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Governance Overview

Toshiba's Governance System

Toshiba's central aim in corporate governance is to achieve sustainable growth and to enhance Toshiba Group's corporate value over the medium- to longterm thereby contributing to the profit of all stakeholders, including shareholders, investors, employees, customers, suppliers, creditors and local communities.

The Board of Directors has adopted “Corporate Governance GuidelinesA separate window will open.” that form the framework of governance of the Company. For more information on this, see the GuidelinesA separate window will open..

Corporate Governance Structure

figure of Corporate Governance Structure

At Toshiba, the Nomination Committee, the Audit Committee and the Compensation Committee are composed, in principle, only of independent Outside Director members.

Nomination Committee : Yoshimitsu Kobayashi (Chairman), Kouichi Ikeda, Ryoji Sato and Shinzo Maeda
Audit Committee : Ryoji Sato (Chairman), Teruko Noda, and Yuki Furuta
Compensation Committee : Yuki Furuta (Chairman), Teruko Noda, Kouichi Ikeda, Yoshimitsu Kobayashi and Shinzo Maeda

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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, Internal Audit

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.

Thorough adherence to the Toshiba Group Standards of Conduct (SOC), which embody the Basic Commitment of the Toshiba Group, is the bedrock 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 at each inhouse company and 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.

* Chief Risk-Compliance Management Officer

Status of Internal Audits and Audits by the Audit Committee

1. The Internal Audit and the Audit Committee — organization, personnel and procedures

The Internal Audit Division (personnel: 57 staff ) was established as an internal audit department, and is under the direct control of the Audit Committee. By monitoring the operational status of in-house companies on a daily basis, the Internal Audit Division is able to strengthen the audit system with respect to their operations. By strengthening cooperation with the Audit Committee, the Accounting Auditor, we seek to strengthen the various audit functions, such as accounting audits, internal control audits and audits on legality.

In addition, an Audit Committee Office with a staff of approximately 10 has been established to support the Audit Committee in carrying out its responsibilities. The office is headed by an Executive Officer, and a system has been put in place that gives it the right to carry out investigations and hear information for itself, on the basis of instructions received from the Audit Committee.

The Audit Committee works in close cooperation with the Internal Audit Division to confirm the development of internal systems.

The Internal 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. Furthermore, in addition to receiving explanations from independent auditors 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.

It should be noted that the Audit Committee has three members. As certified public accountants, the Chairman of the Audit Committee, Mr. Ryoji Sato, and committee member Ms. Teruko Noda, have been involved in the practice of corporate accounting for many years and have considerable knowledge of finance and accounting.

2. Mutual cooperation between the internal audit, the Audit Committee audit and the accounting audit, and the relationship with the Internal Control Division

Mutual cooperation between internal audits, Audit Committee's audits and the accounting audits is detailed in 1. above. In Toshiba, divisions responsible for internal controls ensure the appropriateness of all information disclosure, including financial reporting, and the effectiveness and efficiency of operations, compliance, and risk management, etc. The Legal Affairs Div., Accounting Div., CRO, and Risk Compliance Committee are included among divisions in this category. Along with providing the Audit Committee with timely reporting required by the “Audit Committee reporting and information access rules,” the said divisions responsible for internal controls also provide information to the Internal Audit Division and Accounting Auditor from time to time, as required.

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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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