TORAY INDUSTRIES

Members of the Board and corporate auditors, as officers directly elected at the general meeting of shareholders, clearly recognize fiduciary responsibility to shareholders who have entrusted the management and appropriately fulfill their respective roles while discharging accountability about management status to shareholders and other stakeholders. As Toray Group supplies a wide range of industries with basic materials and globally plays an active part in a broad scope of business fields, it is necessary to evaluate various risks multilaterally based on expertise relevant to the worksites, not only for management judgment and decision-making but also for oversight. To that end, the Board of Directors formulates a structure in which members of the Board familiar with the Toray Group businesses oversee management and make decisions from various viewpoints. Furthermore, the Board of Corporate Auditors oversees the execution of operations by the members of the Board based on professional knowledge in fields such as finance, accounting and law in addition to an understanding about businesses, from a standpoint entirely independent of the Board of Directors as a system to secure transparency and fairness of oversight and decision-making. The Board of Directors oversees management and makes decisions on important managerial matters toward the sustainable growth and increased corporate value of Toray Group for the mid- to long-term. The Board of Directors establishes the Authority of Top Management, an internal rule that expressly stipulates important matters with respect to which decision-making authority is reserved by the Board of Directors and matters with respect to which decision-making is delegated to the management, including the President. For matters with respect to which decision-making authority is reserved by the Board of Directors, a specific guideline for importance is established based on the degree of impact on the Company's financial status and other factors, in order to ensure that the business operation of the whole of the Toray Group, including Group companies, is included according to importance, in addition to the matters set forth in laws and regulations. Toray establishes the Governance Committee as an advisory organ to the Board of Directors in order to report to the Board of Directors on important issues regarding the Company's corporate governance over the mid- to long-term. The Governance Committee consists of the Chairman of the Board, President, and all of the outside directors, and an outside director serves as a chairperson. Corporate auditors and the Board of Corporate Auditors audit the execution of duties by members of the Board and implement other matters set forth in laws and regulations, etc. from a standpoint entirely independent of the Board of Directors, and strive to establish an effective governance structure through their activities. Corporate auditors and the Board of Corporate Auditors cooperate with an independent auditor to perform appropriate audits, and select and evaluate an independent auditor based on an appropriate standard. Corporate Governance Structures