Toyota's top management priority is to steadily increase corporate value over the long term. In order to achieve that, 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. Given this situation, Toyota is seeking to strengthen its corporate governance through various policies in order to further enhance its competitiveness as a global corporation.
Specifically, Toyota has introduced a unique management system focused on prompt decision making for developing our global strategy and speeding up operations.
Furthermore, Toyota has 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.
Toyota has a unique corporate culture that places emphasis on problem solving and preventative measures. Toyota's approach is to build in quality through manufacturing processes, enhancing the quality of everyday operations and consequently strengthening corporate 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.
In the current managerial system, introduced in 2003, the Chief Officers, who are directors, serve as the highest authorities of their specific operational functions across the entire company, 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.
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.
To monitor the management, Toyota has adopted an auditor system that is based on the Japanese Corporation Act.
In order to increase transparency of corporate activities, four of Toyota's seven corporate auditors are external auditors.
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. In 2011, we established Regional Advisory Committees in major regions, such as North America, Europe and Asia, and receive advice on diverse business issues from a global perspective.
Under the basic policies established in May 2006, Toyota implements an internal control system while conducting necessary enhancements. Responding specifically to a series of quality issues that caused anxiety for Toyota customers, it established the "Toyota Special Committee for Global Quality" in March 2010, and the "Risk Management Committee" in June 2010.
Working to ensure fair and transparent corporate governance by emphasizing frontline operations and multidirectional monitoring.