Toyota 2008 Annual Report Download - page 56

54 TOYOTA •Annual Report 2008 •
Corporate Governance
» Toyota’s Basic Approach to Corporate Governance
Toyota’s top management priority is to steadily increase
corporate 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. In order to put 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 in January
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 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. In other words,
because Toyota’s approach is to build in quality through
manufacturing processes, enhancing the quality of everyday
operations strengthens governance. 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
Toyota introduced its current management system in 2003.
The main differences between the current system and the
former system are that the current system set a new non-
board position of Managing Officers and reduced the
number of directors. Under the current system, with respect
to various operational functions across the entire Company,
the Chief Officers, who are Directors, serve as the highest
authorities of their specific operational functions while non-
board Managing Officers implement the actual operations.
The distinctive feature of this system is that, based on
Toyota’s philosophy of emphasizing developments on the
site, the Chief Officers serve as the link between management
and on-site operations, instead of focusing exclusively on
management. As a result, this system enables the
management to make decisions directly with on-site
operations by reflecting on-site personnel opinions on
management strategy and swiftly implementing management
decisions into actual operations. (As of June 24, 2008)
» Systems for Ensuring Appropriate Management
As a system to ensure appropriate management, Toyota has
convened meetings of its International Advisory Board (IAB)
annually since 1996. The IAB consists of approximately 10
distinguished advisors from overseas with backgrounds in
a wide range of fields, including politics, economics, the
environment, and business. Through the IAB, we receive
advice on a diversity of business issues from a global
perspective. In addition, Toyota has a wide variety of
conferences and committees for deliberations and the
monitoring of management and corporate activities that
reflect the views of a range of stakeholders, including the
Labor-Management Council, the Joint Labor-Management
Round Table Conference, the Toyota Environment
Committee, and the Stock Option Committee. Moreover,
Toyota established the CSR Committee by integrating the
Corporate Ethics Committee and the Corporate
Philanthropy Committee in October 2007.
» Accountability
Toyota has engaged in timely and fair disclosure of
corporate and financial information as stated in
“Contribution towards Sustainable Development.” In
order to ensure the accurate, fair, and timely disclosure
of information, Toyota has established the Disclosure
Committee chaired by an officer of the Accounting Division.
The Committee holds regular meetings for the purpose
of preparation, reporting and assessment of its annual
securities report, quarterly report under the Financial
Instruments and Exchange Law of Japan and Form 20-F
under the U.S. Securities Exchange Act, and also holds
extraordinary committee meetings from time to time
whenever necessary.
» Compliance
To firmly establish corporate ethics and ensure strict
compliance, Toyota’s CSR Committee, consisting of
Management & Corporate Information