Basic Approach to Corporate Governance
With the mission of “Changing Energy for a Better World,” the Group provides a platform for Digital Transformation (DX) – one of the “4 Ds of Energy” that form the axis of the energy revolution.
In order to realize our mission, all directors and employees will comply with laws and regulations and the Articles of Incorporation, perform their duties, and conduct business activities based on the Group’s “Charter of Corporate Behavior,” thereby streamlining operations, increasing transparency, and maximizing sustainable growth and corporate value.
Outline of the Corporate Governance System
A schematic diagram of our corporate governance system is shown below.
Details of the Company’s Organization
The Company has established the General Meeting of Shareholders, Board of Directors, and Board of Corporate Auditors as corporate bodies under the Companies Act.
The Board of Directors makes decisions on important management matters and supervises the execution of business duties by Directors. We have established the Board of Corporate Auditors because we believe that a system in which corporate auditors monitor the execution of duties by directors independently is an effective way to strengthen corporate governance. In addition, we have introduced an executive officer system to strengthen the decision-making and oversight functions of the Board of Directors and to separate and streamline business execution.
1. Board of Directors
The Board of Directors consists of five directors (including two outside directors who are scheduled to be appointed as independent directors and one other outside director). The board meets once a month in principle and on an ad hoc basis as necessary. In addition to making decisions regarding basic management policies and important business operations, the Board of Directors supervises and reports on the execution of business by the Directors. Beyond this, three corporate auditors attend the Board of Directors meetings to check on the execution of duties by the Directors.
Click here for more information on independence criteria for outside directors.
2. Board of Corporate Auditors
The Company uses the Board of Corporate Auditors system. The Board of Corporate Auditors consists of one full-time and two part-time corporate auditors, all of whom are outside corporate auditors. In principle, the Board of Corporate Auditors meets once a month, with additional meetings as needed. The full-time corporate auditors monitor the Directors’ execution of their duties by attending important internal meetings such as those of the Management Executive Committee, and carrying out auditing procedures such as inspecting important documents. In addition, they strive to improve the auditing function by collecting information through the exchange of opinions with representative executive officers, independent auditors, and internal audit staff.
3. Executive Committee
The Management Executive Committee is attended by directors (excluding outside directors), executive officers, and full-time corporate auditors, meeting once a week to check on business progress, discuss issues, and make practical decisions in a flexible manner.
4. Compliance and Risk Management Committee
To recognize the risks surrounding the Group and respond to them appropriately, the Company has established the Compliance and Risk Management Committee, which consists of Directors, Corporate Auditors, and General Manager of the Internal Audit Office. In principle, the Committee meets once a quarter to share information necessary for risk management of the Company and its subsidiaries and promote compliance-related initiatives. In the event of a compliance violation, the Committee responds swiftly, investigates the facts of the case, and proposes measures to prevent a recurrence.
5. Nomination and Remuneration Committee
The Company has established a voluntary Nomination and Remuneration Committee as an advisory body to the Board of Directors for the purpose of strengthening the independence, objectivity and accountability of the Board of Directors’ functions, further enhancing the Group’s corporate governance system by ensuring the transparency and objectivity of the evaluation and decision-making processes related to the nomination and remuneration of the Board of Directors. The Nomination and Remuneration Committee reports to the Board of Directors on matters such as the remuneration of the Board of Directors, individual nominations of Directors, and drafts concerning the composition, level, and maximum total amount of remuneration for Directors. For the fiscal year ended December 31, 2021, the committee consisted of Independent Outside Directors Minoru Takeda, Aki Mori, and Representative Director Yohei Kiguchi. Chair of the committee is Minoru Takeda.
6. Financial Auditor
The Company has entered into an audit agreement with KPMG AZSA LLC, which conducts audits in a timely and appropriate manner. There is no special interest between the Company and KPMG AZSA LLC or its engagement partners engaged in the audit of the Company.
7. Internal Audit Office
The Company has established the Internal Audit Office as a department under the direct control of Representative Directors to ensure the efficiency, legality, and soundness of the management of the entire Group. However, as the Company is a small organization, it has no dedicated employee assigned to the Office. To avoid self-auditing, multiple persons concurrently serve as internal audit staff and conduct audits based on the audit plan. The Internal Audit Office conducts internal audits of all divisions and subsidiaries of the Group. The Office reports the results of audits to Representative Director and CEO and Representative Director and COO as well as the audited departments after each audit, and also reports the status of audits to Corporate Auditors.