The Company pledges to constantly strive for sustainable growth and to enhance the corporate values of the Chiyoda Group on a mid- to long-term basis. To achieve this goal, the Group established "Chiyoda Corporation Corporate Governance Policy" in October, 2015, which developed the Group's basic views and guidelines with regard to corporate governance. The Group will continue to actively secure soundness and transparency of its corporate management through the Policy.
Corporate Governance System
In order to further reinforce its corporate governance structure, the Company has shifted to a “Company with Audit and Supervisory Committee.” (see below)
The Company has established the Legal & Compliance Department, the SQEI (Safety, Quality, Environment, and Information Security) Risk Management Department, the Crisis Management Department, and the Internal Audit Department. To reinforce internal controls, the Company has established the Internal Control Committee and the Compliance Committee.
To ensure speedy and accurate decision-making to deal with rapidly changing social and economic environments, the Company has adopted the executive officer system.
- Note: Characteristics of a Company with Audit and Supervisory Committee are as follows:
- The Company with Audit and Supervisory Committee does not have Audit and Supervisory Board Members or an Audit & Supervisory board. Instead, an Audit and Supervisory Committee is established that is comprised of three or more Directors, a majority of which are Outside Directors.
- A Director, Audit and Supervisory Committee holds voting rights in the Board of Directors as a Director and is involved in the determination of proposals for the appointment and dismissal of Directors who are not Audit and Supervisory Committee members, the selection and removal of Representative Directors, and other general decision-making on business execution.
- In the Company with Audit and Supervisory Committee, the decisions on the execution of important operations may be substantially delegated to Directors. After the shift to the Company with Audit and Supervisory Committee is completed, we will have enabled speedy decision-making and flexible operations by executive officers. In addition, the oversight of operations will become the major role of the Board of Directors.
By shifting to the Company with Audit and Supervisory Committee, with the new functions, responsibilities and authorities that are described above, the Company will be able to improve and implement the soundness and transparency of management and prompt decision-making, and further enhance its corporate value.
The Board of Directors and Meetings of the Board of Directors
The Board of Directors consists of fourteen directors, including Audit and Supervisory Committee members, and holds monthly meetings. It makes important management decisions and oversees the Company’s operations. The outside directors allow for appropriate decision making and rational management supervision by the board, from objective and neutral perspectives. Agendas for the Board of Directors’ meetings include management plans, important organization personnel matters, and large investments and loans.
The Company has adopted the executive officer system to increase operational efficiency and improve reporting to the Board of Directors through the business reports provided at the monthly executive officer meetings. The members of the Board of Directors attends these meetings.
Audit and Supervisory Committee
The Company has the Audit and Supervisory Committee, which is organized by five members, including two full-time members. The Committee monitors the overall performance of duties by directors. Three of the members are independent officers and two of the members have considerable expertise in financial accounting. To enhance auditing activities of the Audit and Supervisory Committee, employees who specialize in supporting the Audit and Supervisory Committee to execute their duties are placed.
Corporate Governance Report
Reinforcing Internal Controls
The Chiyoda Group constantly conducts self-assessments of existing internal control functions and reinforces internal control systems. In addition, the Company has established the Internal Audit Department as an autonomous unit to perform evaluations. Chiyoda has a system in place for auditing the development and operation of a suitable overall internal control framework and constituent components, and for submitting reports to the Executive Committee.
In addition, to enhance internal controls, the Company has established the Internal Control Committee, which coordinates and summarizes the opinions voiced within the Company. The Internal Control Committee proposes improvements on internal controls to the Executive Committee, whenever it considers necessary.