Corporate GovernanceCorporate Governance Structure
JSW recognizes that it must earn the trust of shareholders, customers, employees, and other stakeholders to aim toenhance enterprise value and thereby contribute to the economy and society as a whole.
We therefore created a corporate governance setup that encompasses a management organization andframework to implement essential measures and pursues fair disclosure to ensure business transparency.

Overview of Corporate Governance Structure

executive officers. The Strategy Council also discusses,
reports on, and monitors overall operational matters.

We employ a statutory auditor system comprising seven

Our Management Council also convenes once

direc tor s, one of whom is independent, and fourmonthly, in principle. Members include directors,statutory auditors (hereafter, “corporate auditors”), two

corporate auditors, divisional heads, plant generalof whom are external.

managers, headquarters managers, and others with

The term of of fice of directors is one year. We

executive responsibilities. This body’s tasks include

maintain a corporate of ficer system and separate

assessing the business environment and monitoring thedecision-making and oversight from the executive

progress of the Company’s business plan. Its goals are tofunctions of corporate officers. The goal is to accelerateshare such knowledge throughout management anddecision-making and enhance oversight and execution.

reflect it in their decisions as well as to ensure risk

In principle, the Board of Directors convenes once

management and compliance.

monthly to decide and report on important management

The Board of Corporate Auditors comprises four

issues, including basic operational policies and legally

corporate auditors, two of whom are external (one servesstipulated matters. Senior executive officers and above

full time). These auditors attend meetings of the Board ofattend these meetings, positioning the Board as a vehicle

Directors, the Executive Board, the Management Council,

for mutual oversight of directors and corporate officers.

and other important gatherings. In principle, they visit

The Strateg y Council—consisting of t wo

the Company’s plants and offices and major subsidiaries

representative direc tors and other direc tors withonce every six months. The auditors receive divisional

executive responsibilities nominated by the president, an

repor t s as necessar y and exchange opinions withoutside director, and a corporate auditor (chosen bydirectors and key employees. Based on these efforts, therotation)—meets once a week to deliberate and decide

auditors express their views to management from anon impor tant management matters and impor tantobjective and neutral perspective, and exercise strictbusiness execution decisions made by directors andoversight with regard to the execution of directors’
duties.

16Corporate GovernanceInternal Control and Risk ManagementSystemsDirectors, the Executive Board, the Management Council,and corporate auditors.
We created internal and external channels for

An effective internal control system is vital for business

reporting and discussing compliance violations, andperformance. We are therefore improving internal controls

guarantee anonymity and protection from reprisals.

in line with our Basic Policy on Internal Control Systems,

The Corporate Code of Conduct opposes criminal

which the Board of Directors adopted, and our Regulations

behavior. We maintain an office to share relevant

Regarding the Promotion of Internal Control Activities. We

information and manage countermeasures to help

will address social changes and streamline our setup ofeliminate cr iminal element s .

internal controls by reviewing our issues and responses.
The points below delineate management’s basic

3. Safeguarding information

stance on internal controls.
The Company appoints a director or corporate officer to

1. Implementation structure

oversee information safeguards. In keeping with document
and information management rules and regulations, theThe Internal Control Committee sets up a specialist unit,

Company stores and manages important information

which meets as necessary, to supervise internal controls

relating to the work of directors and corporate officers

with the aim of streamlining our internal control system.

as printed or digital records. This information includes
the minutes of important meetings, written requests for

2. Adhering to laws and regulations

management approvals, and other important information.

and the Articles of Incorporation

Further, directors and corporate auditors may view or copy
this information as needed.

At JSW, compliance extends beyond preventing fraud
and adhering to laws and regulations and in-house rules

The Company properly discloses financial andimportant management information.

to encompass diverse rules for fulfilling broad social
responsibilities. Our efforts center on directors and4. Risk management

corporate officers taking the lead in practicing integrity
and in raising employee awareness of compliance issues

Directors, corporate officers, and employees concurrently

through education and training.

serving as general managers identify and evaluate risks

We established the Internal Audit Division to ensurearising in the course of business. They address these risks

that operations observe all laws and regulations andin keeping with regulations and the management approvalin-house rules. The division conducts scheduled and spotsystem. The Board of Directors and the Executive Boardaudits. It submits reports on the results to the president

deliberate on key risks.

and relevant parties. They may include the Board ofWe m a i n t a i n r i s k m a n a g e m e n t r u l e s a n d a17Company wide risk management system. Divisions
overseeing risks in such areas as safety and hygiene,

6. Ensuring appropriate conduct
at Group companies

environmental management, information securit y,and export controls set up committees and create andG ro up sub sidiar ie s wo r k to e s t ab lis h an d b uildadminister rules for containing such risks throughout

Companywide internal control systems according tothe Company. A risk management director or corporate

JSW’s Vision, Corporate Philosophy, and Corporate Codeofficer monitors progress in collaboration with the Internalof Conduct. Group companies also strive for efficient

Audit Division and reports to the Board of Directors or thebusiness execution and autonomous management byExecutive Board.

ensuring proper division of duties and clarification ofRisk managers at all divisional headquarters, businessdecision-making authority based on their own in-houseunit s, and plant s evaluate measures and identif yregulations. The Company supports these efforts of Groupdaily risks. A crisis management headquarters tackles

companies.

emergency situations.

We drafted operational and management rules forsubsidiaries and defined the related management

5. Ensuring efficiency

responsibilities and leadership structures. We maintain asystem for reporting, notifying, and gathering data about

We ensure rapid decision-making and flexible andsubsidiary decisions on important matters. At the same

efficient management by having the president act astime, we ensure that listed subsidiaries retain a degree ofchief executive officer, with directors overseeing key

management autonomy.

headquarters divisions and business units. The Board

We dispatch officers and employees as directors andof Directors appoints and supervises corporate officers.

corporate auditors of Group subsidiaries. We ensure that

Directors and corporate officers discuss, decide, andsubsidiaries comply with all laws and regulations andreport on important matters in meetings of the Board ofin-house rules by mandating scheduled and spot internal

Directors and the Executive Board.

audits through relevant departments or the Internal Audit

The Board of Directors formulates the medium-term
management plan and annual busine s s plans as

subsidiaries on internal control improvements.

Companywide objectives for directors, corporate officers,

The Company supp or t s t he effor t s of Groupand employees. Directors and corporate officers produce

companies to establish systems to identify and evaluate

and implement specific policies for reaching goals,

r isk s according to division of dutie s deter mine dsegregating tasks in line with in-house regulations. They

independently based on rules concerning risk

also review progress and submit periodic and spot reports

management.

to the Board of Directors, the Executive Board, and theManagement Council.

18Division. We also audit operations directly and instructCorporate Governance

7. Appointing corporate auditor assistants

9. Ensuring corporate auditor effectivenessand ensuring their independence
We encourage directors, corporate officers, and employees
On request from corporate auditors, we offer employees asto value corporate auditors and to accord them their fullest

assistants. We seek the opinions and consent of thesecooperation. These auditors can seek assistance from theauditors for appointments, dismissals, evaluations, andInternal Audit Division, other headquarters divisions, andother personnel treatment regarding these assistants toall other divisions for auditing tasks.

secure their independence from directors and corporate
officers.
The Company ensures that employees assigned asassistants can perform their duties according to theWe enable corporate auditors to collaborate closelywith the accounting auditor and the Internal Audit Division.
Corporate auditors have the discretion to employ theservices of legal advisors and other outside experts.

directions and instructions of corporate auditors.

10. Ensuring reliable financial reporting
8. System for directors and employees tosubmit reports to corporate auditors

We evaluate the effectiveness of internal controls forfinancial reports in keeping with basic policies. The Board

As is their right, corporate auditors attend meetings of theof Directors and the Executive Board discuss the findings.

Board of Directors, the Executive Board, the ManagementCouncil, and other managerial meetings that discuss,
determine, and report on important matters.

Policy Regarding Large-Scale Purchaseof Company Shares

Based on its management approval system, theCompany presents approval records to corporate auditors.

On May 7, 2014, the Board of Directors resolved to amend

Corporate auditors can at any time request reports from

Measures against Large-Scale Share Acquisitions (takeover

direc tor s and employees of the Company and it s

defense measures), a set of rules and procedures forsubsidiaries. Also, persons who have received reports fromparties seeking to purchase our shares (namely, holders of

direc tor s and employees of the Company and it sCompany-issued shares seeking to increase their stakes tosubsidiaries can convey such reports to corporate auditors.

more than 20% through purchases, or those making a

The Company guarantees that persons making

tender offer to boost their combined shareholding ratio

repor t s to cor por ate auditor s are not subje c t towith the inclusion of the holdings of special parties to more

unfavorable treatment based on the content of suchthan 20% through a tender offer). The amendment wasreports.

approved at the 88th Regular General Meeting ofShareholders on June 25, 2014.

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