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10 TOSHIBA CORPORATION
10 TOSHIBA CORPORATION
CORPORATE GOVERNANCE
Toshiba is determined to achieve the highest standards of corporate governance. Toward
this, we will bring greater transparency to management processes and business strategy,
reinforce disclosure and accountability, and continue to refine thoroughgoing risk
management procedures. Through enhancements to our system of corporate governance,
we will seek continued enhancement of the value of the company.
Building on Accomplishments
Since improving corporate governance re-
quires higher levels of operating openness
and timely decision-making, we consistent-
ly advocate management innovation and
reform. As a result, Toshiba moved ahead
of other Japanese companies in the intro-
duction of an executive officer system in
1998, and in the deployment of an in-
house company system in 1999. Fiscal
2003 will involve another round of reform,
as we take full advantage of revisions to the
Japanese Commercial Code to initiate a
Company with Committees system. This
new system will reinforce the supervisory
function of management, enhance manage-
ment transparency and further improve
corporate governance. Moreover, the new
system will promote greater management
agility and flexibility by clearly separating
responsibility for business supervision and
execution, and improve management speed
by delegating a wide range of authority and
freedom to Toshiba’s executive officers.
Increasing Management Agility by Separating
Business Supervision and Execution
Through the Company with Committees
system, the role of the Board of Directors is
focused on compliance. The Board essen-
tially acts on behalf of stakeholders,
including the shareholders, to ensure that
basic policy decisions and important man-
agement initiatives reflect stakeholder
interests. Three legally mandated commit-
tees—Nomination, Audit and
Compensation—all of which must contain
a majority of outside directors, further bol-
ster the supervisory function and
transparency of governance, while also rep-
resenting stakeholder concerns. The Audit
Committee serves to provide a potential
check on management, as a vehicle for
monitoring Toshiba’s activities for compli-
ance with legal and regulatory
requirements.
The Company with Committees system
is positioned to transfer a wide range of au-
thority from directors to executive officers,
which will accelerate the speed of manage-
ment decision-making. With the
implementation of a clearly defined system
for business supervision and execution,
along with the reconstruction of mecha-
nisms for internal corporate controls and
monitoring, executive officers will gain the
freedom to concentrate more clearly on
business performance.
GROWTH POLICIES THAT MAKE TOSHIBA A WINNER
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