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Basic Stance on Corporate Governance

The TOTO Group strives to be a great company, trusted by people all around the world, contributing to the betterment of society. In addition to being a corporate entity engaged in the pursuit of profit through fair competition, the Group conducts its business in such a way as to continue to benefit society broadly. In order to realize this target, we believe it is important to build a system for pursuing and supervising fair and equitable management, and clearly define a philosophy that serves as the basis of such a system.

(1) The TOTO Group has developed a philosophy system for TOTO Group management. This includes a common Group philosophy, representing the inherited values of TOTO that will be carried forward into the future. This represents the "heart" of our philosophy. Also, our philosophy system includes visions for business activities representing the direction of our action to be reviewed in accordance with the demands of the times. This is positioned as the "body in action." All of our business activities are based on this philosophy system.

(2) To ensure operational decisions and business execution in compliance with relevant laws and regulations and TOTO’s Articles of Incorporation, TOTO has a Board of Directors and an Audit & Supervisory Board, and retains independent accounting auditors.
The Board of Directors, emphasizing fairness, objectivity, and transparency, has appointed three Outside Directors who are independent of the TOTO Group. The Outside Directors give various advice and make proposals on our overall management.
The Audit & Supervisory Board audits the business execution of Directors and consists of four members, including two outside members. We have built a system to ensure their effective audits through their attendance of major meetings, including meetings of the Board of Directors , and the exchange of opinions with Directors on a regular basis.

(3) To complement audits by Audit & Supervisory Board Members and independent accounting auditors and to build a stronger internal control system, we have established the Internal Audit Office in-house, which is independent of operational divisions. With the establishment of the Internal Audit Office, we have strengthened our internal audits under the direction of the President.
Audit & Supervisory Board Members, independent accounting auditors and members of the Internal Audit Office carry out audits as a three-party audit team. In addition, we strive to enhance the quality and effectiveness of audits through close collaboration among the three parties, which involves reviewing audit results by Audit & Supervisory Board Members and exchanging information at meetings, among other activities.

(4) In order to comply with the tax laws of countries around the world, TOTO Group will ensure tax transparency by establishing a tax policy. TOTO aims to increase value for shareholders by eliminating tax risks on a global basis.
-Basic policy
 TOTO complies with tax laws in all countries of operation and pays taxes fairly and appropriately.
-Transfer price
 TOTO has established a transfer pricing policy for the TOTO Group that complies with the OECD Transfer Pricing Guidelines and the laws and regulations of each country, and sets inter-group transaction prices based on this policy.
-Tax haven
 TOTO will not intentionally avoid taxes by using tax havens.
-Relationship with tax authorities
 TOTO is committed to building good relationships with the tax authorities in all countries where we operate through a cooperative approach.

Corporate Governance and Business Operations

Corporate Governance and Business Operations

Directors and the Board of Directors

The Board of Directors, which consists of all Directors, makes decisions from the most appropriate company-wide, group-wide and stakeholder perspectives and conducts mutual supervision of the duties of Directors.
Directors other than the Chairman of the Board or Outside Directors concurrently hold positions as Executive Officers in order to perform their own business duties as well (Directors and Executive Officers).
TOTO invites Outside Directors, well versed in the management of leading companies respected for their management practices to which the TOTO Group aspires, to receive advice and suggestions on general management issues based on their in-depth knowledge as experienced managers.
The term of office of Directors is one year, which is designed to clearly define their responsibilities.

Audit & Supervisory Board Members and the Audit & Supervisory Board

The Board of Corporate Auditors, which consists of all Audit & Supervisory Board members, meets once a month, in principle, conducts audits of the execution of duties by the directors from a legality and validity perspective, participates in key meetings that include Board meetings, expresses their opinions as needed, and performs auditing according to the audit policy utilizing various means that include the Internet. They also have a system in place to ensure effective auditing by the Audit & Supervisory Board members through, for example, exchanging opinions with the directors on a regular basis. As outside Audit & Supervisory Board members, TOTO adopts those with expertise in corporate finance and legal affairs and with deep knowledge and experience concerning corporate management to audit the decision-making process of the Board of Directors and the execution of business operations by the directors from an objective and fair position.

Nominating Advisory Committee

The Nominating Advisory Committee, which meets once a year or more in principle, has been established to help ensure the objectivity and transparency of TOTO’s management through activities such as deliberating on and confirming the appointment of TOTO’s Directors and Audit & Supervisory Board Members. The Committee shall report to the Board of Directors on proposals submitted to the General Meeting of Shareholders related to the appointment and dismissal of the candidates of Directors and Audit & Supervisory Board Members, including Outside Directors and Outside Members of the Audit & Supervisory Board and Representative Director.
Half or more of Committee members shall be outside members, and the chairperson and members have been appointed by the Board of Directors. The Committee members consist of five Independent Directors/Audit & Supervisory Board Members as outside members and Representative Director, Chairman of the Board and President, Representative Director of TOTO as internal members, and the chairperson shall be the President and Representative Director of TOTO. Members with special interests are unable to participate in the resolution.

Compensation Advisory Committee

The Compensation Advisory Committee has been set up to confirm that the process to determine base compensation, bonuses, and share-based payments for Directors, and their allocation balance are in line with the Articles of Incorporation, the resolutions of the General Meeting of Shareholders, and the Basic Policy for Directors’ Compensation, in order to contribute to the ensuring of the appropriateness and objectivity of Directors’ compensation through its activities.
The majority of Committee members shall be outside members and the chairperson and members have been appointed by the Board of Directors.
The Committee members consist of six outside members including five Independent Directors/Audit & Supervisory Board Members and one Director without the right of representation as an inside member, and the chairperson shall be elected from among the outside members.

Internal Audits

The Internal Audit Office, which is independent of the operational divisions, examines under the direction of the President whether TOTO and the Group companies are performing their operations appropriately and efficiently in compliance with laws and regulations, the Articles of Incorporation, the corporate philosophy and internal regulations.

Executive Officers

To implement decisions made by the Board of Directors effectively and efficiently, TOTO has introduced an Executive Officer system.

Management Committee

TOTO makes important decisions regarding its operations through deliberations at meetings of the Management Committee, which comprises Directors who are also Executive Officers. The meetings of the Committee are, in principle, held twice a month.

Composition of the Board of Directors and Audit & Supervisory Board in Fiscal 2021

We believe that in order to supervise business operations and to make important decisions, TOTO’s Board of Directors must be composed of members with diverse perspectives, experience and highly professional skills. Meanwhile, for the purpose of performing the double-check function of supervision by the Board of Directors and of audits by Audit & Supervisory Board Members, Outside Directors need to include not only auditors required by law, but also Directors with voting rights at Meetings of the Board of Directors; and both Audit & Supervisory Board Members and Directors must have considerable independence.
As of June 28, 2021, we have 12 Directors with voting rights at Meetings of the Board of Directors, of whom 9 are Inside Directors with careers in the TOTO Group and three are highly independent Outside Directors.
These members use their respective skills in discussions to make legal and business management decisions and supervise business operations.
The Audit & Supervisory Board consists of two standing members with careers in the TOTO Group and two outside members with a high level of independence, and conducts audits from the perspectives of legality and appropriateness.

Composition of the Board of Directors

Title Name Outside Nominating Advisory Committee Compensation Advisory Committee Attendance of the Meetings of the Board of Directors in Fiscal 2020
Representative Director Madoka Kitamura - - 12/12
Representative Director Noriaki Kiyota - - 12/12
Representative Director Satoshi Shirakawa - - - 12/12
Director Ryosuke Hayashi - - - 12/12
Director Tomoyuki Taguchi - - 12/12
Director Shinya Tamura - - - 12/12
Director Toshiya Kuga - - - 10/10
Director Takayuki Shimizu - - - 10/10
Director Yojiro Taketomi - - - -
Director Masatsugu Shimono 12/12
Director Junji Tsuda 12/12
Director Shigenori Yamauchi 10/10

Composition of the Audit & Supervisory Board

Title Name Outside Nominating Advisory Committee Compensation Advisory Committee Attendance of the Meetings of the Board of Directors in Fiscal 2020
Audit & Supervisory Board Member, Standing Yuichi Narukiyo - - - 12/12
Audit & Supervisory Board Member, Standing Shigeki Inoue - - - 10/10
Audit & Supervisory Board Member Shuichi Sarasawa 12/12
Audit & Supervisory Board Member Yasushi Marumori 12/12

(Note) Compensation Advisory Committee members include an external expert who is appointed as an outside member.

Reasons for Adoption of Current Corporate Governance System

The TOTO Group considers that an essential aspect of corporate management is ensuring the satisfaction of stakeholders and constantly expanding corporate value by improving objectivity and transparency in management and by clarifying management responsibilities. To achieve this, for matters requiring management decisions, TOTO recognizes the importance of systematizing "who makes decisions about what and where" as well as "what checks are implemented" in a fair and honest manner.

TOTO has adopted the Audit & Supervisory Board system and is building a structure of decision-making, supervision, and more efficient and effective business execution, with the aim of continuously increasing corporate value.
  1. Clarifying the allocation of management responsibility (introduction of the Executive Officer system and the like)
  2. Enhancing management transparency and soundness (establishment of the Nominating Advisory Committee and the Compensation Advisory Committee)
  3. Reinforcing supervisory and auditing functions (nomination of highly independent Outside Directors and Outside Members of the Audit & Supervisory Board)
  4. Strengthening decision-making functions (establishment of the Management Committee and the like)
In order to strengthen these functions, TOTO has adopted the framework of a company with an Audit & Supervisory Board system as its base while integrating the superior functions of a company with Nomination Committee, etc.

Corporate Governance Report

Here you can view the Corporate Governance Report of TOTO Group

Penetration of Common Group Philosophy

The TOTO Group has developed a philosophy system for TOTO Group management. This includes a common Group philosophy, representing the inherited values of TOTO that will be carried forward into the future. Also, our philosophy system includes visions for business activities representing the direction of our action to be reviewed in accordance with the demands of the times. All of our business activities are based on this philosophy system.
(*For more details, please refer to the "Philosophy System" section of "About TOTO".)
In order to strengthen our corporate governance, we are putting especial effort into ensuring the penetration of our Common Group Philosophy.

PDCA cycle for Penetration of Common Group Philosophy

Tap to zoom.

PDCA cycle for Penetration of Common Group Philosophy

* Common Group Philosophy: Company mottos, TOTO Group Corporate Philosophy,
Charter of TOTO Group Corporate Behavior

Establishment of TOTO Group Business Conduct Guidelines (*1)

The Business Conduct Guidelines, which state the concrete policy directions for the realization of the company's management philosophy, were published in 13 languages and are applicable to each and every employee working at the TOTO Group.
In addition, in order to ensure all employees abide by these Business Conduct Guidelines, relevant education and training programs are being promoted within the Group.

TOTO Group Business Conduct Guidelines

Implementation of Employee Awareness Survey (*2)

An employee awareness survey targeted at employees of TOTO and Group companies in Japan is conducted every year with the aims of keeping track of employee motivation and the level of organizational activity, and using that information to improve the operations of organizations within the Group.
The awareness survey involves the anonymous collation of responses by organization and employment type to questions related to "Penetration of philosophy," "motivation of employees," "level of interconnection and solidarity between individual expectations and company's management goals", "degree of developing environment to activate employees". The survey results at the entire Group and organizational level are then shared with the employees to facilitate the creation of action plans to reinvigorate the workplace.
We will continue to bolster the dissemination of our management strategy, and maintain and reinforce the organizational culture of the TOTO Group through the implementation of this survey.

Compensation for Directors and Audit & Supervisory Board Members

(1) Policy for determining compensation for individual Directors (Basic Policy for Directors’ Compensation)

Compensation for Directors of TOTO comprises the base compensation, bonus, and restricted stock compensation, and the Compensation Advisory Committee and the Board of Directors confirm the following:

  • Payment is to be made in accordance with the contents and to the extent approved at the General Meeting of Shareholders.
  • The decision process and allocation balance of Directors’ compensation are reasonable and objective.
  • Directors’ compensation is in line with the Articles of Incorporation, resolutions at the General Meetings of Shareholders, and the Basic Policy for Directors’ Compensation.

The Basic Policy for Directors’ Compensation is as follows.

<Basic Policy for Directors’ Compensation>

  1. The compensation system shall motivate Directors to manage the Company in such a way as to share common interests with the shareholders, answer their expectations from a medium- to long-term perspective, realize the corporate philosophy of the TOTO Group, and continuously increase corporate value.
  2. The compensation system shall be appealing and attract excellent and diverse human resources to lead the TOTO Group in the future.
  3. The Compensation Advisory Committee and the Board of Directors shall confirm that its decision process and allocation balance of Directors’ compensation are reasonable.

Based on this Basic Policy for Directors’ Compensation and the report of the Compensation Advisory Committee, the 145th Ordinary General Meeting of Shareholders held on June 29, 2011, the 152nd Ordinary General Meeting of Shareholders held on June 26, 2018, and the 155th Ordinary General Meeting of Shareholders held on June 25, 2021, approved the upper limit of compensation for Directors as follows:

<Resolutions at General Meetings of Shareholders on Compensation for Directors>

  Base compensation (Fixed compensation) Bonus (Performance-based compensation) Restricted stock compensation
Directors Up to 500 million yen per annum *1
(including an amount of up to 50 million yen in total for Outside Directors*2)
Up to 0.8% of the previous fiscal year’s consolidated operating income *1 Up to 300 million yen per annum and up to 100,000 stocks *3

*1Resolutions at the 145th Ordinary General Meeting of Shareholders on June 29, 2011 (Number of Directors participating in the resolutions: 14)

*2Resolutions at the 152nd Ordinary General Meeting of Shareholders on June 26, 2018 (Number of Directors participating in the resolutions: 13)

*3Resolutions at the 155th Ordinary General Meeting of Shareholders on June 25, 2021 (Number of Directors participating in the resolutions: 12)

<Compensation Determination Processes>

TOTO resolved a policy determining compensation for Directors at the board meeting held on February 26, 2021. As for the resolutions, we consulted the Compensation Advisory Committee on the contents and received a report in advance.
We have confirmed that compensation for Directors and the determination processes are in accordance with the Basic Policy for Directors’ Compensation, after reviewing the compensation for individual Directors this fiscal year from diversified perspectives at the Compensation Advisory Committee. The Board of Directors respects the report from the Compensation Advisory Committee and believes that the compensation is in line with the basic policy.
The Board of Directors has delegated its authority to determine the following for Directors’ compensation to the President and Representative Director Noriaki Kiyota.

  • Monthly basic compensation for each position
  • Bonus (in aggregated amount) allocation reference points for each position
  • Whether or not to make individual bonus reduction assessments and the details if made
  • Allocation criteria for each position for stock compensation

The reason for the delegation is that we decided that the chief executive officer, the representative director, is suitable to appropriately evaluate the performances of Directors, who direct and supervise the operations of their departments, in a comprehensive manner while considering corporate-wide performance. As for the execution of delegated authority, determination by the President and Representative Director Noriaki Kiyota on Directors’ compensation must be discussed with the Compensation Advisory Committee, which then must ensure and report that the decision process and allocation balance are reasonable and objective and are in line with the Articles of Incorporation, resolutions at the General Meetings of Shareholders, and the Basic Policy for Directors’ Compensation.

<Conditions for Payment of Compensation>

(Basic compensation)

Basic compensation for Directors is fixed compensation and paid to Directors after monthly compensation is set based on their titles and duties.

(Bonuses)

The purpose of bonuses for Directors (excluding Outside Directors and hereinafter called “Eligible Directors”) is to increase their motivation and morale towards performance improvement and share value with stakeholders and employees. The total amount of bonuses is calculated, divided into the Bonus Based on Single-Year Performance, and the Bonus Based on Multi-Year Performance and based on consolidated operating income.
The reason consolidated operating income is selected as a performance indicator is that income is directly related to businesses, and we determined that incentives would be appropriately distributed based on performance improvement.
Bonuses are paid to Eligible Directors after prorating the calculated total amount according to the defined bonus (in aggregated amount) allocation reference points and completing individual bonus reduction assessments. Payments shall be made once a year, and the details are as follows.

  • Bonus Based on Single-Year Performance: The amount of payment shall be up to 0.6% of the consolidated operating income for the previous fiscal year.
  • Bonus Based on Multi-Year Performance: The maximum amount of bonuses up to 0.15% of the immediately preceding fiscal year’s consolidated operating income shall be paid if the following two criteria are achieved.
    1. The average consolidated operating income over the past three consecutive fiscal years with the immediately preceding fiscal year as the final year shall exceed the average consolidated operating income over the past three consecutive fiscal years with the fiscal year immediately before the immediately preceding fiscal year as the final year.
    2. ROE for the immediately preceding fiscal year shall be 5.0% or higher.

In the event that net profit for the previous fiscal year in the consolidated business attributable to the parent company’s shareholders is a deficit, no annual bonus shall be paid.

(Restricted stock compensation)

The purpose of restricted stock compensation granted to Eligible Directors is to encourage them to consistently improve corporate value and further share value with shareholders and employees, and this compensation is designed to motivate Eligible Directors to achieve management targets from not only a single-year but also a medium- to long-term viewpoint.
The Eligible Directors shall pay in all the monetary compensation claim as property contributed in kind based on resolutions of the Board of Directors and receive the issuance or disposal of the common stock of the Company.
TOTO has allocation criteria for each position in place. The amount to be paid per share shall be determined by the Board of Directors based on the closing price of the shares of common stock of the Company on the Tokyo Stock Exchange on the business day immediately preceding the date of the resolution of the Board of Directors (or, if there is no closing price on such business day, the closing price on the trading day immediately prior thereto), and within the scope that will not be particularly favorable to Eligible Directors who subscribe to the common stock of the Company.
In the case of the resulting issuance or disposal of the common stock of the Company, a contract regarding the grant of the restricted stock has been concluded between the Company and the respective Eligible Directors.
In the event the Company conducted a stock split (including gratis allocation of the Company's common stock) or a reverse stock split, or any reasons for adjusting the total number of the common stock of the Company to be issued or disposed of as restricted stock, the total number shall be adjusted to the extent reasonable.

・Overview of the Contract regarding the Grant of Restricted Stock

1. Transfer Restriction Period For 30 years from the allotment date
2. Type of stocks to be issued or disposed of Common stock
3. Grantees Eligible Directors
4. Allotment method for stocks to be issued or disposed of By the method to allot restricted stocks
5. Conditions for cancellation of the transfer restrictions Under the condition that an Eligible Director has been a Director and Audit & Supervisory Board member during the transfer restriction period, the transfer restriction shall be lifted at the following points in time.
  • When the transfer restriction period expires
  • Immediately after the Eligible Director retires as a Director and Audit & Supervisory Board member (Only in the case of completion of the term of office or death, or if there is another justifiable reason)
6. Free acquisition by the Company Any restricted stocks falling under any of the following shall be rightfully acquired free of charge by the Company.
  • Stocks whose transfer restrictions are not lifted at the time of expiration of the transfer restriction period or cancellation of the transfer restrictions as specified in the above item 5
  • All or part of the restricted stock allotted to a director in the case that the person has engage in misconduct, such as a violation of laws and internal regulations, or the person has been deemed so by the Board of Directors

<Determination Policy for Compensation Proportion>

Among the compensation for Eligible Directors, because of the nature of the bonus being distributed based on the consolidated operating income as a performance indicator, the proportion of compensation largely varies depending on the figure. Therefore, the proportion is calculated based on the consolidated operating income that is first disclosed in the earnings briefing and included in the consolidated earnings forecast (full year) in the fiscal year.
From the above, the determination policy for the proportion of compensation for Eligible Directors in FY 2021 is as follows.

Base compensation (Fixed compensation) Bonus (Performance-based compensation) Restricted stock compensation
40% 40% *1, *2 20%

*1 Consolidated operating income: 44 billion yen (figure disclosed in the earnings briefing on April 28, 2021)

*2Bonus Based on Multi-Year Performance is estimated to be granted.

As for Outside Directors, who are independent in position from the execution of business, only base compensation shall be paid.

(2) Policy for determining compensation for individual Audit & Supervisory Board members

As for Compensation for Audit & Supervisory Board members, only base compensation shall be paid. The 145th Ordinary General Meeting of Shareholders held on June 29, 2011, approved that the limit of compensation for Audit & Supervisory Board members shall not exceed 150 million yen per annum. The base compensation for individual Audit & Supervisory Board members is determined depending on assigned duties and responsibilities upon consultation with Audit & Supervisory Board members.

<Resolutions of General Meetings of Shareholders on Compensation for Audit & Supervisory Board Members>

  Base compensation (Fixed compensation) Bonus (Performance-based compensation) Restricted stock compensation
Audit & Supervisory Board Members Up to 150 million yen per annum *

*Resolutions at the 145th Ordinary General Meeting of Shareholders on June 29, 2011 (Number of Audit & Supervisory Board members participating in the resolutions: 4)

(3) Totals and breakdown of compensation for Directors and Audit & Supervisory Board members

  #of personnel Base compensation Bonus *1 Restricted stock compensation *2 Total
Directors 16 Million yen
387
Million yen
247
Million yen
107
Million yen
742
(Outside Directors among Directors) (4) (36) - - (36)
Audit & Supervisory Board members 5 95 - - 95
(Outside members of the Audit & Supervisory Board among the Audit & Supervisory Board members) (2) (24) - - (24)
Total 21 483 247 107 838

*1Achievement of performance indicator: Consolidated operating income of 41.4 billion yen (Bonus Based on Multi-Year Performance is not granted)

*2Please refer to the <Stock status delivered to directors as compensation for the performance of their duties in the current fiscal year>

<Stock status delivered to directors as compensation for the performance of their duties in the current fiscal year>

  Those who were issued to # of stocks
Directors (except for Outside Directors) 9 24,100 stocks

(Note) Stocks were not issued to Outside Directors and Audit & Supervisory Board members.

(4) Amounts of compensation by compensation type for Directors whose total amount of compensation is 100 million yen or more.

Directors whose total amount of compensation is 100 million yen or more in this term.

  Base compensation Bonus Restricted stock compensation Total
Representative Director Madoka Kitamura Million yen
63
Million yen
50
Million yen
17
Million yen
131
Representative Director Noriaki Kiyota
63

50

16

129

Outside Directors and Outside Members of the Audit & Supervisory Board

Since all Outside Directors and Outside Members of the Audit & Supervisory Board are invited to join their respective boards as members who can make decisions materially independent of the management of TOTO and all other specific stakeholders, we designate all Outside Directors and Outside Members of the Audit & Supervisory Board as Independent Directors/Audit & Supervisory Board Members.
We nominate candidates for Outside Directors and Outside Members of the Audit & Supervisory Board who fully satisfy the Nominating Advisory Committee’s Requirements for Independent Directors/Audit & Supervisory Board Members [see (Note) below], the satisfaction of which is set forth by TOTO as a mandatory requirement.

(Note) Requirements for Independent Directors/Audit & Supervisory Board Members

  1. a person who has experience in business management above a certain level, or a professional or an external expert in business management (a company owner with significant past achievements, a specialist in the investment banking business, a lawyer, a certified public accountant, a researcher who mainly studies the Companies Act or other acts, or any similar person);
  2. a person who is not or has not been a Director (except for an Outside Director; the same is applied hereinafter), an Audit & Supervisory Board Member (except for an Audit & Supervisory Board Member, Outside; the same is applied hereinafter), an accounting advisor, an Executive Officer, a manager or any other employee (collectively, the "Director") of the Company, its Subsidiary or Affiliate Companies (collectively, the "Company Group");
  3. a person who is not the spouse or a relative within the third degree of relationship of a current or former Director of the Company Group (except for a person who is not a principal of the Company);
  4. a person who, during the most recent five years, has not served as a Director in a financial institution that is a major loan provider for the Company Group;
  5. a person who, during the most recent five years, has not served as a Director in a business associate that has business with the Company Group of 2% or more of the consolidated sales of either such business associate or the Company Group in any fiscal year during the recent five fiscal years;
  6. a person who is not a lawyer, a certified public accountant, or a consulting or other professional service provider (if such service provider is a corporation, association or other entity, a person who belongs to such entity and a person who belonged to such entity during the most recent five years) who received from the Company Group a compensation totaling 10 million yen or more in any fiscal year during the most recent five fiscal years; or
  7. a person who is not a Director of a company which is the Company's major shareholder or whose major shareholder is the Company, or who is not a Director of a parent company, subsidiary or affiliate of such company.

(1) Current Independent Directors/Audit & Supervisory Board Members

Position Name Reason for appointment as Independent Director/Audit & Supervisory Board Member
Outside Director Masatsugu
Shimono
With many years of management experience at IBM Japan, Ltd., Mr. Shimono has been providing us with valuable opinions based on the knowledge accumulated in his career as a corporate management specialist. TOTO expects that he will continue to harness his views, which are not bound by conventional frameworks, for management by providing experience and knowledge of general management, corporate governance, management of a global company, and IT and by fully exercising his supervising skills. Therefore, the Company selected and reappointed him an outside director. He will have served in this position for five years as of June 25, 2021, when the 155th ordinary general meeting of shareholders is concluded.
Junji
Tsuda
With many years of management experience at Yaskawa Electric Corporation, Mr. Tsuda has been providing us with valuable opinions based on the knowledge accumulated in his career as a corporate management specialist. TOTO expects that he will continue to harness his views, which are not bound by conventional frameworks, for management by providing experience and knowledge of general management, corporate governance, management of a global company, and human capital strategies and by fully exercising his supervising skills. Therefore, the Company selected and reappointed him an outside director. He will have served in this position for three years as of June 25, 2021, when the 155th ordinary general meeting of shareholders is concluded.
Shigenori
Yamauchi
With many years of management experience at UACJ Corporation, Mr. Yamauchi has been providing us with valuable opinions based on the knowledge accumulated in his career as a corporate management specialist. TOTO expects that he will continue to harness his views, which are not bound by conventional frameworks, for management by providing experience and knowledge of general management, corporate governance, and management of a global company as a professional manufacturer and by fully exercising his supervising skill. Therefore, the Company selected and reappointed him an outside director. He will have served in this position for one year as of June 25, 2021, when the 155th ordinary general meeting of shareholders is concluded.
Audit & Supervisory Board Member, Outside Shuichi
Sarasawa
Mr. Shuichi Sarasawa has been involved with the administration of Central Glass. Through many years of experiences, he has the experience and knowledge of general administration and corporate governance of global companies, as well as a wide range of experience and knowledge from chemistry to semiconductors.
Based on the above, TOTO believes he is highly capable of auditing the business execution of general management; therefore, TOTO selected and appointed him again as an outside auditor. He will be serving as an outside auditor for two year as of June 25, 2021, when the 155th ordinary general meeting of shareholders is concluded.
Yasushi
Marumori
Mr. Yasushi Marumori has been involved in the administration of financial institutions for many years. He has gained experience and knowledge in finance and corporate governance throughout his career, as well as abundant experience and knowledge as an auditor at listed companies.
Based on the above, TOTO believes he is highly capable of auditing the business execution of general management; therefore, TOTO selected and appointed him again as an outside auditor. He will be serving as an outside auditor for two year as of June 25, 2021, when the 155th ordinary general meeting of shareholders is concluded.

(Note) When nominating Independent Directors/Audit & Supervisory Board Members, after confirming that the Judging Criteria Regarding Independence stipulated by the stock exchange is not contradicted and that the Requirements for Independent Directors/Audit & Supervisory Board Members stipulated by TOTO are met, the Independent Directors/Audit & Supervisory Board Members are decided upon at the Meeting of the Board of Directors.

(2) Main Activities in Fiscal 2020

1. Outside Director

Name Attendance of the Meetings of the Board of Directors Main activities
Masatsugu
Shimono
Attended 12 of the 12 meetings Shimono has been involved with the administration of Japan IBM for many years. He offered valuable opinions at board meetings as an expert in business administration based on his abundant experience. He exercised his role as a supervisor by reflecting unconventional perspectives in the company administration.
He provided a wide range of opinions on issues from governance to business administration based on global perspectives especially at board meetings. He provided a wide range of opinions on issues from IT strategies to business administration based on global perspectives, especially at Board meetings.
Junji
Tsuda
Attended 12 of the 12 meetings Tsuda has been involved with the business administration of Yasukawa Electric Corporation for many years. He has offered valuable opinions at board meetings based on his expertise in business administration based on many years of experience. His unconventional perspectives are reflected in the company administration as he also executes supervisory duties.
He provided a wide range of opinions on issues from human capital strategies to business administration based on global perspectives, especially at Board meetings.
Shigenori
Yamauchi
Attended 10 of the 10 meetings Mr. Yamauchi provided valuable opinions based on the knowledge accumulated as a corporate management specialist in his career listed in the previous section (1) “Reasons for Nomination of Independent Directors.” He harnessed his views, which were not bound by conventional frameworks, for management and fully exercised his supervising skills.
He provided a wide range of opinions on issues from investment strategies to business administration based on global perspectives, especially at Board meetings.

2. Audit & Supervisory Board Member, Outside

Name Attendance of the Meetings of the Board of Directors Attendance of the Meetings of the Audit & Supervisory Board Main activities
Shuichi Sarasawa Attended 12 of the 12 meetings Attended 12 of the 12 meetings Sarasawa has appropriately executed his duties as an outside auditor based on his experience and knowledge of general management and corporate governance of global companies, which he has developed in his career listed in the previous section (1) “Reasons for Nomination of Independent Directors.” He provided a wide range of opinions on business administration and risk management as well as environmental measures based on global perspectives, especially at meetings of the Board of Corporate Auditors and Board of Directors.
Yasushi Marumori Attended 12 of the 12 meetings Attended 12 of the 12 meetings Marumori has appropriately executed his duties as an outside auditor based on his experience and knowledge of finance and corporate governance, which he has developed in his career listed in the previous section (1) “Reasons for Nomination of Independent Directors.” He provided a wide range of opinions on business administration and risk management as well as governance based on global perspectives, especially at meetings of the Board of Corporate Auditors and Board of Directors.