Enhancing People-Centric Management

1. People-Centric Management
   Accompanying the May 2020 announcement of the Long-Term Corporate Vision, TORAY VISION 2030, Toray Group organized the principles it has followed since the beginning in the form of the Toray Philosophy. Within these principles, people-centric management was positioned as a key part of the Corporate Culture, which forms the foundation of the Group’s Corporate Philosophy.
   People-centric management involves efforts to develop dedicated talent capable of creating new value, and to foster a group-wide environment where these professional individuals can grow and work with motivation.
   This is a basic strategy that places human resource development, a focus since Toray's early days, at the core of management. The aim is to maximize corporate value and ultimately contribute to society.
2. Enhanced People-Centric Management
   “Enhanced people-centric management” is an updated version of the original people-centric management approach. This revision was made in response to recent changes in employment dynamics, such as increasing uncertainty in the business environment, diversification of personal values, and a growing desire for career autonomy.
   The revised approach focuses on embracing diverse human resources and values, developing talent and organizations that can adapt to change, and fostering Toray Philosophy engagement and the development of fulfilling careers. The Group’s human resource strategy aims to both maximize corporate value and enhance employee well-being.

Employing a Diverse Workforce

Toray Group employs talented human resources with high aspirations who can play an active role in global business, inclusive of gender and whether employees were hired out of university or mid-career.
Since 1998, Toray Industries, Inc. has been expanding its efforts to recruit a diverse human resource population and has hired 118 non-Japanese as regular employees as of fiscal 2023. The Company actively recruits non-Japanese students who are studying in Japan, and Japanese students who graduate from universities abroad. Then, it seeks to build a work environment where all employees are able to fully demonstrate their individual abilities and perform to their utmost potential. In addition, Toray is actively pursuing mid-career hiring, while providing follow-up support for these hires, including additional training after joining the company.

Number of Employees Hired in Fiscal 2019-2023 (Toray Industries, Inc.)

Result		2019	2020	2021	2022	2023
New graduates	Men	244	176	123	110	172
	Women	44	36	38	20	40
	Total	288	212	161	130	212
Mid-career hires	Men	37	9	13	53	121
	Women	8	2	6	7	20
	Total	45	11	19	60	141

Recruiting Talent in Vietnam
[Toray Industries (H.K.) Vietnam Company Limited (THKVN)]

Toray Industries develops well-designed training programs and systematically executes diverse training programs to enhance management, sales, production technology, and specialized skills, and to better equip employees to address globalization. These programs cover all levels of employees and fields, aiming to develop future management candidates while expanding and educating the base of core staff ready to employ their strong capabilities to lead on the front lines.
In recent years, Toray Industries has focused on reorganizing its training system to further enhance the Company's human resource development. Management Training for Executive Candidates was created as a new program with the aim of developing senior management successors. Two other new programs, management training for general managers and management training for managers, were established in order to enhance organizational management capabilities. At the same time, the Company has launched multiple programs to train personnel involved in digital transformation (DX) initiatives, as part of specialized field-specific training for technology and sales personnel. In fiscal 2023, training expenditures per employee at Toray Industries stood at 146,300 yen, compared to 132,000 yen in the previous fiscal year. (Since much of the training is now being done in-house, starting in fiscal 2023 the calculation also includes costs related to in-house training.)
Moreover, to allow everyone regardless of age to regularly update their abilities and skills, Toray is working to enhance its professional development programs for employees, including the expansion of eligibility for Challenge Courses (subscription-based e-learning). In addition to training, the Group is adopting various personnel programs to develop an organization in which human resources who are ready for new challenges can play a greater and more active part in the Company.

Company-Wide Training Course Enrollment in Fiscal 2023 (Toray Industries, Inc.)

Training category	Persons enrolled			Time dedicated to training per employee (hour)1
	Men	Women	Total
Management	1,002	168	1,170	38.8
Technical	726	86	812	29.5
Sales, marketing, and administration	186	50	236	24.9
Global	70	23	93	53.1
Total	1,984	327	2,311	34.7

• 1 Time dedicated to group training at the Toray Human Resources Development Center. It does not include time for correspondence learning or study abroad, etc.

Toray School of Technology and Business Administration Develops Leaders to Improve Frontline Capabilities Across the Toray Group

Personnel System (Toray Industries, Inc.)

Management-by-objectives system2	Each employee establishes annual objectives. At the end of the fiscal year, employees and their supervisors meet to review accomplishments and the extent to which they were able to meet their objectives.
Personnel appraisal system2	Designed to facilitate a fair appraisal of employee contributions in terms of duties, responsibilities, capabilities, and performance3. In order to link ethics and compliance with individual performance reviews and compensation, evaluation items concerning safety, CSR, quality assurance, and compliance have been added to performance appraisal.
Individual meeting system2	Employees meet with their supervisors twice a year in a one-on-one setting. Supervisors provide consultation on employee performance and new objectives.
Self-assessment system for managers, occupational specialists, and G-Course employees	Employees are surveyed annually on topics concerning work experience and desires for interdepartmental transfer. Surveys can then be linked to individual personnel transfers and placement.
Career assessment system for G-Course employees	Employees participate in a regular review consisting of presentations of daily operations and personnel interviews in order to focus on the direction of their future growth.
Job opening system	Employees are given an opportunity to apply for jobs inside the Company and proactively develop their career, while ensuring optimal staff assignment.

• 2 Applies to 100% of managers, occupational specialists, and employees pursuing G-Course and S-Course career paths.
  G-Course: A career path for Toray Group executive or upper-level professional candidates
  S-Course: A career path for manager, supervisor, or specialist candidates
• 3 Including CSR initiatives

Toray Industries has introduced career path worksheets as a human resource development tool designed to promote employee growth. These worksheets encourage employees to reflect on their past work experience and the level of skill required in their field, as well as facilitate career-related discussions through interviews with supervisors and subordinates.
The career path worksheets were first introduced in fiscal 2020 for employees pursuing G-Course career paths in sales and corporate administration. In fiscal 2021, their use was extended to technical G-Course employees and, as of March 2022, has been expanded to all G-Course employees. Since fiscal 2022, Toray Industries and some of its affiliated companies have expanded eligibility for the career path worksheet program.

Toray Group implements training in order to systematically develop future management candidates. Numerous employees who have undergone the training are already active in management positions. The Group holds Management Training for Executive Candidates, which was created as a new program in fiscal 2021 with the aim of developing senior management successors.

Strategies for Developing Future Management Candidates

Program	Participants	Purpose	Year started	Number of Participants in FY2023	Total participants through FY2023
Management Training for Executive Candidates	Department managers of Toray Industries	Develop management leaders at Toray Industries and group companies	2021	12	34
Toray Management School4	Section managers of Toray Industries	Develop future management candidates at Toray Industries and group companies	1991	20	620
Toray Group Management School	Department managers of group companies in Japan	Develop management candidates focusing on group companies in Japan	2006	20	348
Toray Group Executive Seminar	Board members/officers of group companies outside Japan	Develop core staff at group companies outside Japan	2004	Not held	98
Number of employees who participated in programs to develop future management candidates (cumulative total)					1,100

• 4 As of July 2024, 15 of Toray Industries' 28 executive officers have completed the Toray Management School program.

The Toray Global HR Management (“G-HRM”) Fundamental Policy was established through a resolution of the Board of Directors. The goal of the policy is to manage human resources from a common perspective shared by the entire Group, thereby surmounting differences between countries, regions, cultures, customs, and individual companies.

Toray Group regards the development of core staff at its group companies outside Japan as one of its priority management objectives. The Group makes active efforts to promote employees locally hired at these companies (national staff) to executive management positions, as well as to key posts and management positions at Toray Industries' head office. In fiscal 2023, a total of seven core staff outside Japan help manage Toray Group, with two serving as vice presidents of Toray Industries and five serving as director (riji), a position that is equivalent in scope and level of responsibility to senior management.
In terms of human resource development and promotions, Toray Group has been working on a succession plan and personnel development plan based on a medium- and long-term perspective and drawing up its Medium-Term Human Resources Plan with the goal of implementing systematic personnel assignments to ensure that core staff can tackle important business issues. The Group implements human resources strategies designed to support business strategies by verifying the availability of successor candidates for core positions and developing individualized development plans for future management candidates, including for core staff outside Japan. In addition, the Group is systematically fostering human resources by offering career development opportunities such as domestic and international job rotations.
Human resource development is systematically implemented using both on-the-job and off-the-job training. Off-the-job training consists of training implemented by each group company outside Japan. This is combined with grade-specific training programs held in Japan to ensure understanding of management principles and policies. These are linked with personalized long-term development plans. Toray Group, with direct involvement from the head office, is developing and regularly providing management training courses outside Japan specially designed for the particular circumstances and needs of group companies in each respective country.

Fiscal 2023 Training Courses Held for Core Staff Outside Japan

Toray Group Executive Seminar (TGES) (Toray Industries, Inc.)

The Toray Group Executive Seminar (TGES) was established to develop executive human resources working at Toray Group companies outside Japan. It is designed to enhance Toray Group’s organizational strength by allowing participants to improve their understanding of the Toray Philosophy, the Long-Term Corporate Vision, the Medium-Term Management Program, and their mission and responsibilities as executives within the Toray Group. Learning takes place through formal discussions and informal conversations with the management team of Toray Industries. Since its inception in 2004, the program has generally been held every other year. In fiscal 2023, in-person training was held for the first time since the COVID-19 travel restrictions were lifted, marking the eighth such seminar. Fifteen participants from 15 group companies across Europe, the Americas, and Asia took part.
Through lectures and Q&A sessions with the president and the general manager of the Corporate Strategic Planning Division, participants deepened their understanding of the mindset, attitude, and fundamental thinking required of Toray Group executives. In sessions provided by external lecturers, the participants learned about leadership in the context of cross-cultural understanding, reflected on their own approach to management in their current workplace culture, and explored opportunities to strengthen their own group company in a way that is consistent with Toray's corporate culture.
As the fiscal 2023 seminar was conducted in person, it also provided an opportunity for dynamic interaction between the participants and became a meaningful way for them to enhance their personal networks.