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The principle behind Toshiba's Investor Relations (IR) activities is to "disclose corporate information, such as corporate strategies and financial data, in a timely and appropriate manner in order to obtain the understanding and earn the trust of shareholders and investors" in accordance with the Toshiba Group Standards of Conduct. In fiscal 2008, our business performance deteriorated significantly owing to a sharp downturn in the market demand, plummeting semiconductor prices, sharp appreciation of the yen, etc. in the wake of rapidly weakening real economies, due to the full-blown global financial crisis in the latter half of the fiscal year.
In January 2009, the former President announced "Toshiba Group's Action Programs to Improve Profitability" under which Group-wide efforts are being made. The program aims to develop the profit making system that enables the Group to generate profit without higher sales and to establish a strong business foundation that will position Toshiba to quickly seize business opportunities when the market starts to recover.
Accordingly it calls for Group-wide measures for structural reform and improvement of unprofitable businesses, focusing on the reduction of fixed costs. In consideration of investor concerns, we voluntarily disclosed information to stock exchanges regarding our business moves, including via press conferences, such as basic agreement concerning the purchase of part of the manufacturing facility from memorychip joint venture, the production-cut plan of the semiconductor business due to a sharp decline in semiconductor prices, basic agreement regarding the acquisition of the hard disk drive business, etc. In order to promote our CSR Management as incorporated in our corporate philosophy, we believe that one of our important IR responsibilities involves reinforcing our corporate structure to fulfill our obligations to inform and explain the management of the concerns of our shareholders and investors as well as any changes in them.
Toshiba, while giving full consideration to such factors as the strategic investments necessary to secure medium- to long-term growth, seeks to achieve continuous increases in its actual dividend payments, in line with a payout ratio in the region of 30 percent, on a consolidated basis.
Regulations/Standards and procedures for timely disclosure were established on October 1, 2003, which defined responsibilities for related work.
Toshiba clarifies the delegation of authority, enhances internal control, and ensures the appropriateness of information content by assigning multiple divisions to prepare and verify management policies, financial data, and other corporate information from their individual perspectives. Toshiba does its utmost to ensure reliable, timely disclosure based on double checking by the division concerned and Legal Affairs Division.
Toshiba's constant upgrades of its IR website to ensure fair disclosure have earned recognition. Awards won by the website in fiscal 2008 are indicated below, and the site also gained high evaluations from several agencies that survey Socially Responsible Investment (SRI).
| Organization | Toshiba's Achievement |
|---|---|
| Gomez Consulting Co., Ltd. | Ranked 1st in the IR Site Total Ranking (among 3,834 companies in Japan |
| Daiwa Investor Relations Co., Ltd. | Received the Internet IR Best Company Award for the forth consecutive year and the seventh time (among 1,935 companies in Japan) |
| Nikko Investor Relations Co., Ltd. | Received the Excellent Corporate Website Award , third Place (among 3,920 companies in Japan) |
| Organization | Toshiba's Achievement |
|---|---|
| Corporate Sustainability Assessment by SAM, a Swiss SRI organization | "Gold Class" |
| Member of Dow Jones Sustainability Index (DJSI) | Selected for 9 consecutive years since 2000 |
| Corporate Social Performance Survey by Public Resource Center (Japan) | A (Highest rank) |
| Included in Morningstar SRI Stock Index | 150 companies selected in total |
| Corporate Responsibility Rating by Oekom, a German rating agency (among 12 IT companies) | Ranked "Prime" |
| Intangible Value Assessment by Innovest (US) | AA |
| Corporate Integrity & Transparency Survey by Integrex (Japan) | 1st Place |
| Included in JCGI Index by Japan Corporate Governance Research Institute, Inc. | 1st Place |
In the interest of fairness, Toshiba discloses information in a timely, appropriate manner in accordance with relevant laws and regulations and also discloses important corporate information not mandated by laws and regulations that is likely to influence investor decisions.
We organized briefings for our businesses with high investor interests. In fiscal 2008, we organized meetings to focus on the semiconductor and medical systems businesses. We will continue to offer opportunities that will help our investors deepen their understanding of our business activities by holding such briefings.
Since 2007, Toshiba has been conducting shareholder surveys, and in December 2008, we randomly selected our shareholders and requested for their cooperation. As a result, more than 4,000 responses were received. Since many have asked us through their responses to conduct the questionnaire survey on a periodic basis, we decided to continue the survey and utilize it as a means of mutual communication with our shareholders.
Other examples of shareholder responses in fiscal 2008 include their favorable evaluation regarding Shareholder Newsletter, as expressed through comments such as "It is good and easy to understand," "It reflects Toshiba's concern toward us," etc. This ensures that our shareholders have been making use of the newsletter.
Toshiba constantly updates its IR website to ensure appropriate and timely disclosure of information. In fiscal 2008, we newly posted the "Anatomy of Technology" (available only in Japanese) on our IR website to explain outstanding technologies and the latest results of our research work. Also, a video on the President's explanation on "Issues for Further Consideration" during the Ordinary General Meeting of Shareholders has been made available on our IR website (Japanese only). In addition, a provision has been made to change the font size as per viewer's convenience.
In fiscal 2008, we held the General Meeting of Shareholders at Tokyo. The meeting was attended by around. 3,700 shareholders, the largest ever attendance. We will continue to enhance our communication with our shareholders through such meetings.
At the site, there were exhibition corners set up to easily explain to the shareholders about various Toshiba products such as electronic devices, social infrastructure systems, digital products, home appliances, medical equipment, etc. Also, copies of Toshiba Group CSR-Report 2009, which features the various CSR efforts for the Group, were distributed at the meeting.
Our IR activities for institutional investors and analysts are conducted mainly at the time of announcement of quarterly results via analyst meetings and as well as individual meetings and interviews. The President and other executive officers take periodic opportunities to meet and communicate with shareholders and investors, while our IR team continues interviews both in Japan and overseas.
In fiscal 2008, the number of dialogues between our IR team and institutional investors and analysts, though slightly less than that in the last fiscal year has exceeded 1,000 (about 70% in Japan and 30% in overseas as in the previous year).
In fiscal 2008, we added Asia to the round of periodic meetings held in the U.S. and Europe. The same year, we had more opportunities to meet and communicate individually with investors in Japan and gave several telephone interviews with them, more than the previous year. We have been strengthening communication with investors, while considering their time constraints.
Shareholder Newsletter
To periodically obtain opinions from shareholders, Toshiba conducts website-based surveys on such topics as management policy and the mid-term business plan, the IR website, and the Shareholder Newsletter.
Due to the favorable response for the newsletter in the fiscal 2007 survey, its issuance has been increased to as many as five times a year from fiscal 2008. Furthermore, following our revision for business forecasts in September 2008, we issued an extra edition in the form of a postcard to directly inform the shareholders of our sharply worsening business performance and the causes behind it.
The results of shareholder survey, etc. indicated that next generation businesses, such as power system, semiconductor and fuel cell businesses, had been chosen as noteworthy business areas. In order to improve the understanding of businesses we are focusing on, a Toshiba's general manager in charge of the business strategy of SCiBTM (a new type of rechargeable battery), conducted a lecture at a seminar for individual investors hosted by an IR supporting company in December 2008. A video broadcast of the same was made available on our website. Also, we started posting the "Anatomy of Technology" (available only in Japanese) on the IR Library page on our website, which clearly explains our outstanding technologies and the latest results of our research work. As such, we are working to achieve enhanced two-way communication with our shareholders using various approaches.
Toshiba introduced a plan for countermeasures to any large-scale acquisitions of Toshiba's shares (the "Plan"), based on the shareholders' approval for the basic concept of the Plan at the Ordinary General Shareholders Meeting held in June 2006, for the purpose of protection and enhancement of the corporate value of Toshiba and the common interests of shareholders.
The Plan was introduced for the purpose of protecting and enhancing the corporate value of Toshiba and the common interests of its shareholders by explicitly setting forth the procedures to be followed when a large-scale acquisition of Toshiba's share is made, ensuring that shareholders are provided with necessary and adequate information and sufficient time to make appropriate decisions, and securing the opportunity for Toshiba to negotiate with the acquirer.
Specifically, if an acquirer starts or plans to start an acquisition or a takeover bid that would result in the acquirer holding 20% or more of Toshiba's total outstanding shares, Toshiba will require the acquirer to provide the necessary information in advance to its Board of Directors. The Board of Directors will then establish a Special Committee that will, at its discretion, obtain advice from outside experts, evaluate and consider the details of the acquisition, disclose to Toshiba's shareholders the necessary information regarding the acquisition, as well as the alternative proposal prepared by Toshiba's Chief Executive Officer, and then negotiate with the acquirer. If the acquirer does not comply with the procedures under the Plan, or the Special Committee decides that the acquisition would damage the corporate value of Toshiba or the common interests of shareholders, the Special Committee will recommend to the Board of Directors that Toshiba implement countermeasures (a gratis allotment of stock acquisition rights (shinkabu yoyakuken no mushou wariate), a condition of which will be that they cannot be exercised by acquirers or the like) and protect the corporate value of Toshiba and the common interests of shareholders.
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