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Tokyo Gas Group CSR Report 2016

Governance Report
Management Structure

Directors and Board of Directors

In 2002, we reduced the number of directors to raise the speed and effectiveness of management decision making. In addition, we have adopted an executive officer system and invited outside directors to serve on the Board of Directors in order to improve transparency and to reinforce the monitoring of business operations. As of June 2016, the Board of Directors has 11 members, including 3 outside directors. Their respective terms of office are set at one year.

Officer Remuneration System

In April 2005, we formulated a basic policy on officer remuneration not only to clarify our officers' management responsibilities for the Company's performance but also to ensure objectivity and transparency regarding officer remuneration (the policy was revised in February 2012, with revisions made to some expressions). Based on this policy, we reexamined the officer remuneration system, centering on the abolishment of allowances for retirement benefits for officers and the introduction of a performance-linked remuneration system. In order to reflect shareholders' perspectives in management, all directors excluding outside directors are mandated to buy our company's stock every month and possess said stock during the term of their service in accordance with the Guidelines for Stock Purchases.

Executive Officer System

By adopting an executive officer system, we have delegated substantial authority pertaining to business operations in individual business departments to corresponding executive officers and established a system where officers can perform their duties responsibly. The executive officers execute the business operations of a Unit, which is composed of a Strategic Division, as well as subsidiaries and affiliates to maximize the Group's value under the policies determined by the Board of Directors. To ensure clear accountability, executive officers are appointed for terms of one year.

Advisory Committee

We have established an Advisory Committee made up of the representatives of outside directors and outside audit & supervisory board members, the Chairman, and the President. In response to inquiries from the Board of Directors, the committee deliberates on issues such as the appointment of officer candidates and officer remuneration, thus ensuring transparency and objectivity in management.

Corporate Executive Meeting

We have the Corporate Executive Meeting in place to deliberate on measures pertaining to corporate management issues. It is composed of 13 members, including the President, Executive Vice Presidents and Senior Executive Officers (excluding those on loan). In addition, two full-time audit & supervisory board members also attend the committee.

In-house Committees

For our business operations, Tokyo Gas has adopted a Unit system composed of the divisions of the Company, subsidiaries and affiliates as a basic structure in line with the LNG Value Chain in order to place further emphasis on efficiency, professionalism and promptness. However, when it comes to important management issues regarding the overall policies of the Company, we need to investigate, review and make arrangements beyond the scope of units. Therefore, in order to enhance the consistency, effectiveness, and cohesiveness of our policies, we have established cross-divisional in-house committees (currently totaling 12 bodies). In these committees, executive officers assume the role of chairperson. However, in three particularly important committees comprising ethics, safety and customer satisfaction, the President assumes the role of chairperson. The matters reviewed at each committee are reported to the Corporate Executive Meeting as necessary.


Corporate Governance

Basic Policy on Corporate Governance

Independence Standards for Outside Officers

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