Governance

Sound, Fair, and Transparent Corporate Management

At Tosoh, we believe that effective corporate governance is essential for sound, fair, and transparent business management. The Tosoh Group continues to enhance its corporate governance to build a sounder and healthier corporation.

Messages from External Directors

"Society’s scrutiny of management and demand for managerial transparency are intensifying. At Tosoh, our desire to respond in a sincere manner is a driving force for steady growth, in our corporate value and in our contributions to society. As an external director, I hope to apply the lessons that I have learned through experience to assist in the challenge of working toward and attaining growth through our medium-term business plan."

"During the three years that I have served as an external director, I have made maximum use of the wide-ranging experience that I have gained over the course of my working career, particularly in technical areas. I have attempted to provide advice aimed at increasing Tosoh’s corporate value. In discussions regarding the medium-term business plan that begins in fiscal 2020, I participated in deliberations concerning strategy, capital policy, and other issues. I will continue to oversee the progress of this plan, to offer advice, and to fulfill my duties as an external director regarding the soundness of corporate management and the enhancement of corporate value."

Tsutomu Abe
External Director

Kenji Ogawa
External Director


As of June 30, 2019, Tosoh’s Board of Directors comprises five internal and two external directors, for a total of seven directors. The Board generally meets once a month. It is tasked with decisions on business planning, strategy, and other issues in accordance with applicable laws, Tosoh’s articles of incorporation, and its own regulations and with overseeing the performance of directors and executive officers. The Board also makes decisions concerning the election, dismissal, and division of duties for executive officers.

Analysis and Evaluation of the Effectiveness of the Board of Directors

The effectiveness of the Board of Directors is analyzed and evaluated yearly, and an outline of the findings is disclosed. In fiscal 2019, the evaluation involved having Board members complete a questionnaire on which they were asked to give their opinions. The result of this evaluation was that the Board of Directors is performing its roles and duties effectively.

In fiscal 2018, analysis and evaluation determined that discussions of management and of business strategies in the medium-term business plan required improvement. As a remedy, the company reviewed the material format and confirmed through its fiscal 2019 analysis and evaluation that its review led to positive results for such discussions.

The fiscal 2019 analysis and evaluation, however, also found that further improvement was needed in the implementation of changes and in the operation of the Board. By responding to issues identified through analysis and evaluation, the Board contributes to enhancing Tosoh’s corporate value.

(as of June 30, 2019) Internal External (independent)
Auditors 2 2

Tosoh has adopted an auditor system. Under that system, individual corporate auditors and the company’s Board of Auditors audit the directors in the execution of their duties in accordance with applicable laws and the company’s articles of incorporation.

The corporate auditors attend meetings of the Board of Directors and of the Board of Auditors. They also attend other internal meetings, receive reports from directors, and review documents relating to important decisions. To improve the efficiency and effectiveness of their audits, moreover, they exchange information and opinions with Tosoh’s Auditing Office, Internal Control Committee, and accounting auditors as needed.

Tosoh has in addition established a secretariat for its Board of Auditors. The secretariat has a complement of personnel dedicated to assisting the company’s auditors in their duties, thereby enhancing the performance of the corporate auditors.

Nomination and Compensation Advisory Committee

To strengthen its corporate governance, Tosoh established the Nomination and Compensation Advisory Committee in June 2019 as an advisory body to the Board of Directors. This committee works to ensure fair, transparent nomination and compensation procedures for directors, auditors, and executive officers. The committee comprises three or more members, including the company president, the majority of whom are independent, external directors.

Management Committee

Tosoh’s holding of a Management Reporting Meeting ensures appropriate and efficient decision-making. Attendees at the meeting deliberate issues to be submitted to the Board of Directors and discuss important issues for the management of the Tosoh group in general.

External Directors and Auditors

Tosoh appoints independent, external officers with a wide range of experiences and insights to oversee proper corporate governance. These external officers monitor the execution of company business from a neutral and objective perspective. Tosoh has established proprietary Criteria for the Independence of External Directors and Corporate Auditors. It refers to these criteria when determining whether independence is ensured. The external officers appointed by Tosoh supervise and audit the company’s business activities by attending meetings of the Board of Directors and other bodies and through their receipt of regular reports and explanations.

Executive Officer System

Tosoh’s implementation of an executive officer system improves the swiftness and efficiency with which the company can make decisions, chiefly by separating management decision-making from supervisory and executive functions. The executive officer system has made possible a corporate management structure that responds effectively to even rapid changes in the business environment because the system clarifies decision-making roles and responsibilities.


Compliance 

Basic Policy

The Tosoh Group’s basic policy on compliance is to pursue profits through fair competition while remaining reliably compliant with laws and regulations and a useful and contributing member of society. Compliance for the Tosoh group is founded on the imperative that its employees each conduct themselves sincerely, fairly, ethically.

Tosoh Group Action Policy

The Tosoh Group Action Policy prohibits corruption and indicates methods of compliance in business activities. It is steeped in the company president’s belief that compliance is the foundation of Tosoh Group management and must be prioritized above profit. Tosoh Group employees are obliged to observe this policy, particularly as it was revised in October 2018 to include additional CSR initiatives. The Tosoh Group Action Policy is available in Japanese, English, Chinese, and Korean language versions. It has also been translated into some of the languages where various of our overseas businesses are located for the benefit of local employees and in line with their cultures and customs. Pamphlets explaining the Tosoh Group Action Policy are also available at all the Tosoh Group’s domestic subsidiaries.

Compliance Promotional Structure

Tosoh believes that adhering to established laws and regulations, procedures and methods protects its employees and the company from accidents and disasters and solidifies its management. It has therefore established a compliance promotion structure to convey to employees the importance of not merely being aware of compliance but, more, of complying in practice in their daily business activities.

Compliance Committee

Chaired by an officer designated by the president, the Committee is otherwise composed of the heads of related departments. At its biannual meetings, the Committee formulates and executes the compliance education plan, assesses the progress of compliance promotion, and plans and proposes various measures toward promoting compliance.

Compliance Committee Promotion Team

This team submits opinions to the Compliance Committee, and promotes compliance activities under the direction of the Committee. Moreover, as the parent company that oversees all of the Group companies, it offers information and educational opportunities in support of compliance promotion at Tosoh Group companies.

Manufacturing Complex Compliance Committees

These committees plan, propose, and implement various measures toward promoting compliance.

Department Person in Charge

A person in charge will be assigned in each department to promote compliance within that department. They follow the instructions of the Compliance Committee and conduct compliance training and other activities within the department to ensure each employee is capable of executing compliance measures.

Compliance Consultation Desks

Tosoh has established compliance consultation desks to swiftly verify and respond to compliance violations or the potential of violations. This facilitates the prevention and early-stage correction of compliance-related issues. The three compliance consultation desks established are internal, external, and corporate auditor. Full-time and temporary employees of Tosoh and its domestic subsidiaries and of its cooperating partner companies can all consult the desks. A pocket card listing the contact information for each desk is available to employees to ensure that they can contact a desk as needed at any time.

Tosoh’s internal regulations stipulate the protection of confidentiality and the prohibition of disadvantageous treatment regarding consultees. We carefully and discretely investigate and respond to matters raised in consultations. We have established similar compliance consultation frameworks for each of our business locations in Asia, the United States, and Europe.

Cybersecurity

In addition to bolstering its conventional security measures, Tosoh is furthering its cybersecurity in response to the growing threat of electronic incursions.

We have, for example, introduced equipment dedicated to decrypting communications and to verifying that nothing suspicious is taking place. In addition, we have established a Security Operations Center to enable swift responses even to increasingly complex cyberattacks and the discovery and reduction of the risk of cybersecurity incidents at an early stage. We hold cybersecurity briefings at all our facilities to ensure employee compliance with security policy, to draw attention to cybersecurity measures using case studies, and to explain defensive measures. We also conduct e-mail attack drills to allow employees to experience firsthand the threat of cyberattacks and are working to improve employee cybersecurity literacy through e-learning.

Cyberattacks are constantly changing in form and sophistication. So, we source the latest cybersecurity information from industry associations and government agencies and apply it in our cybersecurity measures.

Copyright © 2019 Tosoh Corporation