Ensuring Proper Business Conduct and Transparency

1. 1 To evaluate the effectiveness of internal control relating to the Board of Directors, a questionnaire is given to all 18 directors and corporate auditors. It covers each of the nine items in the Basic Policy on Internal Control System set in accordance with the provisions of the Companies Act of Japan.
   In this way, internal control effectiveness is evaluated by all directors and corporate auditors, and then monitored as a KPI of the internal control system to be shared with stakeholders.

The Toray Industries Board of Directors holds regular Toray Group Business Strategy Discussion sessions to confirm the direction of and progress on management strategies for Toray Group sustainable growth and creation of medium- to long-term corporate value. Eight discussion sessions were held in fiscal 2023.
In addition, Toray Industries uses external programs to provide directors with the data and latest information that provide the basis for improving and reviewing corporate governance so that they have all of the knowledge needed to appropriately execute their duties and fulfill their role. Moreover, to enable outside directors and outside corporate auditors to gain a deeper understanding of the Group, roundtable meetings between outside directors and company executives and managers are held regularly. Opportunities are also provided for plant tours and participation in officer and executive training.
Toray Industries operates a Basic Policy on Corporate Governance based on Japan's Corporate Governance Code, and regularly publishes a Corporate Governance Report, which also summarizes the status of internal control systems.
Toray Group maintains and improves group governance by establishing group-wide rules and regulations concerning ethics and compliance, efficient execution of duties, preservation and management of information, risk management, and other matters, in addition to holding regular meetings to receive direct reports on the management status of subsidiaries.
Toray Industries has set a KPI for “Board of Directors’ positive assessment of the implementation of the Basic Policy for Internal Control Systems.” The result for fiscal 2023 was 96%, surpassing the target of 90%.