Annual Report 2017

Managing with Fairness and Transparency to Enhance Corporate Value

We believe that our contribution to the development of a sustainable society requires that we enhance our corporate value by remaining a company our stakeholders can trust. Accomplishing this makes it imperative for us to work closely with stakeholders to devise various activities that increase our corporate value.

Maintaining a high degree of fairness and transparency through sound corporate governance is the cornerstone of sustainable company operation, as Tosoh is working to reinforce its corporate governance activities. Basic guidelines for employee compliance in the execution of daily duties are outlined in the Tosoh Group Action Policy, and we are making efforts toward company-wide observance.

We will manage ourselves with fairness and the proper and transparent disclosure of information in mind to secure and maintain society’s trust and thereby contribute to our continued development.

Koji Kawamoto
Tosoh Corporation
Director, Executive Vice President
Manager of Corporate Control and Accounting


Tosoh Corporate Governance

Tosoh’s corporate governance centers on adapting to an ever-changing business world through strong management and a dedication to fairness and transparency.

We work to enhance the effectiveness of our corporate governance by disclosing information to earn the trust of our shareholders and many other stakeholders.

(For details on Tosoh’s corporate governance, please refer to the “Report on Corporate Governance” on the company website).

Board of Directors

(as of June 28, 2017) Internal External (independent)
Directors 8 2
     

Tosoh’s Board of Directors comprises 10 directors, including two external directors and, in principle, convenes monthly. It discusses key management issues, and supervises the performance of duties by all directors and executive officers. The Board of Directors also determines the selection and dismissal of executive officers and the responsibility for the performance of duties.

Analysis and Evaluation of the Effectiveness of the Board of Directors

Tosoh annually conducts an analysis and evaluation of the effectiveness of its Board of Directors and publishes an overview of the results. In fiscal 2017, the company surveyed its board members for their opinions. The findings show that the Board of Directors is effectively executing its role.

Also in fiscal 2017, Tosoh undertook reviews of discussion criteria and of the frequency of reported items to ensure that its Board of Directors can focus on important matters related to management. Both reviews yielded substantial results. They indicated the necessity of the board’s enhancing its discussions of management and business strategies related to Tosoh’s medium-term business plan. The Board of Directors will therefore focus on this going forward.

Board of Auditors

(as of June 28, 2017) Internal External (independent)
Directors 2 2
     

Tosoh’s Board of Auditors is made up of four auditors, including two external auditors and, in principle, convenes monthly. The Board of Auditors evaluates the behavior and business execution of the Board of Directors.

The auditors attend such important gatherings as the Board of Directors meeting, receive reports from the directors, and review documentation related to key decisions. They also exchange information and opinions as appropriate with the company’s Internal Control Committee and with the accounting auditor to improve the efficiency and effectiveness of audits.

To elevate the performance of its auditors, Tosoh has established a secretariat within its Board of Auditors.

External Directors and Auditors

Tosoh has established proprietary independence evaluation standards for its external directors and auditors. If none of the items under the standards are applicable, the determination is that independence is secured.

The company selects external directors and auditors based on their vast experience and knowledge of corporate management. It also designates external directors in accordance with directives from the Tokyo Stock Exchange (TSE) and reports their appointments to the TSE.

Executive Officer System

In June 2016, Tosoh introduced an executive officer system to improve the efficacy and speed of management by differentiating decision-making duties from supervisory duties. This will help Tosoh respond to rapid changes in its business environment and to prioritize transparency regarding the responsibilities of management.

Full list of Tosoh's Board of Directors and Executive Officers» (PDF, Requires Adobe Acrobat Reader)


Compliance Structure

Internal Control Committee

Tosoh’s Internal Control Committee assists in designing and developing Tosoh’s internal controls to ensure the company’s compliance with financial reporting standards as stipulated by Japan’s Financial Instruments and Exchange Act.

The committee evaluates internal controls with respect to audits by the Audit Office and adjusts controls accordingly. It also drafts and publicly issues internal control reports.

The Internal Control Committee enhances the awareness of internal controls among Tosoh Group companies regarding the compliance structure and various risks.

Compliance Committee

Tosoh’s Compliance Committee ensures that directors and employees comply with the Tosoh Group Action Policy and display high ethical and moral standards, and a high degree of fairness. The committee has also set up internal and external compliance hotlines that assure anonymity to help deter compliance-related indiscretions and to help rapidly resolve issues.

Export Supervision Committee

Tosoh’s Export Supervision Committee deliberates on measures ensuring the company’s safe and secure management of exports, fulfillment of its duty as an international corporation, and compliance with Japan’s Foreign Exchange and Foreign Trade Act. It has also had each business unit designate a head and an export manager for cargo control. In short, it has established an export compliance structure.

Antimonopoly Act Compliance Committee

Tosoh’s Antimonopoly Act Compliance Committee endorses a fair, free, competitive business environment. It encourages emerging business activities and corporate development in line with the internal rules, manuals and other instructional materials it prepares to ensure compliance with Japan’s Antimonopoly Act.

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