Toray Industries Receives Investigation Report from Panel of Experts and Announces Response Measures

1.

Points of recommendation and response measures to be implemented
Toray takes the recommendations of this expert committee seriously and will implement the following measures.

(1)

Improve compliance awareness

(a)

Improve compliance training
Promote in-depth group-wide training on certification and private sector standards based on recommendations.

(b)

Integrate contribution to quality assurance in performance reviews
Update the human resources appraisal system with greater emphasis on contributing to compliance, including quality assurance efforts.

(vs)

Sharing of recurrence prevention activities
Post progress with recurrence prevention measures on the Toray corporate website.

(D)

Increased and continued engagement of the management team
Ensure that senior managers continually communicate to employees the importance of compliance while declaring their own responsibility and mission for compliance.

(2)

Establish work procedures and training system for UL related operations
Document appropriate operating procedures and the responsibilities and roles of relevant personnel. Promote training on UL rules and obtain third-party audits and verification of Toray’s certification management system.

(3)

Transfer of personnel between business divisions and other interactions
Implement staffing changes of Quality Assurance Department Managers in Business Divisions and staffing changes in Business Divisions at management level. Organize training sessions using this case as an educational tool, in which employees and managers from different divisions of the company participate.

(4)

Establish a system for confirming UL compliance by internal quality assurance agencies and/or external agencies
Document the specific role of the QA division for UL and other certification work, and obtain audits and verification that the roles are performed correctly, from a third party.

(5)

Strengthening of the organizational structure of the quality assurance bodies (Monitoring and supervision of the activities of the quality assurance sections by the Quality Assurance Division and other internal and/or external bodies)
Create mechanisms for the Quality Assurance Division to audit each of its departments and receive operational audits of the entire Quality Assurance Division from an external organization.

(6)

Establish a system to ensure misconduct is reported to Toray administrative organizations and other parties

(a)

Clarify rules for when employees have knowledge of misconduct or suspected misconduct
Clarify the obligation to report breaches in quality assurance and product safety management regulations.

(b)

Establishment of a system to encourage the use of the whistleblower hotline
Improve the guide on how to use the whistleblower hotline, including providing specific examples of reporting.

(vs)

Enhanced and ongoing internal investigations (Toray Group-wide investigations) by quality assurance bodies
Ensure that all employee responses, including comment box details, are sent directly to the QA division. In Group investigations, clearly indicate that breaches of private sector certification rules fall within the scope of the investigation.

2.

Discipline of Responsible Persons

The sustained and systematic inappropriate actions have caused enormous inconvenience to the company, including customers, and have significantly damaged the company’s reputation. To determine executive liability, Toray’s Governance Committee (which includes a majority of outside directors and is chaired by an outside director) will discuss the extent of executive liability and details of appropriate disciplinary action, and then report to the board of directors.
As for those involved in other improper actions, Toray will determine their responsibilities and take strict disciplinary action based on internal rules.

With respect to its recommendation in the survey report on improving compliance awareness, the panel highlighted the need for increased and ongoing engagement from the leadership team. With regard to “ethics and fairness”, which is one of the main priorities of the management of the Toray group, the management team takes seriously the fact that they have not sufficiently demonstrated at the places Toray’s work commitment to these values ​​and is committed to improving its awareness and conduct. . The goal is to impress upon everyone in the Toray Group workplace that compliance is top management priority. To achieve this, the leadership team will take every opportunity to directly demonstrate its commitment to compliance to employees and will strive to foster an open corporate culture that values ​​direct employee feedback.
Regarding product safety, Toray urgently checks whether there are any problems with customers’ products due to Toray resin materials. The Company is not aware of any major issues at this time, but will continue to expedite confirmation efforts.

Additionally, the company separately checks other certifications beyond UL for Toray products and will take similar action if any issues are found.
Toray will continue to publish progress information on the recurrence prevention measures described above, as well as confirmation of product safety and reacquisition of UL certification. Toray will also continue to disclose other material information as appropriate.

Toray deeply regrets allowing this situation to occur and once again sincerely apologizes for all the concern and inconvenience caused.
Going forward, senior management will take responsibility for ensuring that all officers and employees work together to thoroughly implement all necessary measures to prevent any recurrence of the issue, including the measures described above. Toray is determined to restore full confidence in his integrity and once again demonstrate what Toray can achieve. Your continued support is deeply appreciated.

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For details on the status of UL certification, the information of the following specially established web pages on Toray resin product sites will be updated regularly.
Special web pages for responding to inquiries:
https://www.toray.jp/plastics/en/ul/ul_001.html