CSR Guidelines & Activity Reports - Corporate Ethics and Legal Compliance

Establishing a Corporate Culture of Total Respect for Corporate Ethics and Legal Compliance

Governance

Corporate Ethics and Legal Compliance Code of Conduct and Handbook

The Corporate Ethics and Legal Compliance Code of Conduct is a strict set of standards that every Toray Group executive and employee closely follows when performing corporate activities. In the event that a violation is discovered, strict discipline is carried out in consultation with the Company's Rewards and Sanctions Committee.
At Toray Industries, Inc. and its group companies in Japan, all executives and employees, including contracted, part-time and dispatched workers, receive a copy of the Corporate Ethics and Legal Compliance Handbook, which explains expectations for proper conduct and Toray Group's Helpline, an internal whistle-blowing system. All employees are expected to be well-versed in the stipulations of this code.
Group companies outside Japan prepare national and regional editions of the Corporate Ethics and Legal Compliance Handbooks. Every executive and employee of group companies outside Japan receives a copy of the handbook to ensure that they are fully informed of the corporate policy.

Distribution rate of the Corporate Ethics and Legal
Compliance Handbook
100%
Toray Group

Main Content of the Corporate Ethics and Legal Compliance Handbook

  • Carrying out proper transactions based on free, fair, and transparent market competition (compliance with Japan's Antimonopoly Act, Subcontract Act, and Act against Unjustifiable Premiums and Misleading Representations)
  • Protecting the intellectual property rights of Toray Group and other companies
  • Respecting local laws and regulations in all countries where Toray Group operates
  • Respecting human rights and prohibiting all forms of discrimination
  • Using proper accounting practices (complying with all relevant laws including Japan's Companies Act, all tax-related laws, and the Financial Instruments and Exchange Act)
  • Avoiding conflicts of interest and disclosing them when they arise
  • Complying with Japan's Foreign Exchange and Foreign Trade Act, Political Funds Control Act, and Public Offices Election Act
  • Prohibiting any form of bribery involving stakeholders
  • Corporate Ethics and Legal Compliance Helpline, an internal whistle-blowing system
  • Framework for promoting corporate ethics and legal compliance at Toray Industries

Tax Compliance

Toray Group is committed to meeting its tax responsibilities in accordance with local and national tax laws and related rules, as well as to meeting international standards such as OECD guidelines. With the growth of international transactions, transfer pricing is increasing in importance. The Group endeavors to suitably allocate its income by calculating transfer pricing based on the arm’s length principle.
The Group refrains from arbitrary tax avoidance methods that make use of tax planning and tax havens to create artificially high tax savings.

Corporate Ethics and Legal Compliance Education

Group companies providing information and implementing education on major laws and regulations

■Reporting scope
Toray Group
■Target in fiscal 2018
100%

Result in fiscal 2018

100%

Toray Industries posts information on CSR and legal compliance on its corporate intranet. Toray Group circulates important information about legal and compliance matters that are highly relevant to its business in Japan and other countries. Group companies implement workshops to examine these matters and study cases of corporate misconduct in an effort to foster discussion in the workplace.
Since fiscal 2012, Toray Industries has provided online training courses on corporate ethics and legal compliance for all executives and employees, including contracted, part-time and dispatched workers. In fiscal 2018, the Company worked to raise awareness of human rights issues using case studies based on actual reports and consultations within Toray Group, reminding all participants that issues can occur in any department. Group companies in Japan are using these materials to implement their own training.

Expanding the Whistle-Blowing System

Toray Industries established the Corporate Ethics and Legal Compliance Helpline as a whistle-blowing system in fiscal 2003 and expanded the system to include all Toray Group companies in Japan in fiscal 2010. By introducing this system, the Company expects employees first to take the initiative in managing conduct with regard to corporate ethics and legal compliance, and to consult with a supervisor as soon as an issue arises.
Recognizing that reporting or consulting with supervisors may be difficult, the Company ensures that employees have access to alternative means of reporting and consulting such as via contact points at its offices, plants and labor unions or directly to the secretariat of the Ethics and Compliance Committee via phone or email.
In addition, each Toray Group company in Japan has established a Helpline contact point. Moreover, Toray Industries has also created an external Helpline contact point shared by all group companies in Japan to make it easier for employees to report and consult.
Each group company outside Japan has also established a Helpline contact point (internal, outside, or regional contact points). These Helpline contact points have been in operation at all companies since fiscal 2017. There were reports in several countries/regions, and Toray Group is working to resolve the issues, while carefully confirming circumstances in interviews and investigations.
Since fiscal 2016, Toray Industries has also maintained a an additional whistle-blowing system for group companies to directly report serious misconduct such as violations of antitrust laws and bribery, and it is working to inform all Toray Group companies about the system.
The number of inquiries (consultations) received through the hotline and the details of the cases are reported to directors by the Ethics and Compliance Committee, which convenes twice a year.

Group companies in and outside Japan that have established a whistle-blowing system
100%
Corporate Ethics and Legal Compliance Helpline System (Toray Industries, Inc. and its Group Companies in Japan)1
Corporate Ethics and Legal Compliance Helpline System (Toray Industries, Inc. and its Group Companies in Japan)
  1. 1 In addition to the above avenues, Toray Industries, Inc. receives reports on and addresses serious misconduct at all graup companies in and outside Japan.

Implementing Internal Legal Audits

Implementing internal legal and compliance audits of group companies, group companies improving problems found in internal legal and compliance audits in the previous year (%)

■Reporting scope
Toray Group
■Target in fiscal 2018
100%

Results in fiscal 2018

100%

(including companies under improvement)

In fiscal 2016, Toray Group adopted a group-wide system for self-inspections and mutual internal control audits. Designated divisions of Toray Industries and designated group companies in and outside Japan must receive an internal legal and compliance audit every other year.
In fiscal 2017, Toray Industries undertook an internal legal and compliance audit of the designated group companies outside Japan. In fiscal 2018, the Company confirmed the improvement status of problems found in the audit, verifying that 100% of the companies had made improvements (including companies under improvement). Internal legal and compliance audits were also implemented for the designated divisions of Toray Industries and its group companies in Japan within the fiscal year.