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Governance Overview

As of July 22, 2015

Toshiba's Governance System

Toshiba's corporate governance follows the fundamental policies of maximizing corporate value from the shareholders' perspective and improving management efficiency and transparency.
Guided by this, we revitalized the Board of Directors and reduced its membership with the 1998 introduction of the executive officer system. Other management initiatives followed. In 2000, we voluntarily established the Nomination Committee and the Compensation Committee. In 2001, we introduced a system of appointing three outside directors and reducing the term of office for directors to one year. And in 2003, following a change in the commercial code, in another move toward reinforcing management efficiency and transparency, we introduced the Company with Committees system, pursuant to a resolution approved by the annual meeting of the shareholders.

figure of Corporate Governance Structure

The three committees-the Nomination Committee, the Audit Committee and the Compensation Committee-all have a majority of outside directors, and outside directors chair all Committees.

Nomination Committee : Sakutaro Tanino (Chairman of the Committee, OD), Masashi Muromachi, Hiroyuki Itami (OD)
Audit Committee : Hiroyuki Itami (Chairman of the Committee, OD), Seiya Shimaoka, Ken Shimanouchi (OD), Kiyomi Saito (OD), Sakutaro Tanino (OD)
Compensation Committee : Ken Shimanouchi (Chairman of the Committee, OD), Masashi Muromachi, Hiroyuki Itami (OD), Kiyomi Saito (OD)

Note) OD : outside director

The four outside directors who serve on the Audit Committee are supported by the committee's dedicated, full-time staff, and the outside directors on the Nomination Committee and Compensation Committee are also provided with staff support.
As a company with Committees, Toshiba delegates operational decision-making to executive officers. The board plays a supervisory role in respect of operations, retaining the right of final decision only in such matters that might have a considerable impact on shareholder value.
In respect of operations, decisions on key matters are made by the chief executive officer mainly at the corporate management meeting, which meets weekly as a general rule. Other matters are determined by in-house company presidents at individual in-house company management meetings.

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Toshiba's Internal Control Systems

Toshiba Group constantly refines its system of internal controls, towards ensuring management effectiveness and efficiency and reliable reporting on operations and finances and to secure high level legal compliance and risk management.
We also ensure that domestic Group companies, regardless of the scale of their operations, establish internal control systems based on those of the parent company.
The following website provides detailed information on the structure of our internal control systems.

Risk Management

At Toshiba, throughout our worldwide operations, we strive to ensure compliance with laws and regulations, social and ethical norms, and internal rules. According top priority to human life and safety and to compliance in everything we do underpins our commitment to promoting business activities through fair competition and serving the interests of customers to the best of our ability.
We consider thorough adherence to the Toshiba Group Standards of Conduct (SOC), which embodies the Basic Commitment of the Toshiba Group, to be the foundation of our compliance. Thus we are working toward the SOC becoming an integral part of the entire Toshiba Group. Every year, priority themes regarding compliance are established and promoted in light of business circumstances. By implementing a Plan-Do-Check-Action (PDCA) cycle of self-assessment, not only at each in-house company but also at group companies worldwide, we are stepping up our efforts to ensure compliance.
The Risk Compliance Committee, headed by the CRO*, manages serious risk and compliance issues and works with each relevant division to strengthen the risk management system by developing countermeasures to specific risks, plus measures to prevent their spread and recurrence.

Note) Chief Risk Compliance Management Officer

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The Status of Internal Audits and Audits by the Audit Committee

The Corporate Audit Division reports directly to the president. It is responsible for internal audits from the perspectives of appropriate operational procedures, accountability of results and legal compliance.
The Division holds advance discussions with the Audit Committee on each year's audit policy and plans. It also holds semimonthly liaison meetings with the Audit Committee for pre-audit discussions and to share information on the divisions subject to audit.
The Corporate Audit Division carries out on-site inspections and reports its results to the Audit Committee. However, if it deems it necessary, the Audit Committee has the right to carry out its own on-site inspections. At the Furthermore, in addition to receiving explanations from independent auditors (CPA) on their audit plans at the beginning of each fiscal year, the Audit Committee can also request reports on the status of audits during the course of each term, and explanations and reports on end-of-year audits, as necessary.

This Web site contains projections of business results, statements regarding business plans and other forward-looking statements. This information is based on certain assumptions, such as the economic environment, business policies and other factors, as of the date when each document was posted. Actual results may differ significantly from the estimates listed here.

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