Working Toward the Mobility Society of the Future

Message from the President The Source of Our Value Creation: What Makes Us Toyota Value Creation Story: Working toward the Mobility Society of the Future Business Foundations for Value Creation Corporate Data Message from the CSO > Roundtable Discussion with the Outside Directors > Dialogue with Institutional Investors on Corporate Governance > Corporate Governance Message from the CFO > Capital Strategy >The Environment > Vehicle Safety > Quality and Information Security > Intellectual Property and Privacy >Value Chain Collaboration >Human Rights Diversity and Inclusion >Human Resource Development >Health and Safety and Social Contribution Activities Risk Management and Compliance Quality and Information Security Quality Fundamental Approach The origins of Toyota's "Customer First" and "Quality First" principles lie in the Five Main Principles of Toyoda, which embody the thinking of Sakichi Toyoda, and the spirit of audit and improvement espoused by Kiichiro Toyoda. Since its foundation, Toyota has built a corporate culture that focuses particular attention on quality that will produce customer smiles and on Kaizen (continu- ous improvement) achieved through Genchi Genbutsu (onsite, hands-on experience). Each employee in every area maintains a constant and strong awareness of issues and a sense of own- ership, making ongoing efforts to implement Kaizen and collaborate closely with personnel in other fields in order to enhance customer safety, peace of mind, and satisfaction. Toyota sees quality as the combination of prod- uct quality, sales and service quality, and, as the foundation supporting these, the quality of the work performed by each employee. Quality Assurance Cycle Sales and after-sales service • Collection of quality information in the market ⚫Dealer education and instruction Service parts warranty, etc. Logistics • Establishment of and instruction on transportation standards Quality deterioration prevention, etc. Inspection •Inspection planning and implementation • Checking and maintenance of inspection tools, equipment, etc. We believe that products and services that gain the confidence of customers can be created only when all employees across every process-from development, purchasing, production, and sales to after-sales service-build quality into their work, coordinate with one another across processes, and implement the quality assurance cycle. Fostering Awareness and Corporate Culture To foster a corporate culture in which each member is committed to building in high quality, Toyota works to develop human resources and improve work quality by holding quality awareness promotion events for all employees every year and by providing qualification-specific education in quality assurance. Furthermore, February 24, the anniversary of the day that President Akio Toyoda attended the U.S. Congressional hearings held to investigate the series of recall issues that occurred in 2010, has been des- ignated "Toyota Restart Day." We have created mechanisms and are taking measures to raise awareness in order to keep the lessons learned from the series of recall issues fresh. Audit and improvement Quality assurance Purchasing Verification of supplier capability Conclusion of business con- tracts, etc. Production Manufacturing quality assurance Process maintenance and con- trol, etc. Product planning Product plan formulation. • Development target setting ⚫Quality target setting, etc. Development •Product basic plan formulation ⚫ Design quality assurance • Prototype evaluation, etc. Production preparations Process and equipment planning • Process capability allocation Inspection method establish- ment and measurement of initial products, etc. In 2014, Toyota established its Customer Quality Learning Center as a crucial education facility for conveying the experiences and lessons learned from the series of recall issues to future generations of employees. Recent quality issues are added to update the Center's program every year to maintain focus on lessons we have learned. We have also set up customer quality learning centers unique to indi- vidual plants and global sites as part of efforts to ensure employees in each region and at each plant thoroughly understand the importance of quality. Information Security Fundamental Approach Cyber attacks are growing more sophisticated and complex. Their corporate targets include confiden- tial information, information systems, plant and vehicle control system networks, such as those for onboard devices, as well as supply chains. Toyota strives to protect information assets against the threat and risks of cyber attacks and ensure cus- tomer safety and peace of mind. We implement measures to prevent information leakage based on the Information Security Policy. Information Security Policy ▸ Information Security Initiatives To prevent leaks of confidential information and protect product information assets from cyber attacks, Toyota implements inspections and audits based on the All Toyota Security Guidelines (ATSG). ATSG ensures information security through a multi-faceted approach encompassing organiza- tional management, human resource management, technical security, physical security, and incident/ accident response. To adapt to recent environmen- tal changes, ATSG is revised periodically. By annually inspecting the information security initiatives being implemented at consolidated subsidiaries and other Group companies in line with ATSG, Toyota works to ensure the continu- ous maintenance and improvement of their infor- mation security. A specialized team continuously carries out on-site audits of each company to check responses to ATSG and the status of implementation of physical security measures at each company. Furthermore, in terms of automobile-related ini- tiatives, Toyota is a member of the Automotive Information Sharing & Analysis Center (Auto-ISAC) in Japan and the United States, a framework for sharing knowledge related to information security, and actively utilizes it to learn promptly about cases that occur within the industry and put them to use in development. Defending against Information Leaks and External Attacks To defend against information leaks and external attacks, a specialized team performs information gathering and monitoring functions. When prob- lems arise, a response team, including members of management, is formed to resolve the situation appropriately and promptly. The specialized team conducts training at least once a year based on assumptions of increasingly complex and sophisticated threats and prepares procedure scenarios for rapid recovery to ensure readiness in case of a large-scale issue. In addition, we receive third-party evaluations based on NIST SP800-82/53, ISO 27001/27002, IEC 62443 and other standards regarding the sta- tus of security measures pertaining to management and technical aspects of security systems. We implement measures to address problems identi- fied through these evaluations as needed, working to raise the level of security. TOYOTA MOTOR CORPORATION 45 INTEGRATED REPORT