Toyota 2005 Annual Report Download - page 18

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16
CORPORATE GOVERNANCE
[TOYOTA’S BASIC APPROACH TO CORPORATE GOVERNANCE ]
➤Toyota’s top management priority is to steadily increase shareholder value over the
long term. Further, our fundamental management philosophy is to remain a trusted
corporate citizen in international society through open and fair business activities
that honor the language and spirit of the law of every nation. Putting that philosophy
into practice, Toyota builds favorable relationships with all of its stakeholders,
including shareholders, customers, business partners, local communities, and
employees. We are convinced that providing products that fully cater to customer
needs is essential to achieve stable, long-term growth. That philosophy is outlined in
the “Guiding Principles at Toyota.” Further, to explain those principles in more-
detailed terms, we prepared and issued the “Contribution towards Sustainable
Development” statement at the beginning of 2005. Through such initiatives, Toyota
is taking concrete measures to reinforce its corporate governance functions and to
become an even more competitive global company.
Specifically, we have introduced a unique management system focused on prompt
decision making for developing our global strategy and speeding up of operations.
Furthermore, we have a range of long-standing in-house committees and councils
responsible for monitoring and discussing management and corporate activities from
the viewpoints of various stakeholders to ensure heightened transparency and the
fulfillment of social obligations.
Ultimately, however, a well-developed awareness of ethics among individuals is
the key to successful governance systems. Without such awareness—regardless of
the governance structure of a company—corporate governance cannot function
effectively. Toyota has a unique corporate culture that places emphasis on problem
solving and preventative measures, such as problem solving based on the actual
situation on the site and highlighting problems by immediately flagging and
sharing them. Toyota’s management team and employees conduct operations and
make decisions founded on that common system of checks and balances and on
high ethical standards.
[TOYOTA’S MANAGEMENT SYSTEM ]
➤In June 2003, Toyota introduced a new management system that includes a
streamlined Board of Directors and the new position of non-board managing officers
with responsibility for specific operational functions. A distinctive feature of Toyota’s
management system is that senior managing directors do not focus exclusively on
management. They also serve as the highest authorities in the specific operational
functions and as the link created between management and on-site operations.
Retaining an emphasis on developments on the site—one of Toyota’s perennial
strengths—helps closely coordinate decision making with actual operations. Manage-
ment decisions can be swiftly reflected in operations, while overall management
strategy is able to readily incorporate feedback from frontline operations.