G: Sound governance
- Our policy
- Responsible executive (as of April 2023)
- Action promotion system (as of April 2023)
- Grievance mechanism
- Main resources for promoting activities (2023)
- Corporate governance
- Engage in corporate management that meets societal needs and has a lasting positive reputation for value
The Toyo Tire Group practices the principles of Japan’s Corporate Governance Code in an appropriate fashion to ensure effective corporate governance. We established the Toyo Tire Group Charter of Corporate Behavior as a set of common principles for all Group companies to ensure we always prioritize the desire to be useful to society through proper working practices as the basis for our decision-making and pursue integrity in corporate activities to help realize a sustainable society. We also formulated the Toyo Tire Group Code of Conduct to assist all executives and employees in implementing the Charter of Corporate Behavior, and seek to instill that Code across the whole Group.
Responsible executive (as of April 2023)
Corporate Officer and Vice President of the Corporate Headquarters
Action promotion system (as of April 2023)
Corporate governance system
Our corporate governance system consists of the Board of Directors, which is responsible for decision-making and supervisory functions, and, under that, the Nomination & Compensation Committee, which acts as an advisory body to the Board of Directors on matters relating to personnel affairs, compensation and other matters pertaining to directors. We also have an Executive Committee that makes decisions on business execution, various special committees that deliberate and consult on individual fields, and an Audit & Supervisory Board, a body that audits the Board of Directors and the execution of directors’ duties. This system enables all these functions to be fully exercised.
The number of members on the Board of Directors is limited to 11 in order to ensure swift decision-making. It is essential to consider diversity in the Board composition in terms of gender, age, background, skills and other relevant factors to ensure a good balance of the knowledge, experience and capabilities required to effectively fulfill the Board’s roles and responsibilities.
We have introduced a monetary compensation scheme that involves the granting of transfer-restricted shares to internal directors as an incentive to consistently improve our corporate value and to promote a deeper sense of shared value with our shareholders.
We also manage any conflicts of interest in an appropriate manner. The outside directors we appointed are judged to have no conflicts of interest with general shareholders and have been registered as independent officers with the stock exchange. We commission regular external evaluations of the Board of Directors to ensure the Board and the various committees function well and effectively.
Governance structure (As of April 2023)
|No. of meetings annually
|Audit & Supervisory Board
|Standing Audit & Supervisory Board member
|Audits the execution of business by the Board of Directors and directors
|Board of Directors
|Chairman of the Board
|Decision-making and supervisory body
|Executive decision-making body
|Deliberates policies and strategies to strengthen and promote sustainability management and responses to the key sustainability-related issues of Toyo Tire Corporation and Group companies
|Chief Compliance Officer
|Deliberates and investigates ways to promote, enhance and strengthen compliance at Toyo Tire Corporation and Group companies
|Crisis Management Committee
|Vice president in charge of crisis management
|Deliberates agenda items concerning planning and management of measures against crises, and continuously conducts risk management
|Organization & Personnel Committee
|Deliberates key issues related to the organization and human resources
|Vice President of R&D Headquarters
|Deliberates important issues related to R&D (strengthening of our core competence technologies, that are our platform technology and leading technology, to realize the Group’s management vision and medium-term business plans, as well as important issues relating to technology in general)
|Quality Assurance Committee
|Vice President of Quality Assurance, Environment and Safety Headquarters
|Establishes basic policies and measures to promote and operate a unified quality assurance system across Toyo Tire Corporation and Group companies; deliberates responses to serious quality issues and implements policies, plans and other measures in departments responsible for quality assurance and other relevant divisions
|Investment & Credit Committee
|General Manager of the Corporate Administration Division
|Deliberates the investments and credit of Toyo Tire Corporation and Group companies
Internal control system
We determine our basic policy for building of internal control systems at Board of the Directors meetings and then put appropriate systems in place. We review the basic policy each year to reflect changes in our business environment and other factors. The Board of Directors resolves any reviewed items as we strive to develop and operate more effective internal control systems.
In addition to establishing and operating our reporting hotline for employees to report and consult directly on compliance issues that may develop into crisis events, we have created multiple reporting routes and established a system for conveying necessary information to the Group’s governance bodies.
- * Within Toyo Tire Corporation
- Reporting Hotline (Creating an Internal Control System) Targets: Employees, Business Partners
- Customer Relations Department Targets: Customers, Local Communities
- Inquiry Form (on the Website) Targets: Customers, Shareholders and Investors, NGOs
- IR meetings Targets: Shareholder, Investor
Main resources for promoting activities (2023)
- Total executive compensation (2022)
- Directors (9): 312 million yen *Maximum annual limit: 450 million yen
- Audit & Supervisory Board members (4): 55 million yen *Maximum annual limit: 80 million yen
- * Includes 14 million yen for transfer-restricted shares granted.
- Note: The above numbers of executives and total compensation include compensation of 65 million yen for six outside officers (outside directors and outside Audit & Supervisory Board members). Those numbers also include compensation for one director who retired in 2022.
- Note: The above total amount of compensation includes the provision of bonuses for officers recorded in 2022 of 110 million yen.
Activities: Corporate governance
Instilling our philosophy
Since establishing our philosophy in 2017, we have been working on ways to instill it in our executives and employees so that it forms the central core of their work.
Our philosophy puts into words the thoughts and beliefs that we value as a Group. It is structured with our Company Philosophy as the overarching concept that embodies our valued founding spirit that we shall continue carrying forward into the future. This is followed by Our Mission that defines our purpose within society, and then Our Vision that details the company we aim to be in order to achieve this purpose. Finally, the philosophy sets forth Our Fundamental Values as the foundation for ideas that we expect both our executives and employees to value equally.
We have also clearly indicated in our new Medium-term ’21 Plan, announced in February 2021, that the management plan itself was created to fulfill the company’s purpose of realizing this philosophy.
To continuously instill our philosophy in employees, we include a lecture on it in all initial internal training programs. Training for general managers includes case studies to understand the importance of promoting visions and strategies linked to our philosophy in workplaces, as well as group work where participants introduce how the philosophy is being instilled in their departments. These training sessions have become a valuable opportunity to improve awareness of instilling our philosophy by sharing issues and initiatives from other departments.
In follow-up training for new employees after their first year in the company, we have created opportunities for them to look back at their own duties and consider how they can embody our philosophy through their work. We have also recorded lectures on the background behind why we established our philosophy and the history of the company, which are stored in the video archive on the company intranet for viewing by both new graduate employees and mid-career employees.
Moving forward, we will continue creating opportunities such as group work for employees in different positions and at different levels to consider how they can embody our philosophy in their workplaces.
Board of Directors’ initiatives
The Toyo Tire Board of Directors meets once a month in principle to decide on important matters and supervise the execution of business by directors. The Board met 17 times in 2022, including some extraordinary meetings. Outside directors attend Board of Directors meetings and other important meetings to encourage an active discussion and monitor and supervise company management.
Since 2017, we have conducted an annual registered questionnaire of all directors and Audit & Supervisory Board members regarding the operation, composition, activities and other features of the Board of Directors to help us analyze and evaluate its effectiveness. To ensure a fair result, the aggregation, analysis and evaluation of the responses are outsourced to an independent body, and we use the result to improve the functions of the Board of Directors.
[ Overview of questionnaire analysis and evaluation, and future response ]
Following on from our good performance last fiscal year, the high evaluations that we received on many items and the continued improvements witnessed suggest that the overall effectiveness of the Board of Directors has been secured. In particular, the supervision of management function has been strongly evaluated for seven consecutive years.
However, some did request better provision of information in order to improve Board effectiveness.
We will continue to work to improve these and other issues.
Nomination & Compensation Committee
We established the Nomination & Compensation Committee as an advisory body to the Board of Directors to further strengthen the independence, objectivity and accountability of the Board with respect to personnel affairs and compensation of directors, and to further enhance our corporate governance system. The committee deliberates on relevant matters and provides advice, suggestions and reports to the Board of Directors.
Engaging in dialogue with shareholders and investors
Toyo Tire Corporation holds an annual General Meeting of Shareholders, and quarterly financial results briefings. Top management conveys its opinions on performance trends, business environments and future outlook for the Group to institutional investors and securities analysts when we announce interim and full-year business results. In addition to these activities, we also seek to promote understanding of Group strategy by creating multiple opportunities for the company president and other senior executives to engage in a dialogue on the issues that interest institutional investors and securities analysts, and providing quarterly opportunities (individual interviews) for investors to communicate and ask questions of IR staff. We also respond proactively to dialogue requests from institutional investors around the world either in the form of individual interviews or conferences.
In 2022, senior executives engaged with investors through small meetings on seven occasions (81 attendees from 73 institutions) and IR staff handled 342 interviews for shareholders and investors from 254 institutions. Furthermore, from the onset of the COVID-19 pandemic we switched to holding our financial results briefing as a conference call, and are continuing to communicate this way with investors. Now that movement restrictions have been relaxed, we have restarted events such as plant tours for institutional investors and securities analysts, to deepen their understanding of our business activities on-site.
Enhancing our communication tools
We are working to improve the way we convey corporate results and various other materials and the way we display information on our IR website in order to disseminate comprehensive management information on Group business strategy, targets, current initiatives and other matters in a prompt and readily understandable manner. We were publishing an annual report every year until 2022 as a tool to help institutional investors and our many other stakeholders around the world understand and gain interest in the Group, but starting from 2023 we have switched to an integrated report.
- Message from the President
- TOYO TIRE Value creation
- TOYO TIRE Sustainability
- TOYO TIREʼs SDGs
TOYO TIRE Materiality
- Help create a society of sustainable mobility / Support the enjoyment of mobility for all
- Support diverse talent with motivating challenges and job satisfaction
- Continue innovating next-generation mobility technology
- Pursue decarbonization in all corporate activities
- Promote supply chain sustainability
- Ensure the fundamentals of manufacturing: quality and safety
Sustainability and ESG themes beyond the material issues
- E: Environment
- S: Upholding human rights
- S: Managing occupational health and safety to global standards
- S: Crisis management (responding resiliently to natural disasters, infections and other crises)
- S: Working with local communities (Helping solve local issues)
- G: Sound governance
- G: Compliance
- G: Risk management
- G: Information security
- G: Promoting digital transformation (borderless and centralized business management through ERP reform)
- Toyo Tire Group Charter of Corporate Behavior
- Toyo Tire Group Code of Conduct
- Site Report
- Report Library
- Editorial Policy
- GRI Content Index
- ESG Data/Survey Index
- Communication on Progress (CoP) Index
- External Recognition