Corporate Governance Systems
Corporate governance basic policies
As an "Energy Frontier Corporate Group" focusing on natural gas, Tokyo Gas Group shall actively contribute to create a pleasant lifestyle and environmentally friendly society and works to ensure continued development while consistently earning the trust of customers, shareholders, and society. Based on this philosophy, we aim to achieve a continuous increase in our corporate value through enhancing corporate governance systems. We are endeavoring to develop systems with a commitment to management legality, soundness, and transparency. Tokyo Gas continues to emphasize the importance of accurate and prompt decision making, efficient business operations, strengthening of auditing and monitoring functions, and clarification of management and executive responsibilities.
Overview of corporate governance systems
In 2002, we reduced the number of directors to raise the speed and effectiveness of management decision making. In addition, we have invited outside directors to serve on the Board of Directors in order to improve transparency and to reinforce the supervision of business operations. The Board of Directors has 11 members, including 3 outside directors. Furthermore, we have established the Advisory Committee, which is made up of 3 representatives from the outside directors and outside audit & supervisory board members and 2 inside directors. In accordance with inquiries from the Board of Directors, the Advisory Committee selects officer candidates in a fair and appropriate manner and deliberates on officer remuneration in accordance with the Company's basic policy for officer remuneration. In the past, the Company had invited 2 outside audit & supervisory board members, and in 2006 the number of outside audit & supervisory board members was increased by one. The 5 audit & supervisory board members, which now include 3 outside audit & supervisory board members, conduct strict audits. The Corporate Executive Meeting, which meets weekly as a general rule, deliberates on matters requiring Board of Directors discussion and resolutions and important management-related issues, thus realizing accurate, rapid decision making and efficient business operations. The Company has introduced an executive officer system for business operations in accordance with decisions of the Board of Directors. Substantial authority has been delegated to executive officers in their designated areas of responsibility, while directors, as appropriate, receive reports on the status of operations from executive officers and monitor the executive officers. In addition, executive officers report to the Board of Directors as needed. (To clarify management responsibility and executive responsibility, the terms of office of directors and executive officers have been fixed at one year.) In fiscal 2002, the Company established the Management Ethics Committee, chaired by the President. We also formed in-house committees to address issues that are important from a management perspective, such as compliance, risk management, customer satisfaction, and safety to promote transparent management and create a flexible and open corporate culture. This structure facilitates the sharing of information within the Group, as well as deliberations, and adjustments, regarding the Group's overall direction.
Thus, Tokyo Gas takes a proactive stance in employing outside directors and outside audit & supervisory board members and has created a system featuring multiple auditing and monitoring layers in its aim to achieve highly objective and transparent governance.
Compliance with Japan's Corporate Governance Code
Tokyo Gas has formulated a "Basic Policy on Corporate Governance" in keeping with Japan's Corporate Governance Code for listed companies. We are committed to working in cooperation with stakeholders, practicing proper disclosure and transparency, and ensuring that the Board of Directors and other management bodies fulfill their obligations in order to achieve sustainable growth and raise corporate value in the mid- to long-term, and we will pursue full compliance based on dialogue and understanding with our shareholders and other stakeholders.
- *1Board of Directors: 11 directors (3 outside directors and 8 internal directors), and 5 audit & supervisory board members (3 outside auditors and 2 internal auditors)
- *2Advisory Committee: 3 representatives from outside directors and outside audit & supervisory board members, Chairman (1), and President (1)
- *3Audit & Supervisory Board: 5 audit & supervisory board members (3 outside auditors and 2 internal auditors)
- *4Corporate Executive Meeting: President, 2 Executive Vice Presidents, and 10 Senior Executive Officers (3 of the representative directors also serve as President and Executive Vice Presidents)