance (June) - Newly appointed manager training (July, August, September, November) - General manager training (August, October) - Management skills development seminor for section managers (September, October, December) - Sales/Marketing Practical Seminars (September, December) - Workshop for Directors and Executive Board Members (November) - Technical Training Ⅰ - Toray Management School (July to February) - Toray Group Management School (June to February) - Toray Group Senior Management Seminar (March) Continue operation in FY2023

4. Establishing a system to confirm UL compliance by the internal quality assurance organizations and/or external organizations

Recurrence prevention measures	Implementation plan	Status
Document the specific role of the Quality Assurance Division for UL and other certification work, and obtain audits and verification that roles are being properly performed, from a third-party.	May 2022 Revise related guidelines	May 2022 Completed
	June 2022 Complete education	June 2022 Completed
	September 2022 Introduce revised guidelines	August 2022 Operation guideline fixed September 2022 Operation guideline started to apply Continue operation in FY2023
	December 2022 Conduct third-party audits	November-December 2022 External audit completed

5. Strengthening the organizational structure of quality assurance organizations (Monitoring and supervision of quality assurance sections activities by Quality Assurance Division and other internal and/or external organizations)

Recurrence prevention measures	Implementation plan	Status
Create mechanisms for the Quality Assurance Division to audit each of its departments, and receive operational audits of the entire Quality Assurance Division from an external organization.	June 2022 Complete to make standards	June 2022 Completed standards of audit August 2022 Completed audit planning September 2022 Started audit in division December 2022-March 2023 Mutual audit in progress Continue operation in FY2023
	December 2022 Conduct third-party audits	November-December 2022 External audit completed

6. Establishing system to ensure misconduct is reported to Toray administrative organizations and other parties

Recurrence prevention measures	Implementation plan	Status
(1) Clarifying rules for cases in which employees become aware of misconduct or suspected misconduct
Clarify the obligation to report misconduct in the quality assurance and product safety management regulations.	May 2022 Revise the regulations	May 2022 Completed Now in operation
(2) Establishing system to encourage use of whistleblowing hotline
Improve the guide on how to use the whistleblowing hotline, including by providing specific examples of reporting.	June 2022 Revise the regulations and guides	June 2022 Completed June 2022 Publicized on in-house magazine
(3) Improved and continued internal surveys (Toray Group-wide surveys) by quality assurance organizations
Ensure that all employee responses, including comment box details, be sent directly to the Quality Assurance Division. In Group-wide surveys, clearly state that violations of private-sector certification rules fall within the scope of the survey.	June 2022 Improve survey method	June 2022 Survey contents fixed July 2022 Survey collecting method fixed October 2022 Survey procedure fixed
	3rd quarter FY 2022 Start the surveys	November 2022 Survey implementation December 2022-April 2023 Questionnaire aggregation/confirmation completed Continue operation in FY2023