Our Approach to Corporate Governance

TOYO Corporation upholds the following three principles as its corporate philosophy:

To achieve this, we are committed to maintaining and strengthening our corporate governance framework, with the fundamental policy of enhancing management transparency and soundness while improving management efficiency.

Corporate Governance Framework

TOYO Corporation operates under an Audit & Supervisory Board structure. To strengthen management transparency, integrity, and effectiveness, a governance framework has been established that places risk management and compliance at its core and ensures appropriate checks and balances across the organization. This framework is supported by oversight and audit functions performed by Directors and Audit & Supervisory Board Members, as well as the effective operation of relevant committees.

Board of Directors

The Board of Directors determines key management matters and oversees the Executive Officers’ duties. In principle, the Board meets twice a month to resolve material management agendas, receive reports, and make decisions on significant matters, including the nomination and compensation of Directors.
In addition, the Management Committee meets, in principle, during the week preceding each Board meeting, where members exchange views on material issues and determine overall directions. At the Management Committee, opinions from department heads and other relevant personnel are sought and considered as appropriate. Independent Outside Directors provide oversight and express their views from an independent and neutral standpoint.

Audit & Supervisory Board

The Audit & Supervisory Board is composed of four independent outside members, one of whom serves on a full-time basis. These members attend meetings of the Board of Directors to provide professional insights and report on relevant matters as necessary.
To ensure effective audit oversight, the Board, led by the full-time member, requests information and documentation from the relevant departments as needed. The Audit & Supervisory Board also works in close coordination with the Internal Audit Department, conducts investigations, receives reports from Directors, employees, and the Accounting Auditor, and participates in key internal meetings.
Through these activities, the Audit & Supervisory Board maintains a robust and effective audit function.

Nomination and Compensation Committee

The Nomination and Compensation Committee is composed of Independent Outside Directors, the Representative Director, and Directors. Established as an advisory body to the Board of Directors, the Committee enhances the fairness, transparency, and objectivity of the processes related to the nomination, dismissal, and compensation of Directors, thereby strengthening the Company’s corporate governance framework.
The Committee meets according to the annual schedule and holds additional meetings as necessary. At the request of the Board of Directors, the Committee conducts thorough deliberations on matters such as proposals for Director appointments, compensation recommendations, and revisions to rules concerning Directors. Subsequently, the Committee reports its findings and recommendations to the Board of Directors.

Evaluation of the effectiveness of the Board of Directors

TOYO Corporation regularly assesses the composition and operations of the Board of Directors through questionnaire surveys. The results of these surveys are shared with the Board and analyzed to facilitate discussions aimed at further enhancing the Board's effectiveness.

In 2025, the evaluation concluded that the Board is effective. Based on the identified improvement proposals, we will continue to enhance the Board's effectiveness.

Executive Compensation

To support medium- to long-term corporate growth and enhance sustainable corporate and shareholder value, TOYO Corporation has established the following basic policies to ensure that the compensation system remains rational, objective, and transparent:

Compensation Scheme

For Directors involved in business execution, compensation consists of a fixed base salary, performance-linked compensation, and medium- to long-term equity compensation, including restricted stock and performance share units. Outside Directors receive a fixed base salary and restricted stock grants.

The performance share units plan was introduced in October 2025 for Directors (excluding Outside Directors) to promote the creation of sustainable corporate value. In addition to aligning the interests of Directors with those of shareholders, the program reinforces their commitment to sustainability management by directly linking a portion of their compensation to ESG (Environmental, Social, and Governance) indicators. The compensation ratio for eligible Directors is designed to be approximately 10% of variable compensation.

For the initial evaluation period for the scheme, covering the two fiscal years from October 1, 2025, to September 30, 2027, the ESG performance indicators are as follows:

Further details on the performance share unit plan are available in the
disclosure document .

Audit Status and Coordination among Audit Functions

Audit by Audit & Supervisory Board Members

Audit & Supervisory Board Members conduct audit activities in accordance with the annual audit plan, including interviews with Directors, Executive Officers, and other senior personnel, as well as visits and on-site audits at domestic and overseas locations. In addition, a full-time Audit & Supervisory Board Member attends the Management Committee as an observer, which serves as an advisory body to the President & CEO for deliberating management issues. Through this participation, the Audit & Supervisory Board Member gathers management information and shares it with the Audit & Supervisory Board.
Audit & Supervisory Board Members hold regular meetings with the Accounting Auditor and the Internal Audit Department to share information and exchange opinions, thereby enhancing audit effectiveness.

Accounting Audit

TOYO Corporation has engaged Deloitte Touche Tohmatsu LLC to conduct audits in accordance with the Companies Act and the Financial Instruments and Exchange Act. Audit & Supervisory Board Members and the Accounting Auditor hold regular meetings to exchange information on audit policies, structures, plans, and issues that arise during the fiscal year. In addition, all Audit & Supervisory Board Members attend audit report meetings held by the Accounting Auditor each fiscal year, during which they exchange opinions on specific financial results.

Internal Audit

TOYO Corporation has established an Internal Audit Department as its dedicated internal audit function. Based on the internal audit plan, the department conducts internal audits from a risk management perspective, reports the results to the Representative Director and the Directors in charge, and provides recommendations for improvement as needed to strengthen internal controls.
The Internal Audit Department holds meetings with Audit & Supervisory Board Members and the Accounting Auditor as appropriate to exchange information and opinions. Through close coordination among the respective audit functions, the department works to enhance the quality and effectiveness of the Company’s internal audit activities.