Risk Management and Compliance

Toshiba Group conducts business activities, giving the highest priority to life, safety, and compliance with laws and regulations, and social and ethical norms. In order to respond appropriately to the globalization and diversification of business, and to changes in laws and regulations in every country of the world, Toshiba Group has established systems to address various risks.

Toshiba Group has set up three lines of internal control system, with the relevant business divisions as the front line, the administrative divisions as the second, and the audit divisions as the third. The system is designed to effectively manage risks by assigning to each line a clearly defined role and set of duties, which it carries out appropriately, at the same time exercising a checks-and-balances function.
Toshiba’s shares were designated as securities on alert due to the inappropriate accounting issues that occurred in 2015, but the Company worked to improve its internal control system* and was designated as a First Section issue again in January 2021. Thereafter, Toshiba became a non-listed company on December 20, 2023, but we will continue to work to maintain and strengthen our internal control system.
At Toshiba Group, we formulated and are striving to entrench the Standards of Conduct for Toshiba Group (SOC) as a specific action guideline since we are a company that contributes to the realization of a sustainable society while conducting fair, sincere and highly transparent business activities. We are also working toward making the SOC an integral part of the entire Toshiba Group. The SOC is one of the Toshiba Group’s important basic guidelines, and therefore, its revision requires approval by the Board of Directors.
At Toshiba Group, top management regularly issues messages on compliance to clarify its stance and to foster a culture in which compliance is prioritized across the entire Group.

• For information on Toshiba’s efforts to improve its internal control system, please refer to the Report on Improvements of Internal Management System dated October 20, 2017 (Japanese) (PDF)(508KB) and the Progress Report on Improvements of Internal Management System dated July 25, 2018 (Japanese) (PDF)(496KB).

Toshiba has separate management systems for compliance and other risks and business risks. Business risks refer to uncertain factors that may prevent the achievement of business and project objectives on strategic decision-making and execution of business activities.

To address compliance and other risks, we appoint a Chief Risk Compliance Management Officer (CRO) to oversee risk management and compliance for the whole Group.
An executive in charge of legal affairs and compliance serves as the CRO. In addition, under the CRO, the Legal & Compliance Division responds to whistleblower reports, attempts to achieve global compliance, aims to strengthen the whistleblower system, and is advancing effective risk management and compliance activities.
The CRO chairs the Risk Compliance Committee, which is attended by relevant executive officers, including the President and CEO. In response to the inappropriate accounting treatment in 2015, the Committee deliberates matters related to accounting compliance as well as analyzes whistleblower reports and cases both inside and outside the Company. At the beginning of the year, the Committee evaluates the impacts of risks and the status of risk control in accordance with the risk table that covers compliance risks based on the Standards of Conduct for Toshiba Group. It then determines priority measures of the immediate fiscal year. The Risk Compliance Committee is a second-line organization, but the auditors and the head of the Internal Audit Department also attend to share information and exchange views with third-line organizations. The agenda deliberated by the Committee is reported to the Board of Directors. The agenda deliberated at the committee is reported to the Board of Directors. In FY2023, the Risk Compliance Committee met four times.
In response to the inappropriate accounting treatment in 2015, Toshiba has worked to strengthen accounting compliance by establishing a special accounting compliance system. In order to further strengthen the overall compliance system, from FY2021, we evolved the system into one that encompasses accounting compliance and other types of compliance, and began promoting centralized management.
Toshiba operates a risk management system (RMS) incorporating a PDCA cycle* led by administrative divisions at the second line of internal control system.
With the RMS, we implement the Risk Assessment Program (RAP) to assess risks of Toshiba Group companies. The administrative divisions provide guidance to improve the compliance risks identified. At the same time, the relevant business divisions at the front line of internal control system themselves work to identify and mitigate the risks autonomously.

Furthermore, since FY2020, we have systematically organized fraud risk scenarios related to financial reporting and accounting, and conducted inspections on Group companies to understand the status of their fraud risk, while strengthening guidance to improve such status.
In the event of a serious compliance-related incident, there is a system in place by which such incident is reported immediately to CEO,Corporate Senior Executive Vice President(SEV), CRO, Corporate Auditors among others, through the reporting system.

Under these systems, the relevant in-house committees, etc. promptly evaluate and implement countermeasures.

Meanwhile, Toshiba deals with business risks by clarifying management decision criteria, permissible risk limits and corporate policy on business withdrawal in making management decisions for business execution to achieve Toshiba Group’s sustainable growth and increase corporate value. In addition, for each risk case, the Business Risk Review Committee conducts risk assessment, identifies the maximum risk, and establishes items for monitoring.
In the future, we aim to build a system (ERM) that integrates and centrally manages business risks and compliance risks.

• Plan: Identification and assessment of risks; Do: creation and operation of rules; Check: review and fact-finding surveys; Action: formulation and implementation of improvement plans

• The Risk Compliance Committee manages matters related to the Standards of Conduct for Toshiba Group and matters related to risk management and compliance.
• CPL is an abbreviation combining CL (contractual liability) and PL (product liability).

In order to create an open work environment, Toshiba is enhancing its whistleblower system, on top of preventing risks by stimulating day-to-day communication in each workplace.
For whistleblowing and consultation, we have established the Toshiba Hotline, the Toshiba Group Overseas Hotline, and the Corporate Auditor Hotline for our employees as well as the Clean Partner Line for business partners. In addition, we use the Engagement and Remedy Platform of the Japan Center for Engagement and Remedy on Business and Human Rights (JaCER) for whistleblowing and consultation on human rights issues from all stakeholders.
The whistleblower system provides prompt, appropriate responses at all points of contact while giving due consideration to privacy. Specifically, each Group company has stipulated in its regulations a confidentiality obligation and a prohibition on unfavorable treatment of whistleblowers; has prepared manuals for persons in charge of whistleblowing to ensure the same; and has continued to make improvements through periodic audits. We also provide training on the structure of the whistleblower system and make employees aware of its existence through e-learning and employee websites. Toshiba Group in Japan maintains and operates a response system that complies with the amended Whistleblower Protection Act.

We have established the Toshiba Hotline for domestic employees and the Toshiba Group Overseas Hotline for overseas employees. We accept consultations by phone and e-mail regarding workplace culture, interpersonal relations, personnel treatment, harassment, and other matters.
E-mail support is available 24/7 and we accept reports in English for employees of Toshiba Group companies in Japan who have difficulty reporting in Japanese. We have moved the point of contact for receiving whistleblower reports to an external organization, further strengthening anonymity and making it easier and more reassuring to make a report. We have also established a point of contact at an external attorney’s office, primarily in order to receive information that may concern violations of law.
Each Toshiba Group company has its own whistleblower system. In addition, employees of the Toshiba Group in Japan can use the aforementioned Toshiba Hotline. Besides the whistleblower system at each company, we introduced the Toshiba Group Overseas Hotline for Toshiba Group companies overseas, by designating each Regional Representative Subsidiary as the secretariat for the corresponding region so as to cover laws and regulations and languages for different countries and regions.

We have established a Corporate Auditor Hotline that enables employees to make reports directly to corporate auditors on matters involving top management without fear of retaliation. In addition, corporate auditors have access rights to the Toshiba Hotline, and they provide appropriate guidance and oversight.

To prevent compliance violations by suppliers, we established a supplier whistleblower system called the Clean Partner Line in April 2006 in order to receive whistleblower reports from suppliers.

For whistleblower reporting and consultation on human rights issues involving any of our stakeholders, including local communities, customers, and secondary and subsequent suppliers with whom we have no direct business relationship, we utilize the Engagement and Remedy Platform of the external specialist organization JaCER.

The numbers of reports received and consultations undertaken by the Toshiba Hotline, the Auditor Hotline and the Overseas Hotline in FY2023 are as follows. We notified employees about the existence of the system and its assurance of strict anonymity through e-learning. We also reported on whistleblower cases to the whole Company on a number of occasions.

• Including duplicate reports received by the internal secretariat

• Other items include consultations on manners, ethics, and work content.

Of the whistleblower reports received, Toshiba strived to investigate all facts on cases of possible legal violations or fraud to identify the cause, and handled cases for which the facts were confirmed rigorously and imposed appropriate disciplinary sanctions on the offenders and implementing such measures to prevent recurrence. When a reported case was not a legal violation but there were or likely to be inappropriate situations, we provided instructions for improvement or issued alerts in cooperation with the relevant division. In cases involving consultations and questions about duties of the informants themselves, we gave advice on how to deal with the situation. For reports other than anonymous reports, we explained the status of our responses to the whistleblowers, in principle.All of these responses were carried out in accordance with the principles of maintaining confidentiality and of prohibiting any disadvantageous treatment.

In addition, out of the whistleblower reports, cases that everyone should bear in mind are taught as part of employee training after generalizing the cases. The number of reports received is released regularly on the company’s internal website.

Major business risks and compliance and other risks identified by and countermeasures taken by Toshiba Group are as follows.

Toshiba Corporation has identified about 20 categories and 60 items for risks, including compliance-related risks. At the beginning of each fiscal year, we evaluate the likelihood of each item occurring and the impact it may have, and then we create a heat map for each risk to determine the priority of response. For FY2023, quality, CPL, health and safety, the environment, and bribery were identified as high priority areas.
Toshiba operates a Risk Management System (RMS) that incorporates a PDCA cycle led by administrative divisions as a second line of the internal control system to centrally track and promote improvements in compliance and risk management initiatives at each Toshiba Group company. Under the RMS, each Toshiba Group company implements a risk assessment program (RAP). Through the RAP, questionnaires are distributed to all relevant sites for each selected compliance risk theme every fiscal year, and self-inspections and audits are conducted. If problems are identified as a result of such self-inspections and audits, the administrative division provides guidance for improvement, and the business divisions themselves, which are on the front lines, carry out autonomous improvements and corrections.
Among the measures to address compliance and other risks in FY2023, we focused on the following as company-wide priority measures: promoting and strengthening quality compliance; reducing safety and health risks as well as occupational accidents; strengthening compliance with anti-bribery laws at overseas subsidiaries; ensuring proper use of software; and preventing fraud by thorough management of petty cash and cash equivalents. The results of the activities implemented for all of these priority measures are reported to the Risk Compliance Committee.

Since the inappropriate accounting issues in FY2015, Toshiba Group has made efforts to continuously enhance its internal control. However, fraudulent transactions by an employee of Toshiba International Corporation and fictitious and cyclical transactions at Toshiba IT-Services Corporation were discovered in 2019 and 2020, respectively. We conducted a thorough investigation on those matters, carried out comprehensive verification within Toshiba Group, and rolled out measures to prevent recurrence.

As a preventative action against fraud, every year we systematically organize scenarios of fraud risks in specific areas, including fraud risks in financial reporting and accounting, and then conduct inspections of each Group company to ascertain the actual situation, and strengthen guidance for improvement. In FY2023, we conducted inspections of fraud risks related to cash and deposit management, purchasing, and fixed asset management.
In the event of fraud, we conduct an investigation of all facts to identify the cause of any such occurrences, handle the facts seriously, make every effort to prevent recurrence, and disclose information in a proper, timely manner as necessary.

Any employees involved with cases of fraud are handled rigorously, including through the implementation of disciplinary action.

Toshiba Group maintains a policy of zero tolerance against fraud.

Following the December 2023 delisting, Toshiba announced Toshiba’s Revitalization Plan: Toshiba’s Restart: Becoming the Company Society Needs in May 2024. We view the delisting as an opportunity to fundamentally resolve Toshiba’s structural issues and to return to “what Toshiba ought to be.” We aim to be a company that can contribute to society through GX and DX, responding to changes in the world and social issues faced by many companies with the power of technology and the basic commitment of “Committed to People, Committed to the Future.” To do so, we will invest sufficient resources in people, business, and technology development; raise the entire Company’s profitability; and achieve profit growth by realizing the full potential of each of our businesses.

Toshiba Group’s businesses require highly advanced technology for their operation and are exposed to fierce global competition. As a result, we are constantly affected by changes in the business environment, such as investment trends in and outside Japan, increases in material and personnel costs, fiercer competition with other companies, and exchange rate fluctuations. Although the gradual economic recovery is expected to continue, there are concerns about the future of the Chinese economy, rising prices, the situation in the Middle East, fluctuations in financial and capital markets, and the impact of the Noto Peninsula earthquake on the domestic economy. As uncertainty continues to grow, we will continue to monitor developments closely and work as a Group to minimize risk.

Toshiba Corporation and Toshiba Group consider the impacts of climate change to be significant important risks, and we are analyzing the impacts on our business in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). We are working to strengthen our systems and activities to address these issues, anticipating an increase in natural disasters due to global warming as a physical risk, an increase in costs due to regulatory compliance as a risk associated with the 1.5°C scenario transition, a loss of sales opportunities due to delays in technological responses, and a decline in reputation due to delays in responding to climate change.

Meanwhile, with the aim of contributing to the realization of carbon neutrality, which is one of our business strategies, we view the expansion of demand for decarbonized energy technologies as well as energy-saving products and services as an opportunity, and we are promoting the creation of energy technologies such as those for renewable energy, energy aggregation, and CO₂ capture technologies as well as highly energy-efficient social infrastructure products and building-related products.

At Toshiba Group, top management consistently delivers messages on compliance so as to clarify the company’s position, while the entire Toshiba Group works to raise compliance awareness and improve corporate culture.

In FY2023, we held a Senior Manager Compliance Seminar for Corporate Officers of Toshiba and senior management of Toshiba Group in Japan once with an outside legal counsel as lecturer. The seminar was participated in by around 220 employees each time, including online participants.
In addition, we provide accounting compliance education through e-learning to deepen employees’ understanding about the internal control and J-SOX（Internal Control Reporting System）. In FY2023, all employees (approximately 74,000) of 84 consolidated subsidiary Group companies in Japan and all employees (approximately 26,500) of 87 overseas Group companies participated in the seminar. Going forward, we will continue to implement these training and education programs.

Toshiba Group has created the Standards of Conduct for Toshiba Group (SOC)in 24 languages and made them available on the internal website. Various compliance education programs that incorporate the SOC have been included in the level-based training upon promotion, occupation-based training and senior management seminars. We are also continuing our e-learning programs (FY2023 attendance rate: 99.4% in Toshiba Group in Japan and 100% in overseas Group companies) for executives and all employees (including contract employees and temporary employees).

Each workplace holds meetings focusing on CSR to raise the awareness of each and every employee with regard to compliance matters so as to make compliance an integral part of the corporate culture.
These meetings aim to prevent compliance violations by encouraging managers and employees to discuss various problems that are likely to arise in the workplace and to share their thoughts with each other in order to create a work environment where they can easily seek advice on all kinds of problems.

Toshiba operates a risk management system (RMS) incorporating a PDCA cycle led by administrative divisions at the second line of the internal control system. (Please refer to the section above, “Major Risks Identified and Their Countermeasures.”)

In addition, at the third line of defense, the Internal Audit Division conducts compliance-related audits of Group companies.
Toshiba conducts an employee questionnaire survey each year and questionnaires with e-learning participants about the Standards of Conduct for Toshiba Group to check the degree of penetration of the standards and the level of compliance awareness among employees. This helps it to develop measures for further improvement.

In accordance with the Standards of Conduct for Toshiba Group and various internal regulations, Toshiba Group’s policy prohibits illegal or improper payments against sound business practices and each country’s laws and regulations.

In keeping with this approach, the Toshiba Group is a signatory to the United Nations Global Compact and works globally to comply with antitrust and competition law and prevent corruption.
Furthermore, we request suppliers to agree to and practice the Toshiba Group Procurement Policy.

In response to global regulatory trends, Toshiba engages in rigorous efforts, led by the Chief Risk Compliance Management Officer (CRO), to ensure compliance with antitrust laws and to prevent bribery and other forms of corruption based on the structure of risk management and compliance promotion. For both, it has established compliance programs reflecting laws and regulations in Japan and overseas as well as associated sets of guidelines. Those guidelines clearly define prohibited acts such as cartels, bribery and facilitation payments. In addition, the compliance programs and guidelines stipulate an internal system, along with advanced vetting procedures ahead of meeting with government officials and a due diligence policy to understand the risks of bribery with related parties. Furthermore, we conduct robust education programs, self-audits, etc., in accordance with the provisions of the compliance programs.
Toshiba also conducts compliance training on themes including compliance with the Antimonopoly Act and prevention of bribery as part of measures to promote compliance awareness anchored in the Standards of Conduct for Toshiba Group. Going forward, we will strive to enhance the content of such education programs and increase the number of target companies.
In addition, through the annual risk assessment program targeting each Toshiba Group company (excluding listed subsidiary groups and dormant companies, etc.), in FY2023, Toshiba made efforts to identify operating status and took measures to raise awareness. In response to the issues brought to light through this process and the matters pointed out in the internal audits, etc., we are revising regulations and implementing thorough training as part of our on-going efforts to strengthen compliance with anti-trust laws and prevent bribery.
To prevent violations and early detect situations leading to violations, Toshiba established the whistleblower system for employees and the Clean Partner Line for suppliers and business partners as a system to report violations or suspected violations, and encourages the use of said system.
Furthermore, Regional Representative Subsidiaries in major global regions support Toshiba Group companies overseas, serving as a foundation for risk management in such regions. This has been done in order to appropriately control risks associated with relevant anti-trust laws, bribery, and the like, which has been rising mainly in emerging countries, and to ensure thorough compliance in global business.

• Standards of Conduct for Toshiba Group  7.Bribery

• Standards of Conduct for Toshiba Group 7. Bribery

While the Standards of Conduct for Toshiba Group forbid inappropriate expenses, they stipulate that appropriate donations to organizations may be made. We therefore donate to various organizations, taking into consideration factors such as the contribution made by the donee organization to society, its cause and community aspects, as specified by the Standards of Conduct for Toshiba Group.

• Standards of Conduct for Toshiba Group 19. Community Relations
• Social Contribution Activities

Toshiba Group is promoting thorough observance of procurement compliance both in its own procurement activities, and in those of its suppliers.
There is a procurement compliance promotion structure established within the Group, which acts in order to carry out each procurement transaction in compliance with the relevant Japanese and international laws and regulations. Information related to compliance concerning procurement is thoroughly informed to Group companies through this system.
Moreover, measures are thoroughly informed by means of Procurement Compliance Liaison Meetings, organized by the Procurement Division Manager and the Procurement Compliance Managers and Coordinators.

In FY2023, in line with a basic policy of strengthening compliance in the procurement process, Toshiba took action to ensure adherence to regulations on legal compliance by checking the operation of each Group company’s procurement processes through investigations of the procurement process and patrols to inspect procurement transactions. In FY2024, we will continue to strengthen the operation of our procurement processes.

Toshiba Group has established a whistleblower system for suppliers and business partners called Clean Partner Line, as a point of contact for our suppliers to tell us about issues or concerns regarding persons associated with the Toshiba Group. Personal information on whistleblowers, without the whistleblower’s consent, is not disclosed to anyone other than the Clean Partner Line staff. Also, what is reported by whistleblowers is handled based on strict procedures, with care taken not to treat whistleblowers and their companies unfavorably for whistleblowing. We notify our business partners of this system and request that they make use of it.

In Japan, we monitor the subcontracted transactions of Toshiba Group in Japan undertaking such transactions. Regarding items requiring improvement, guidance is provided to make improvements to ensure thorough compliance.

At Toshiba Group, various training programs on compliance in procurement are provided to ensure fair trading practices. For example, since FY2007, we have conducted e-learning for employees of Group companies in Japan on relevant acts, such as the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors.
In FY2023, a total of 56,584 Toshiba Group employees in Japan between January and February 2024 participated in the e-learning program on the Subcontract Act.
We also provide compliance education for Procurement staff of Toshiba Group companies in Japan at various phases of their careers.

In 1997, the Board of Directors resolved to end relations with antisocial forces such as sokaiya (groups of racketeers). Since then, the Group has strictly dealt with approaches from third parties to obstruct our lawful and appropriate corporate activities. With regard to this stance, the rejection of the involvement of antisocial groups in our business activities has been explicitly stated in the SOC. By providing e-learning lessons about the SOC to all employees, we continuously ensure that employees understand the importance of excluding antisocial groups from the business they do. In addition, in order to further ensure that all relations with antisocial forces are cut off, all Toshiba Group companies have taken various measures, such as developing and implementing Basic Public Relations Management Rules and appointing public relations management officers for each department. When conducting transactions with a new customer, the public relations management officers of that department confirm that the customer has no relations with antisocial groups. We also periodically conduct surveys on customers that we already have business relations with.
Transaction contracts normally include a clause regarding the exclusion of organized crime syndicates, which enables a contract to be cancelled without notice when the business partner is identified as an antisocial group. Toshiba Group also works with the police, corporate attorneys, and third-party organizations such as the National Center for the Elimination of Boryokudan to establish systems that enable us to respond to approaches from antisocial forces in an appropriate and timely manner.

As indicated in Standards of Conduct for Toshiba Group, Toshiba Group’s basic export policy is to refrain from any transaction that could potentially undermine international peace and security. We comply with all applicable export control laws and regulations of the countries and regions where we operate, for example Foreign Exchange and Foreign Trade Law in the case of Japan and US export control laws and regulations with respect to transactions involving items of US origin.
In accordance with the policy, Toshiba Group has established the Export Control Compliance Program (ECCP). Based on the program, we classify the goods and technology and screen transactions. In addition to periodic export control audits and education for all executives and employees, key Group companies and corporate staff divisions provide instructions and support to the Group companies they supervise.

• Standards of Conduct for Toshiba Group 9. Export Control

※ ECCP: Export Control Compliance Program

Toshiba’s export control system is organized under the Chief Export Control Officer who has ultimate responsibility for the corporation’s export control. The Chief Export Control Officer must be a representative executive officer or an executive equivalent thereto. Under the Chief Export Control Officer, the Legal & Compliance Division Export Control Office is responsible for overseeing the export control implemented pursuant to the Toshiba Export Control Compliance Program (ECCP). Based on the Toshiba ECCP, Toshiba Group companies and corporate staff divisions have their own export control organizations led by the Export Control Officers. The Export Control Officers must be heads of the corporate staff divisions in the case of corporate staff divisions, or presidents of Group companies in the case of Group companies.

The technical department classifies the goods or technology and determines whether export license is required. Then, transaction screening is carried out accordingly, such as confirmation of the end-use, end-user, and final destination. Classification and transaction screening are checked and approved by multiple persons in charge. When trading with concerned countries and regions, the Export Control Office conducts stringent assessments and approvals.

Toshiba’s corporate staff divisions and Toshiba Group companies perform internal self-checks. In addition, the Export Control Office or the supervising department conducts regular audits to check if export control is appropriately performed. Audits are conducted once every one to three years at target companies, and in FY2023, audits were performed for three internal divisions in Japan and five Group companies. Overseas, audits are done in the order of Europe and the United States, Asia and China, and in FY2023, eight Group companies in Asia received audits. Where problems are identified by the audit, we demand that improvement plans be submitted, and check the progress of the plans.

Training courses on export controls (regular and specialized courses) are offered by the Export Control Office for corporate staff divisions and Group companies to educate employees on the importance of export control and to raise awareness and knowledge of the Toshiba Export Control Compliance Program (ECCP) and related internal regulations.
Furthermore, the Export Control Office provides compulsory export control education for all employees of Group companies in Japan through an e-learning system every year.
Export controls at Group companies including those located overseas are modeled after that of Toshiba, which is implemented under the Toshiba Export Control Compliance Program (ECCP). Export control audits are conducted periodically to evaluate their performances.
The Export Control Office holds meetings with corporate staff divisions and key Group companies to communicate on matters such as the international situation, regulatory trends, and specific requirements, and additionally to provide a forum for exchange of information and opinions. Key Group companies provide guidance and support on export control to other Group companies under their control.
Meanwhile, to enhance support for Toshiba Group overseas, we issue a quarterly export control bulletin for local staff working in export control, where we share information on export control-related legal revisions, sanctions, cases of legal violation, and other news.

• Standards of Conduct for Toshiba Group 2. Customer Satisfaction
• Standards of Conduct for Toshiba Group 15. Advertising

• UL Standards: Safety standards established by UL LLC (Underwriters Laboratories Inc.,) that develops standards for materials, products, and equipment and provides product testing and certification.
• CE Marking: A certification mark that indicates conformity with the safety standards of the European Union (EU). CE marking is required for products sold within the European Economic Area (EEA).

In FY2023, with regard to violations of product safety regulations or in-house standards in the lifecycles of our products and services, there was a violation of the Electrical Appliance and Material Safety Law in LED high ceiling light products (Toshiba Lighting & Technology Corporation). There were also no violations of regulations or in-house standards relating to information and labeling of products and services.
Please refer to Product Safety and Product Security for information on our efforts to ensure strict compliance with laws and regulations related to product safety.

As a result of strict compliance with the Antimonopoly Act, the Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices, and the Act Against Unjustifiable Premiums and Misleading Representations by Toshiba Group in Japan, there were no legal violations related to advertising in FY2023.

Based on the Basic Policy on Tax, Toshiba Group complies with legal ordinances, notices, and regulations in various countries and makes efforts to properly file tax returns and pay taxes.

Toshiba Group shall act based on the following three codes, in order to achieve the aims of the basic policy.

Toshiba Group shall carry out the following tax operations, based on the basic policy.

Training for Employees and Use of External Specialists

Tax operations of Toshiba Group companies shall be carried out by their employees who are well-versed in their respective local taxation. Toshiba Group shall provide opportunities to their employees who are involved in tax operations depending on their positions and experience levels. In principle, Toshiba Group shall regularly be reviewed by external specialists to confirm that their tax operations are appropriately carried out in accordance with laws and regulations, and make the final tax-related decisions.

Efforts on International Tax Systems

Toshiba Group shall have a responsibility to carry out cross border transactions with foreign related parties at the arm’s length price, and document the transaction details based on the relevant laws and regulations in the tax jurisdiction.
When carrying out cross-border transactions, Toshiba Group shall confirm whether a tax treaty exists between the relevant countries, and if so, utilize the benefits with full knowledge of the details.

Failure to respond appropriately to large-scale disasters such as earthquakes, typhoons, and floods could result in the long-term closure of operations, triggering significant financial losses, ultimately affecting our stakeholders. Toshiba Group implements measures to ensure the safety of employees and their families, support recovery of devastated areas, and maintain business sites and factories. In addition, we are promoting measures from the perspective of business continuity to enable continued supply or early recovery of products and services in the event we suffer damages or losses.
The Business Continuity Plan (BCP), which we have been formulating and developing Group-wide since 2007, is one such measure. Focusing on our key businesses that have large social and economic impacts, we have established a BCP that assumes potential large-scale earthquakes and new strains of influenza, and continually updates our Plan in order to maintain and improve its effectiveness.
Amidst the spread of COVID-19 infections, we implemented Group-wide countermeasures from two perspectives: “business continuity and fulfillment of social responsibilities” and “securing the safety of employees and society.” To prepare for the worst-case scenario and to protect lives, we proceeded to implement countermeasures, such as stringent restrictions on staff member access to workplaces and drastic alterations to working hours.
Toshiba Group will continue to reinforce its BCP, giving utmost priority to the safety of all employees, so that operations can continue even in the event of a large-scale disaster, such as earthquake, storm, flood or other major disasters, occurring in combination with a pandemic.

In response to the Great East Japan Earthquake and the floods in Thailand, both of which occurred in 2011, Toshiba Group has been working to establish a disaster-resistant procurement system. Based on Toshiba Group’s Procurement Policy, we request our suppliers to cooperate in continuing to provide supplies in the event of an unanticipated disaster.
In 2012, we established the BCP Procurement Guidelines to provide crisis management standards. Also, to minimize the risk of supply chain disruptions and reduce the amount of time required to resolve supply chain disruptions, we have built a system to manage corporate information on suppliers upstream in the supply chain. In the event of an unanticipated disaster, we use this system to quickly investigate its effects on our suppliers worldwide for prompt action.

In response to COVID-19, we have taken necessary countermeasures in collaboration with suppliers to ensure supply in order to minimize the impact on business. Specifically, we have taken measures to minimize the impact on business by ascertaining the levels of risk present in business activities and logistics in areas in which infections are spreading.

Also, in response to the situation in Ukraine, we are working to minimize the impact on business by ascertaining the risk of procurement from Russia and securing alternative procurement sources accordingly.

Toshiba aims to establish transparent relationships with medical institutions and other organizations, to ensure high ethical standards, and to contribute to the development of life sciences. Based on the principles set forth in the “Transparency Guidelines for the Medical Device Industry and Its Relationships with Medical Institutions and Other Organizations” published by the Japan Federation of Medical Devices Associations (JFMDA), we formulated the Guidelines for Transparency in Relationships with Medical Institutions and Other Organizations and began implementing them in FY2021.

Toshiba Group conducts R&D using public research funds allocated by government ministries and agencies, and by incorporated administrative agencies under the jurisdiction of government ministries and agencies. In order to ensure proper operation and management of such activities, we have established regulations and system for executing said activities along with a point of contact for consultations, whistleblowing, etc.
In addition, we provide those involved in these R&D activities with regular training on compliance and on engineering ethics and research ethics to prevent Specific Research Misconduct, among other wrongdoings.