Corporate Governance

Corporate Governance

Spreading the Philosophy

As of January 1, 2017, the Toyo Tire Group has formulated a new philosophy which will be the basis for the work of all corporate officers and employees, and measures are implemented to spread the philosophy among all employees.
We have positioned the “Corporate Creed,” the important founding spirit that we will maintain into the future, as the overarching concept; put into words our significance in society in the form of “Our Mission”; and clearly specified the vision for the company that we should strive for in that mission as “Our Vision.” We also established “Our Fundamental Values” as a foundation for ideas that all corporate officers and employees should value equally.
In order to spread the philosophy, we have created opportunities for the Company’s corporate officers and general managers to discuss it with subordinate employees at our business sites and affiliated companies in Japan. At overseas affiliated companies, our president visits the companies himself and explains the philosophy.
All initial in-house training programs start with a session on management philosophy in order for everyone in the Toyo Tire Group to understand such philosophy well. In FY2019, Toyo Tire Corporation organized a management philosophy training session for officers and division general managers as well as one for department heads. In the latter session, department heads were given case studies to understand the importance of spreading visions and strategies at workplaces, as well as group work where they shared what they are doing to spread the management philosophy at their workplaces. The session proved to be a valuable opportunity for them to share the current status and issues at other departments, which then helped them to increase their drive to spread the management philosophy more.
Three years after our management philosophy was established, we have finally begun to see increased recognition and understanding of it within the company. We will continue our efforts to spread our management philosophy even further until fulfilling it becomes part of our subconscious.

Work of the Board of Directors

TOYO TIRE holds a regular board of directors meeting once every month to make decisions on important matters and supervise the status of business execution by Directors. In FY2019, a total of 18 meetings, including extraordinary ones, were held. Outside Directors attend the board of directors meetings and other important meetings to offer their opinions on deliberations to fulfill their responsibility to monitor and supervise management.
Since FY 2017, the Company has been conducting an analysis and evaluation of the effectiveness of the Board of Directors as a whole by conducting a signed survey of directors and Audit and Supervisory Board members regarding the operation, composition, activities, etc. of the Board of Directors. The compilation, analysis, and evaluation of the surveys are entrusted to a third party in order to ensure impartiality. The summary of the results of the survey conducted in FY 2019 along with how we will respond going forward are below. Based on this content, we will continue to further improve the functionality of the Board of Directors.

〈Overview of the analysis and evaluation results and future steps〉

  • Given the progress in improvement as evidenced by higher evaluation over the previous year in many parameters, we believe that the effectiveness of the board of directors as a whole is ensured. Supervision of management, in particular, has earned a high rating for the third consecutive year.
  • Meanwhile, a suggestion was raised that discussions at the board of directors meetings be further vitalized and that diversity be promoted more aggressively.
  • Under the new management structure, we will continue improving any existing issues.

Effective on February 19, 2020, we chose to establish a Nomination and Compensation Committee, an advisory body for the board of directors that deliberates on personnel affairs, compensation, and other matters concerning Directors and offers advice, proposals, and recommendations to the board of directors. With the establishment of the Nomination and Compensation Committee, more than half of whose members are Outside Directors, we will further enhance independence, objectivity, and accountability of the board of directors’ functions for personnel affairs, compensation, and other matters concerning Directors, thus reinforcing the corporate governance structure.

Strengthen the Risk Management System

As the risk manager, in our Group, the person in charge of the Corporate Control Department is responsible for parties below the risk management officer appointed for each risk and the risk management system as stipulated in the Risk Management Rules. The main risks are managed through established activities not only to evaluate and analyze potential risks for the Group during non-emergency times and to reduce the possibility of them occurring, but also to minimize damage during emergencies and to promptly restore business.
The risk management officers have the following roles related to the main risks they are responsible for.

  • [1] Develop and maintain various systems, measures, rules, and risk management systems, and compile and manage Risk Management Manuals.
  • [2] Report on (i) the creation status for the risk management system, (ii) evaluation and improvement plans for the risk management system, and (iii) the implementation status of the risk management system improvement plans to the Risk Management Committee at least once a year.
  • [3] Immediately report to the risk manager if a report about concerns of an emergency are received by a business site or division manager.
  • *Risks covered by the Risk Management Committee: disasters/accidents, quality, purchasing, legal violations, information management, labor, and issues of rubber bearings

TOPIC
Toyo Tire Group’s Responses to the Effects of the Spread of the Novel Coronavirus Infection

In response to the worldwide spread of the novel coronavirus infection that began at the end of 2019, pursuant to the Risk Management Rules, we established the Emergency Countermeasures Committee (upgraded to the Emergency Countermeasures Headquarters in February) in January 2020 to implement effective measures by gathering information and having a series of discussions on how we should deal with the pandemic.
In the wake of the spread of the novel coronavirus infection, the Toyo Tire Group is taking measures that place top priority on the assurance of health and safety of our employees and stakeholders, as well as the maintenance of employment.
In more concrete terms, we not only take measures to prevent employees and visitors to the company from getting infected but also have expanded the scope of the telecommuting system, which was introduced in Japan as part of the ongoing work style reform, and even closed our business bases/sites with administrative departments.
Meanwhile, Toyo Tire Corporation continues to recruit new graduates for FY2021 as originally planned by creating and ensuring opportunities to communicate with prospective employees through online company information sessions and group/individual interviews.

BCP Development and BCM Training

The Toyo Tire Group is also systematically promoting work to develop business continuity plans (BCP) and conduct business continuity management (BCM).
In FY2019, we conducted a business continuity management (BCM) drill at 13 of our bases/sites in accordance with their business continuity planning (BCP). At Toyo Soflan Co., Ltd., a drill is conducted every year on the response by the Emergency Countermeasures Headquarters immediately after a disaster. In FY2019, they also conducted a drill on their responses one week after a disaster, in which each department reported their priority responses in a simulated situation and discussed issues for continuing business operations under the instructions from the Director of the Emergency Countermeasures Headquarters.

TOPIC
TTHA Group: Activate BCP “WFH Plan” for COVID-19 pandemic in the United States

Within one day of notifying employees of the office closure due to COVID-19, the TTHA group activated its work from home plan (“WFH Plan”) and had all of its office and administrative staff working from home and fully functioning. All IT and communication systems and administrative and operational procedures operated as planned. Work from home employees were able to access information, communicate effectively, and perform their job functions, with no measurable loss in productivity. The WFH Plan required the use of a preexisting VPN and the issuance of laptop computers to all work from home employees. Approximately 85 laptop computers were purchased to achieve this goal. The TTHA group was able to implement the WFH Plan with no impact to customer service by rerouting calls directly to the homes of the CSRs and maintaining a limited workforce at warehouse locations to ensure timely product shipment. Social distancing, disinfecting, enhanced PPE, and other preventive care measures specific to COVID-19 were quickly implemented at all warehouse and manufacturing locations where work from home was not a viable option.

Dialogue with Shareholders and Investors

The Company holds a general meeting of shareholders once a year and a quarterly financial result briefing. During the first half and full year briefings, our top executives provide detailed business information, including financial results, future business outlook, business environment, and market trends, to institutional investors and securities analysts. In addition to announcing financial results, there were also small meetings attended by the president and other parties as well as several engagement opportunities for managers and institutional investors.
In addition, efforts are made to improve understanding of the Group’s management by providing opportunities each quarter for IR staff to respond to the particular concerns of institutional investors and analysts (handling individual inquiries). Furthermore, the Group actively works to respond to increasing requests by the investors outside Japan, which includes enhanced responding to individual inquiries except during the quiet period and conducting overseas roadshows.
In FY2019, members of our investor relations (IR) team held dialogues with more than 360 shareholders and investors from 260 institutions. In addition, our board members organized two small meetings on the Toyo Tire Group’s new growth strategy announced in August 2019, which were attended by a total of 25 institutional investors and others from 22 investment houses. The opinions and requests of shareholders and investors are regularly used as feedback for management and in-house related departments.

  • Briefing Briefing

Expanding Communication Tools

The group publishes an annual report as a communication tool to provide various information, including top management’s thoughts on the Group’s business, business strategy and objectives, and efforts to achieve those, to the various stakeholders, including Japanese and overseas institutional investors and to deepen understanding of and interest in the Group. In the 2016 annual report, we more thoroughly covered not only the growth story and business strategy in the “Mid-Term ’17” but also the corporate governance system, compliance system, and efforts related to human resource development and the environment.
On our website, there is an Investor Relations page for communicating the Group’s latest business information in a timely manner.