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Toray Receives Investigation Report from Expert Committee and Announces Response Measures

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Apr. 12, 2022

Toray Industries, Inc.

Tokyo, Japan, April 12, 2022 – Toray Industries, Inc., announced today it has received a report from the expert committee set up to investigate how certain resin products were inappropriately identified by Toray as receiving certification from UL LLC (hereinafter, “UL”). The committee was formed on January 31, 2022, the same day the announcement of inappropriate actions was made. The report sets out the findings of the thorough investigation along with recommended measures to prevent recurrence. These, along with the response measures that Toray intends to implement, are outlined below.
1.  Recommendation points and response measures to be implemented
Toray takes the recommendations of this expert committee seriously and will implement the following measures.
  (1)  Enhancing compliance awareness 
(a)  Improving compliance education
Promote thorough training group-wide concerning private-sector certification and standards based on the recommendations.
(b)  Incorporating quality assurance contribution into performance reviews
Update the human resources evaluation system with more emphasis on compliance contribution, including quality assurance efforts.
(c)   Sharing recurrence prevention activities
Publicize the progress made with recurrence prevention measures on Toray corporate website.
(d)  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.
(2) Establishing work procedures and an education system for UL-related operations
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.
(3)  Transferring personnel between business divisions and other interaction
Implement personnel changes of quality assurance department managers across business divisions, and personnel changes across business divisions at the management level. Conduct training sessions using this case as a teaching tool, attended by employees and executives from different business divisions.
(4)  Establishing a system to confirm UL compliance by the internal quality assurance organizations and/or external organizations
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. 
(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)
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.
(6)  Establishing system to ensure misconduct is reported to Toray administrative organizations and other parties
(a)  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.
(b) 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.
(c) 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.
2. Discipline of responsible individuals
  The sustained and systematic inappropriate actions have caused enormous inconvenience to society, including customers, and have significantly damaged the company’s reputation. To determine executive responsibility, Toray’s Governance Committee (which has a majority of outside directors and is chaired by an outside director) will discuss the scope of officer responsibility and the details of appropriate disciplinary action, and then report to the Board of Directors.
As for individuals involved in other inappropriate actions, Toray will determine their responsibilities and take strict disciplinary measures based on internal rules.

With regard to its recommendation in the investigation report on improving compliance awareness, the expert committee highlighted the need for heightened and continued commitment by the senior management team. Regarding “ethics and fairness,” which is one of the top priorities for Toray Group management, the senior management team takes seriously the fact that it had not sufficiently demonstrated to Toray workplaces its commitment to these values and is committed to improving its awareness and conduct. The aim is to convey to everyone in Toray Group workplace that compliance is the top management priority. To achieve this, the management team will take every opportunity to directly demonstrate its compliance commitment to employees and will strive to foster an open corporate culture that values direct employee feedback. 
Turning to product safety, Toray is urgently checking if there are any problems with customer products due to Toray resin materials. The Company is not aware of any major issues at this time, but will continue to accelerate confirmation efforts.

In addition, the Company is separately verifying other certification beyond UL for Toray products and will take similar measures if any problems are found.
Toray will continue to release information on progress made concerning the recurrence prevention measures outlined above, as well as product safety confirmation, and UL certification reacquisition. Toray will also continue to disclose other important information as appropriate.

Toray deeply regrets having allowed this situation to occur, and once again sincerely apologizes for all the concern and inconvenience caused.
Going forward, senior management will take responsibility for ensuring that all officers and employees work together to thoroughly implement all the necessary measures to prevent any recurrence of the problem, including the measures outlined above. Toray is determined to restore complete confidence in its integrity and to once again demonstrate what Toray can achieve. Your continued support is deeply appreciated.

[Attachment] Detailed Recommendations of the Expert Committee (excerpt) ... One copy

* For details about the status of UL certification, information in the following specially established webpages on Toray resin product sites will be regularly updated.
Special webpages to respond to inquiries: