G: Compliance

• Challenge
• Our policy
• Action promotion system (as of April 2023)
• Grievance mechanism
• Main resources for promoting activities
• Activities

Challenge

• Instilling a sound corporate culture and solid business practices

Our policy

We ensure that all executives and employees within the Group prioritize compliance in their day-to-day operations.

Action promotion system (as of April 2023)

Compliance promotion system

The president of Toyo Tire Corporation has made compliance the absolute highest priority within Group management, and we are dedicated to expanding and improving compliance systems.
We set up the Compliance Committee as one of the special committees under the jurisdiction of the Executive Committee to consult and investigate ways to promote compliance. The Chief Compliance Officer (CCO), compliance officers (CO), and compliance leaders (CL) play a key role in promoting compliance under our compliance officer system.
The Compliance Committee, chaired by the CCO appointed by the Board of Directors, meets quarterly in principle, and reports the results of its discussions twice a year to the Executive Committee, which is supervised by the Board of Directors.
The status of compliance promotion is also reported to the Board of Directors as necessary.
The CCO has the right to investigate, issue instructions and orders (including the suspension of operations and shipments), and make proposals regarding compliance-related issues for the Group as a whole, and COs have similar rights within their individual divisions. CLs assist COs in promoting various activities in each workplace, and are expected to report any compliance concerns (including suspected issues) to their general manager and COs. When a concern is reported to a CO, an investigation is immediately launched and necessary action is taken, then a plan is developed to prevent reoccurrence. As a general rule, compliance concerns are disclosed within the company so that employees can be on the lookout for any similar issues, reconfirm legal regulations and company rules, and have a reference for how to respond if similar incidents do occur.

Preventing corrupt practices and bribery

The Group has established a Global Anti-corruption and Anti-bribery Policy, effective since 2019. We have determined some anti-corruption items in our CSR Procurement Guidelines, and ask all suppliers to ensure compliance. The Compliance Committee, Compliance & Legal Division, Procurement Division and the general affairs departments at each site are responsible for appropriately implementing initiatives regarding the operation, internal and external permeation, and monitoring of the basic policy.

• Global Anti-corruption and Anti-bribery policy

• * Within Toyo Tire Corporation

Grievance mechanism

• Reporting hotline (whistle-blowing system): For executives, employees and suppliers
• Customer Relations Department: For customers (consumers) and local communities
• Online inquiry form: For customers (consumers), shareholders and investors, and NGOs
• Labor-management Council Meetings: For employees
• Consultation Desk for Compliance with the Antimonopoly Act: For employees
• IR meetings: For shareholders and investors
• Harassment Advice Desk: For executives and employees

Main resources for promoting activities

Compliance officers (as of April 2023): 25
Compliance leaders (as of April 2023): 109

Activities

Instilling the Group Charter of Corporate Behavior and Code of Conduct

We have established the Toyo Tire Group Charter of Corporate Behavior as a set of common principles for all Group companies that ensure our business activities are conducted in good faith, and the Toyo Tire Group Code of Conduct to help each executive and employee implement the Charter. The Charter and the Code are reviewed when appropriate and any necessary revisions are resolved by the Board of Directors. Group companies located outside Japan use the Code of Conduct as a basis for formulating their own behavioral guidelines that reflect differences in local laws, regulations and customs.
To improve awareness of the Code in all Group members and strengthen compliance, we have published a Global Code of Conduct Handbook in nine major languages (Japanese, English, Russian, German, Italian, Chinese, Thai, Malay and Portuguese), detailing the basic conduct that we expect from each Group executive and employee.
In Japan, we conduct read-along training sessions for all executives and employees, including Group companies, of the Code of Conduct Handbook or the Supplementary Reader with familiar and specific examples for manufacturing or sales sites. Upon completing the training, each participant submits a written pledge to promote compliance.
Group companies outside Japan use the Code of Conduct as a guide for establishing their own standards of behavior that reflect differences in local laws, regulations, customs and other factors, and work to foster compliance awareness.

Training in different regions

Each Group company conducts training on themes that are relevant to their own compliance risks. For example, in 2022 a subsidiary in China held a seminar with an external lawyer focusing on the Civil Code of China, as well as a competition between division representatives on their knowledge of the Code of Conduct Handbook. One subsidiary in Mexico has established opportunities for monthly compliance training that touch upon a wide variety of themes in order to strengthen compliance.
At our Serbia Factory that opened in 2022, we created a Serbian-language version of the Code of Conduct Handbook, which was read through as a group with all employees, then conducted a workshop on improper conduct.

• Toyo Tire Group Charter of Corporate Behavior
• Toyo Tire Group Code of Conduct
• Code of Conduct Handbook

Conducting compliance awareness surveys

We conduct annual compliance awareness surveys to ascertain the degree of compliance-related awareness among employees and aid our future endeavors.

Whistle-blowing system

The Group has been operating a whistle-blowing system since 2006. We provide internal and external reporting hotlines that are available to executives, employees and business partners in Japan, and may be used anonymously. To customers and the general public, we offer a contact point operated by the Customer Relations Department and an online inquiry form.

Awareness of the reporting hotline in Japan

Preventing anti-competitive conduct

The Toyo Tire Group is building compliance frameworks and systems and promoting education and awareness-building activities to ensure thorough compliance with competition laws and regulations in individual countries. Specifically, we oblige our executives and employees in charge of sales to submit prior applications, follow-up reports and exclusion applications relating to any contact with competitors based on the Cartel Prevention Rules, as well as a written pledge regarding the upholding of antimonopoly laws. We also pursue various initiatives to ensure compliance with laws and regulations, such as establishing a Consultation Desk for Compliance with the Antimonopoly Act, getting the Audit Department to check the status of compliance with the Cartel Prevention Rules, and conducting training (including e-learning) for related parties.

Anti-corruption initiatives

The Group strives to ensure fairness and transparency as the foundation for conducting sound business activities. We know that discovering any corrupt practices or bribery would risk not only potentially huge fines or the detention of involved parties, but also significant damage to our corporate value through the suspension of transactions or the imposition of social sanctions. As such, we work hard to prevent any such acts as part of our corporate social responsibility. As part of our efforts, we have established the Global Anti-corruption and Anti-bribery Policy along with our Anti-bribery Rules and are developing activities to ensure these rules are instilled and properly operated in our business activities. In 2022, we conducted e-learning on anti-bribery themes for employees working for Group companies in Japan (who have a PC account).
The 2022 Corruption Perceptions Index (CPI) researched and published by the international NGO Transparency International assesses the risk of corrupt practices in markets where the Group has business sites. We believe we must pay particular attention to our business activities in countries where the CPI is assessed to be lower than 50.
To prevent the corrupt practice of insider trading before it happens, we also conducted anti-insider trading e-learning for management-level employees at Group companies in Japan.

• Global Anti-corruption and Anti-bribery policy
• 全球反腐败和反贿赂政策

Compliance violations

There were no criminal accusations of corruption in any incidents related to compliance in 2022.

Legal compliance in the environmental and socioeconomic fields

There were no sanctions imposed on the Group in 2022 for environmental or socioeconomic violations.

Violations relating to the health and safety impact of products and services

We are striving to prevent a reoccurrence of past frauds caused by Toyo Tire Corporation and its affiliates. As of the end of December 2022, we had started changing the seismic isolation rubber for buildings in 151 of the 154 target buildings, and had completed the replacement of non-conforming products in 151 of these buildings.
There were no violations relating to the health and safety impact of products and services in 2022.