Corporate governanceTOKYO GAS INTEGRATED REPORT 2020

41

CORPORATE GOVERNANCE
Basic Policy on Corporate Governancewww.tokyo-gas.co.jp/IR/english/gvnnc/pdf/policy.pdf

Tokyo Gas 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 increasein 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 ofmanagement and executive responsibilities.

Board of Directors
In principle, the Board of Directors meets once a month todiscuss and decide important matters regarding business
operations. Directors must submit reports to the Board of
Directors regarding the status of execution of their duties
periodically and when deemed necessary, allowing the Board
to monitor the performance of directors.
The Board of Directors comprises 9 directors, 4 of whom areoutside directors. In addition, the term of directors is set at one
year with the goal of further clarifying managerial responsibility.
Outside Directors
In accordance with their individual experience and knowledge,
the outside directors strive to secure the soundness andappropriateness of deliberations and decisions regarding businessexecution. From an independent viewpoint, the outside directors
monitor the performance of duties by the directors and exercise
their authority at meetings of the Board of Directors. In this way,
the outside directors contribute to the improvement of therationality and objectivity of the company’s business execution
and of the deliberations and decisions of the Board of Directors.
In making judgments about matters related to the
independence of outside officers, such as capital, transactions,and relationships, we comprehensively verify that they are
unlikely to have conflicts of interest with general shareholders

and they are in a position that enables them to be objective
and neutral, and on that basis we make a judgment on their
independence. (The company discloses the IndependenceStandards for Outside Directors on its website: www.tokyogas.co.jp/IR/english/gvnnc/pdf/independence.pdf) The
Advisory Committee has confirmed that none of the outside
officers has a material conflict of interest with the company—inregard to capital, transactions, or relationships—and has
confirmed their independence in accordance with the above
standards. On the basis of this report, the Board of Directors
has designated them to be independent officers andreported that designation to the stock exchanges on which
the company is listed.
Realizing Accurate and Rapid Decision Making,and Efficient Business Execution
The Corporate Executive Committee, which meets weekly as a
general rule, deliberates on provisions to be resolutions at Boad of
Director’s meetings and important management-related issues.
The company has introduced an executive officer systemfor business execution in accordance with the decisions of
the Board of Directors. Substantial authority has beendelegated to executive officers in their designated areas of
responsibility to ensure efficient business execution.

Meanwhile, they are required to report the state of theirduties to the Board of Directors as necessary to ensure that
their execution of business is appropriately monitored.
Analysis and Evaluation of Effectiveness of theBoard of Directors
To maintain and enhance its effectiveness, the Board of
Directors analyzes and evaluates itself through an annual
questionnaire-based self-evaluation and through discussions
and the exchange of opinions at Board of Directors’ meetings.
Based on the results of the questionnaire and theexchange of opinions at the Board of Directors’ meetings,
efforts to improve the effectiveness of the Board of
Directors are put into practice, including the enhancementof site inspection visits to develop the understanding ofindividual businesses, the increase of executive officers’
attendance at Board of Directors’ meetings and theinspection of deliberations at the Corporate Executive
Committee meetings.
Continuing effort is necessary to further increase theBoard’s effectiveness. The company will continuously
evaluate the effectiveness of the Board of Directors in a bid
to improve its monitoring functions.

Corporate governanceTOKYO GAS INTEGRATED REPORT 2020

Improving Corporate Composition of theBoard of Directors
Governance

FY200242

FY2020

Directors
Inside 9

Audit &
Supervisory
Board Members

Inside 3

Outside 2

Outside 2

Inside 5

Outside 4

Inside 2 Outside 3

FemalememberFemalemembers2

1

Audit & Supervisory Board
The Audit & Supervisory Board holds a meeting each monthin principle and whenever necessary. Five Audit & Supervisory
Board members, including three outside members, deliberateand determine audit policies and other matters and receive
reports on the state of the implementation of audits fromone another. They appoint at least one member with adequate
knowledge on financial and accounting affairs to further
improve the effectiveness of the audits they carry out.
In line with the Corporate Auditors’ Audit Standards
formulated by the Audit & Supervisory Board, its members
attend important meetings such as those of the Board of
Directors and the Corporate Executive Committee, inspect
the status of operations at the head office and other businessoffices, and communicate with the accounting auditor to collectinformation. They request explanations as necessary, express
opinions and audit the Directors’ execution of their duties.

Outside Audit & Supervisory Board Members
With capital, transactions, relationships and other factors
defined as criteria for the independence of outside officers,
the company comprehensively verifies that they are unlikely
to have conflicts of interest with general shareholders andthat they are in a position that enables them to be objective
and neutral. On this basis, it makes a judgment on their
independence. The Advisory Committee has confirmed thatnone of the outside officers have any interest with thecompany in regard to capital, transactions, or relationships
and that they are independent in accordance with the above
standards. On the basis of this report, the Board of Directors
has designated them to be independent officers andreported that designation to the stock exchanges on which
the company is listed.
The outside Audit & Supervisory Board members conduct

audits from an independent viewpoint and contribute to theimprovement of the rationality and objectivity of thecompany’s execution of business and the deliberations of theBoard of Directors through their statements at meetings ofthe Board of Directors. In addition, through their statements
and the exercise of their voting rights at meetings of the
Audit & Supervisory Board, the outside Audit & Supervisory
Board members contribute to assuring and improving
rationality and objectivity of the audits.

Corporate governanceTOKYO GAS INTEGRATED REPORT 2020

43

Corporate Governance System

Tokyo Gas Co., Ltd.

Overview of Corporate Governance System(As of June 26, 2020)

Shareholders Meeting
Appointment

Appointment
ReportReportAudit & Supervisory Board
Five Audit & Supervisory Board Members(including three outside members)

ReportCollaboration

Auditing
corporation

Appointment

Audit

Board of Directors

Advisory Committee
Two outside directors, one outside
Audit & Supervisory Board Member,the Director and Chairman of theBoard, the President

ReportPresident and CEO
Collaboration

ReportCollaboration

Committees to address
important management issues

Corporate Executive Committee(Independent
auditor)President and CEO, two executive vice presidents,
three senior managing executive officers, andseven managing executive officers

Internal
Audit
Department

OverseeInvestment Evaluation Committee

Management ethics, safety, risk
management, CS, sustainability, etc.

Number of outside directors

4

Number of Audit & Supervisory Board members

5

Number of outside Audit & Supervisory Board
members3

Number of independent officers

7

Participation of outside directors / outside Audit& Supervisory Board members in determinationof remuneration

Yes

Participation of outside directors and outside
Audit & Supervisory Board members in selecting
director candidates

Yes
12

Number of meetings of Board of Directors*
Departments

Audit

Financial
audit

Report62.6

Average age of directors

Nine directors (including four
outside directors)

Supervise

9

Number of directors

ReportManageCollaboration

ReportSubsidiaries

Attendance rate of outside directors at meetingsof Board of Directors*

100%

Term of office of directors

1 yearPerformance-linked remuneration

Yes

Share purchase system to reflect the perspectiveof shareholders in management

Yes* Total for the period from June 2019 to May 2020

Working to Promote Transparent Management andCreate a Flexible and Open Corporate Culture
We have established in-house committees—such as the Management Ethics Committee,
chaired by the President and CEO—to address issues that are important from amanagement perspective, such as compliance, safety, customer satisfaction, and risk
management. This structure facilitates the sharing of information within the group, as
well as deliberations and adjustments regarding the group’s overall direction.

Investment Evaluation Committee
Of the matters to be discussed at the Corporate Executive Committee, the Investment
Evaluation Committee chaired by the Executive Officer in charge of financial affairs
evaluates matters that require the evaluation of the significance, economy and risks
related to investment and post-investment follow-up and reports to the Corporate
Executive Committee.

Corporate governanceTOKYO GAS INTEGRATED REPORT 2020

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Officer Remuneration
In 2005, as part of its actions to strengthen corporate
governance, the company formulated the basic policy on
officer remuneration. At the meeting of the Board of
Directors in February 2012, the policy was revised as follows.
1 Role of Officers and Remuneration
The role demanded of officers is to seek to enhance short-,
medium-, and long-term corporate value, and officer
remuneration shall serve as an effective incentive for them toperform that role.
2 Level of Remuneration
The level of officer remuneration shall be suitable for therole, responsibility, and performance of the officer.
3 Composition and Other Details ofRemuneration Paid to Directors(1) Remuneration of directors shall be paid within the scopeof the remuneration limit approved at the General
Shareholders’ Meeting.

(2) Remuneration of inside directors shall comprise monthly
remuneration and bonus. Monthly remuneration shallcomprise fixed remuneration paid in accordance with thepost of each individual and performance-linked
remuneration. A portion of fixed remuneration shall beallocated to the purchase of shares based on a sharepurchase guideline and from the standpoints of reflecting
the perspectives of shareholders on management andimproving shareholder value over the long term. The
amount of performance-linked remuneration shall be
determined after evaluating companywide performanceand performance of operating units from the standpointsof motivating inside directors to execute management
strategies and reflecting their performance clearly in theirremuneration. The amount of bonus to be paid shall be
determined in accordance with the post of each insidedirector after performance evaluation.
(3) Remuneration of outside directors shall comprise monthly
remuneration and bonus. Monthly remuneration shallcomprise only fixed remuneration, while bonus shall be
the same as that of inside directors.

4 Composition and Other Details ofRemuneration Paid to Audit & Supervisory
Board Members(1) Remuneration of Audit & Supervisory Board members
shall be paid within the scope of the remuneration limit
approved at the General Shareholders’ Meeting anddetermined through discussions among Audit &Supervisory Board members.
(2) Remuneration of Audit & Supervisory Board members
shall comprise only fixed monthly remuneration.
5 Assurance of Objectivity and Transparency of
the Remuneration System
The company shall assure the objectivity andtransparency of the system of officer remuneration by
establishing and operating the Advisory Committee
comprising a number of outside directors, outside Audit &Supervisory Board members, and inside directors togovern the system of personnel affairs and remunerationof officers.

Composition of Remuneration for Directors

Fixed
remuneration

Total Remuneration for Directors and Audit & Supervisory Board Members (FY2019)

Performance-linked
remuneration (part of themonthly remuneration and bonuses)

Classification of officers

Total value of
remuneration(¥ million)

Total value of remuneration by type (¥ million)
Fixed remuneration

Performance-linked remuneration

Number of eligible
officers(Monthly remuneration)

Monthly remuneration

Bonuses

331

240

55

34

5

excluding outside
Audit & Supervisory
Board members

74

74

-

-

3

Outside Director

41

35

-

6

6

Outside Audit &Supervisory Board
Members

34

34

-

-

3

* Monthly remuneration of outside directors are fixed remuneration only.

(

Directors
excluding outside
directors)

Audit & Supervisory
Board members()* The number of officers includes two outside directors and one Audit & Supervisory Board member who retired upon the conclusion of the 219th Annual General Meeting of Shareholders.
* It was resolved that the amount of monthly remuneration of all Directors (including Outside Directors) should be under ¥50 million at the 205th Annual General Meeting of Shareholders and that theamount of annual bonus for all Directors should be under ¥90 million at the 206th Annual General Meeting of Shareholders.
* It was resolved that the amount of monthly remuneration of all Audit & Supervisory Board members (including outside members of the Audit & Supervisory Board) should be under ¥12 million at the190th Annual General Meeting of Shareholders.

Corporate governanceTOKYO GAS INTEGRATED REPORT 2020

45

Advisory Committee

Internal Control System

Compliance

In February 2005, we established the Advisory Committee
to assure objectiveness and transparency in management.
The committee has up to five members, consisting of the
Chairman, the President and CEO, and up to three directors
selected by the Board of Directors; with over half of its
membership consisting of outside officers, and thecommittee chairman also being an outside officer.

To secure management soundness and transparency, and torealize its management philosophy, the company has
formulated the “Basic Policy on Development of Corporate
Structures and Systems for Internal Control System,” and isapplying this policy in an appropriate manner.
Specifically, the company has established systems toensure that directors and their assistants perform theirduties in a manner that is compliant to relevant laws andregulations, the articles of incorporation, and other rules. In
addition, crisis management provisions have beenformulated to limit losses from risks related to investments
and natural disasters. The company also defines guidelines
for ensuring the independence of Audit & Supervisory Board
members and guaranteeing the effectiveness of the Audit &Supervisory Board.

Compliance Structure
The company has established the Management Ethics
Committee chaired by the President and CEO. It discusses at theexecutive level overall actions for maintaining and improving
compliance awareness, monitors the implementation ofcompliance-related measures, and checks activity programsfrom the year following its establishment. If necessary, it issues
instructions to correct insufficiencies. In response to this,individual divisions and subsidiaries set up compliancecommittees to carry out inspections and improvements suiting
their own operations. The Tokyo Gas Group maintains the Codeof Conduct as the standard for behavior when carrying out
duties. We are making continued efforts to ensure the Code of
Conduct is known and observed by employees throughworkplace discussions including the participation of all
employees at their workplaces and through rank-specifictraining sessions on the occasions of entry and promotion.

Advisory Committee Membership (as of June 26, 2020)

Committee chairman

Committee members
Takami Kazunori(Outside Director)

Nohara Sawako

Saito Hitoshi(Outside Director)(Outside Audit & Supervisory Board
Member)Hirose Michiaki(Director, Chairman of the Board)

Uchida Takashi(Representative Director, President)

In accordance with inquiries from the Board of
Directors, the Advisory Committee deliberates on officer
candidates and officer remuneration in a fair andappropriate manner and makes reports to the Board of
Directors. The committee also deliberates on the
independence of outside officer candidates.

Independent Auditors
The company has concluded an auditing contract with
KPMG AZSA LLC for auditing services based on the
Companies Act and auditing services based on the Financial
Instruments and Exchange Act, as well as internal control
audits based on the Financial Instruments and ExchangeAct, and the company is being audited on that basis. The
company’s audits are handled by three certified public
accountants: Shishido Michitaka, Tamura Toshiyuki and
Uehara Yoshihiro. For these auditors, the number ofconsecutive years of auditing service is 1 year, 3 years and 5
years, respectively (as of June 26, 2020).
Compensation for Independent Auditors (FY2019)
Compensation for auditing services

262 Million yen

Compensation for non-auditing services

15 Million yen

Total

277 Million yen

Compliance Risk Management
Through the formulation and implementation of escalation rulesthat encourage any employee finding anything unusual to notify
their manager without hesitation and through the effective
operation of internal and external advisory systems, we areendeavoring to ensure that compliance-related problems are
discovered and resolved quickly so that our corporate selfregulatory processes will continue to function effectively. We
monitor the effectiveness of Group compliance promotion
activities by conducting regular compliance awareness surveys ofall employees. The results of these surveys are reflected ininitiatives for the following years. Moreover, the Internal Audit
Department conducts internal audits of the Company and its
subsidiaries, focusing on the probability that risks will materialize
and their degree of importance from the viewpoint of strict
compliance with laws and regulations, corporate ethics and social
norms. The status of improvement concerning any
recommendations made as a result of the internal audits ischecked in a follow-up audit in the following year to ensure
steady improvement in risk management.

Corporate governanceTOKYO GAS INTEGRATED REPORT 2020

46

Risk Management System
Enterprise Risk Management System
The company has established an enterprise risk management (ERM) system, and drawn up
risk management regulations that include documented rules concerning major risks facedby the group.
The Risk Management Committee was established with the aim of improving themanagement level of the ERM system. The Committee checks progress regarding theestablishment and operational status of the ERM system, including periodic risk
assessments. It also reports to the Corporate Executive Committee and obtains thenecessary approvals.
Under the framework, around 150 Risk Management Promotion Officers are deployedin the business departments of Tokyo Gas and its subsidiaries in order to promote ERM.
Each year, we assess risks and the implementation and improvement status ofcountermeasures. This system facilitates the steady implementation of the ERM-PDCA(Plan-Do-Check-Act) cycle.

Crisis Management System
Because the company provides public services that comprise a lifeline, for many years it
has also had a crisis management system that serves as a response system in case an
accident or other risk-related event actually occurs. Specifically, we have formulated
Emergency Response Organization Regulations. In case of major crises, including major
natural disasters, such as earthquakes, or production or supply disruptions arising frommajor accidents at pipelines or LNG terminals, as well as epidemics of highly pathogenic
or infectious diseases, terrorism, failures in mission-critical IT systems, and complianceproblems, the Emergency Response Organization is established to respond to the situation
immediately in accordance with the Emergency Response Organization Regulations.
Periodic training is conducted in relation to major risk response measures. Moreover, thecompany has also formulated a business continuity plan (BCP) outlining its responses inthe event of a major earthquake of the magnitude assumed by Japan’s Cabinet Office, amajor accident disrupting gas supply, a widespread blackout, an epidemic of highly
pathogenic or infectious diseases, etc. This plan is in place to reinforce the company’s risk
management system.

Enterprise Risk Management (ERM) System

Emergency Response Organization*

Securities Markets and Other Stakeholders
Disclosure of risk information through Securities Report, Financial results andSustainability Report

President and CEO (Organization Leader)

Reflection of results of risk assessment

Corporate Executive Committee
Confirmation of major risks, etc.
Reporting and proposal of plans for assessmentof major risks and other necessary matters

Clear statement of risk
management policies

Collaboration
Instructions /ordersReportRisk Management Committee (Executive Office: Corporate Planning Dept.)
Identifying and confirming Group risk management
Report regarding results of risk assessment, status of
implementation of countermeasures, status of
improvement, etc.

Corporate
Planning Dept.
(Group-wide coordination)

Improvement proposals
Convey statement of risk
management policies

Business Departments / Subsidiaries(1) Identifying and evaluating risks, formulating and implementing risk countermeasures(2) Improvement of risk assessment, countermeasures

Business Departments* A department in charge of an executive office is predetermined depending on the type of emergency.

Corporate governanceTOKYO GAS INTEGRATED REPORT 2020

Board of Directors (As of July 1, 2020)

April 1974
June 2009

April 2014

Joined the Company
Director, Managing Executive Officer and in charge ofCorporate Planning Dept., Corporate Communications Dept.
and Affiliated Companies Dept.
Representative Director, Executive Vice President and Chief
Executive of Living Energy Div.
Representative Director, President

April 2018

Director and Chairman of the Board

April 2012

April 1979
June 2015
April 2016
April 2018

Reason for appointment In his career, Uchida Takashi has engaged
mainly in planning, resources and overseas business-related work duties.
Since April 2018, he has served as President and CEO, with ultimate
responsibility for the execution of duties within the company. He is highly
knowledgeable, and has extensive work experience with the company.

Reason for appointment

Director, Chairman of the Board

Hirose MichiakiOver the course of his career, Hirose Michiaki
has engaged mainly in planning-related work duties. For four years,
from April 2014 until March 2018, he served as President. Since April
2018, as Director and Chairman, he has served as chairman of the Boardof Directors. He is highly knowledgeable, and has extensive work
experience with the company.

Representative Director,
President and CEO

Uchida Takashi
April 1980
June 2016
April 2018

Joined the Company
Director, Managing Executive Officer and in charge of
Personnel Dept., Secretary Dept., General Administration
Dept., Compliance Dept., and Internal Audit Dept.
Representative Director, Executive Vice President and Chief
Executive of Residential Sales and Service Div.

April 1984
June 2017
April 2018
April 2020

Reason for appointment During his career, Takamatsu Masaru has
engaged mainly in sales to household consumers and planning-related
work duties. He currently serves as Executive Vice President. He is highly
knowledgeable, and has extensive work experience with the company.

Representative Director

Representative Director

Takamatsu Masaru

Nohata Kunio
April 1986
June 2020

Joined the Company
Director, Senior Managing Executive Officer and Chief
Executive of Asset Optimization & Trading Div.

Reason for appointment Sasayama Shinichi has engaged mainly induties related to planning. He currently serves as Senior Managing
Executive Officer in charge of LNG and electric power trading throughoptimal asset management and development of renewable energy andother power sources. He is highly knowledgeable, and has extensive
work experience with the company.

Director

Sasayama Shinichi

Joined the Company
Director, Managing Executive Officer and Chief Executive ofEnergy Resources Business Div.
Representative Director, Executive Vice President and Chief
Executive of Residential Sales and Service Div.
Representative Director, President and CEO

Joined the Company
Director, Managing Executive Officer of the Company, Chief
Executive of Power Business Div., in charge of Environmental
Affairs Dept.
Director, Senior Managing Executive Officer, Chief Executiveof Global Business Div.
Representative Director, Executive Vice President and Chief
Executive of Energy Solution Div., in charge of Sustainability Dept.

Reason for appointment Over the course of his career, Nohata Kunio
has engaged mainly in energy sales, resources and overseas businessrelated work duties. He currently serves as Executive Vice President incharge of sales to commercial and industrial consumers. He is highly
knowledgeable, and has extensive work experience with the company.

47

Corporate governanceTOKYO GAS INTEGRATED REPORT 2020

April 1976
June 2011

June 2017
June 2019

Joined Mitsui Fudosan Co., Ltd.
Executive Managing Director and Executive Managing Officerof Mitsui Fudosan Co., Ltd.
Managing Director and Senior Executive Managing Officer of
Mitsui Fudosan Co., Ltd.
Managing Director, Senior Executive Managing Officer and Chief
Executive of International Div. of Mitsui Fudosan Co., Ltd.
Advisor of Mitsui Fudosan Co., Ltd.
Director of the Company

June 2020

Retired from Advisor of Mitsui Fudosan Co., Ltd.

April 2013
April 2015

April 1978
June 2009
April 2012
April 2015
June 2017
March 2018
June 2019

Reason for appointment Mr. Saito Hitoshi is expected to use hisinternational perspective acquired from overseas businesses in the realestate industry, as well as his management capabilities, broad outlook
and in-depth knowledge gained through a wide range of businessdevelopment for the Company’s management.

Director

OutsideSaito Hitoshi

June 2019
October 2019

Director

OutsideTakami Kazunori

Reason for appointment Ms. Indo Mami is expected to use her in-depth
experience as analyst and consultant and in other areas related tocorporate management in the financial sector as well as her extensive
perspectives and advanced knowledge for the Company’s management.

Significant joint responsibilities
OutsideEdahiro Junko

Significant joint responsibilities

Outside Director of Tokyo FM Broadcasting Co., Ltd.
Outside Director of Nojima Corporation
Outside Director of FUJITA KANKO INC.
April 1985
Joined Daiwa Securities Co. Ltd.
April 2016
Senior Managing Director of Daiwa Institute of Research Ltd.
December 2016 Retired from Senior Managing Director of Daiwa Institute of
Research Ltd.
December 2016 Commissioner of Securities and Exchange Surveillance Commission
December 2019 Retired from Commissioner of Securities and Exchange SurveillanceCommission
June 2020
Director of the Company

Representative Director of Edahiroba Inc. (Current e’s Inc.)
Director and Chairperson of Change Agent Inc.
Professor of Shizenkan University Graduate School of
Leadership & Innovation
Director of the Company
Representative Director of Shimokawa Seeds K.K.

Reason for appointment Ms. Edahiro Junko is expected to use her
experience as a corporate manager, advanced specialization related tothe environment and in-depth knowledge as an environmental
journalist for the Company’s management.

Director

Joined Matsushita Electric Industrial Co., Ltd. (Current
Panasonic Corporation)
Managing Director of Panasonic Corporation
Representative Director, Senior Managing Executive officer andPresident of Appliances Company of Panasonic Corporation
Representative Director, Executive Vice President and in
charge of Japan region, Customer Satisfaction, and Design ofPanasonic Corporation
Corporate Advisor of Panasonic Corporation
Retired from Corporate Advisor of Panasonic Corporation
Director of the Company

Reason for appointment Mr. Takami Kazunori is expected to use his
management capabilities, broad outlook and in-depth knowledge
acquired through a wide range of business development in the electricalindustry for the Company’s management.

Significant joint responsibilities Outside Director of GLOBESHIP Corporation

April 2003
May 2006
August 201848

Representative Director of e’s Inc.
Director and Chairperson of Change Agent Inc.
Professor of Shizenkan University Graduate School of Leadership &Innovation
Representative Director of Shimokawa Seeds K.K.

Director

OutsideIndo Mami

Significant joint responsibilities

Audit & Supervisory Board Member (External) of Ajinomoto Co., Inc.
External Audit & Supervisory Board Member of AIG Japan Holdings KK

Executive Officers
Komiyama Tadashi Chief Executive of Regional Development Div.

President and CEO Uchida Takashi
Executive Vice
Presidents

SeniorManaging
Executive
Officers

Takamatsu Masaru Chief Executive of Residential Sales and Service Div.
Nohata Kunio

Chief Executive of Energy Solution Div. and in charge of Sustainability Dept.

Sawada Satoru

The Japan Gas Association

Hayakawa Koki

CFO in charge of Financial Management Dept., Accounting Dept.,
Purchasing Dept. and Internal Audit Dept.

Kishino Hiroshi

In charge of Corporate Planning Dept., General Administration Dept. andBusiness Transformation Project Dept.

Sasayama Shinichi Chief Executive of Asset Optimization & Trading Div.

Managing
Executive
Officers

Kimoto Kentaro

Chief Executive of Gas & Power Div. and Digital Innovation Div.

Shigitani Ayumi

General Manager of CIRIUS Project Dept., Digital Innovation Div. and President, Representative Director ofTOKYO GAS i NET CORP.

Higo Takashi

President, Representative Director of Tokyo Gas Engineering Solutions Corporation

Hosoya Isao

Chief Executive of Pipeline Network Company

Tanazawa Satoshi Chief Executive of Global Business Div.
Ogawa Shinsuke
Executive
Officers

In charge of Personnel Dept., Secretary Dept., Corporate Communications Dept. and Compliance Dept.

Nitta Yohei, Yoshioka Tomoyuki, Kikuyama Yoshiharu, Hanada Hiroshi, Saito Akihiro, Kado Masayuki, Konishi Yasuhiro, Sato Hirofumi,Endo Yo, Sugesawa Nobuhiro, Tsuji Eito, Kurimoto Kazuya, Imai Tomoo, Konishi Masako, Takeuchi Atsunori, Okumura Eigo

Corporate governanceTOKYO GAS INTEGRATED REPORT 2020

Audit & Supervisory Board Members (As of July 1, 2020)

April 1979
April 2013
April 2015
March 2017
June 2017

Joined the Company
Senior Executive Officer, Chief Executive of Pipeline Network Div.
Senior Executive Officer, Chief Executive of Regional
Development Marketing Div.
Retired as Senior Executive Officer
Audit & Supervisory Board Member of the Company

April 1982
April 2015
April 2018
March 2019
June 2019

Reason for appointment

Arai Hideaki is highly knowledgeable, and has
extensive work experience with the Company. He has engaged mainly inpipeline and wide-area sales-related work duties, and has also served asa Senior Executive Officer.
Audit & Supervisory
Board Member

Audit & Supervisory
Board Member

Arai Hideaki

Nakajima Isao
April 1981
April 2007
April 2016
June 2017

Joined Mitsubishi Corporation
Joined City of Yokohama
Director General of City Growth Strategy Promotion
Department, Economic Affairs Bureau, City of Yokohama
Consultant of Future City Promotion, Climate Change Policy
Headquarters, City of Yokohama
Audit & Supervisory Board Member of the Company
Retired from Yokohama City as a consultant

Reason for appointment Ms. Nohara Sawako is highly knowledgeable,and possesses corporate management experience and high-level
IT-related expertise. We hope that she will make use of these qualities
in her role as an Audit & Supervisory Board member for Tokyo Gas.
Significant joint responsibilities

Audit & Supervisory
Board Member Outside

Audit & Supervisory Board
Member Outside

Nobutoki Masato

Nohara Sawako

April 2013
June 2017
June 2017
June 2020

Joined Ajinomoto Co., Inc.
Member of the Board & Corporate Vice President in charge ofFinance and Purchasing
Member of the Investment Committee of Government Pension
Investment Fund
Retired from Member of the Board of Ajinomoto Co., Inc.
Retired from Member of the Investment Committee ofGovernment Pension Investment Fund
Audit & Supervisory Board Member of the Company

Reason for appointment Mr. Ono Hiromichi possesses a high level ofexperience in business administration and knowledge in finance andaccounting. We hope that he will make use of these qualities in his roleas an Audit & Supervisory Board member for Tokyo Gas.

Audit & Supervisory Board
Member Outside

Ono Hiromichi

Significant joint responsibilities

Outside Director of Mebuki Financial Group, Inc.

Reason for appointment Nakajima Isao is highly knowledgeable infinancial affairs and accounting, and has extensive work experience with
the Company. He has carried out financial and accounting operations
and has served as Senior Managing Executive Officer.

December 1988 Joined Life Science Institute Co., Ltd.
July 1995
Joined InfoCom Research, Inc.
December 2001 President and Representative Director of IPSe Marketing. Inc.
June 2018
Audit & Supervisory Board Member of the Company
April 2020
Project Professor, Graduate School of Media and Governance,
Keio University

Reason for appointment Mr. Nobutoki Masato is highly
knowledgeable and has extensive experience, both as a company
employee and as a member of staff at regional public bodies. We hopethat he will make use of these qualities in his role as an Audit &Supervisory Board member for Tokyo Gas.

April 1979
June 2011

Joined the Company
Senior Executive Officer, CFO and in charge of Finance Dept.,
Accounting Dept., Purchasing Dept. and Real EstateManagement Dept.
Senior Managing Executive Officer, CFO and in charge ofFinance Dept., Accounting Dept., Personnel Dept. andPurchasing Dept.
Retired as Senior Managing Executive Officer
Audit & Supervisory Board Member of the Company

President and Representative Director of IPSe Marketing. Inc.
Outside Director of Sompo Holdings, Inc.
Outside Director of DAIICHI SANKYO COMPANY, LIMITED49

Corporate governance

Messages from Outside Directors
Our Outside Directors that were involved in the formulation of
the Management Vision Compass 2030 (hereinafter “theVision”) talk about their discussions at the Board of Directors
meeting and their expectations of Tokyo Gas and its Group.

TOKYO GAS INTEGRATED REPORT 2020

50

I pushed for a plain message
Fifty years after Tokyo Gas began
importing LNG, we are now at a turning
point in energy. In addition to theworldwide trend towards
decarbonization, the deregulation of themarket is proceeding in Japan. The Tokyo
Gas Group needs to adapt to two strong
tides. Picturing the future 10 years fromnow and beyond was a challenging
process when drawing up the latest
long-term vision.
For the Vision, we, the Outside
Directors, took part not only in theformulation of strategy but also in otheraspects ranging from the framework to
how it was communicated. It was totallynew to me. The approach impressed on
me a strong desire to incorporate theopinions of people outside the company
into the Vision. I think it was verysignificant that executives exchanged
different opinions based on their own
backgrounds even though it was a little
time-consuming.
However, this resulted in a message
that was too large to be clearly
understandable. After that, I persistently
requested that the message should be
simple and short. I think that the final
form of the message, or the Vision, is
plain and sharp.
Director Outside

Saito Hitoshi

It includes the target of increasing the
profits of the overseas business to triple
their current level in 2030. In light of mypast experience in overseas business, I
think it is necessary that individual
employees build up their skills to keep up
with the high speed of overseas business.
Unlike in Japan, Tokyo Gas does nothave a solid platform or brand poweroverseas. Personal negotiating skills anddecision-making capabilities count there.
I hope that they will work towards
achieving the Vision with a businessmind full of a sense of ownership and acan-do spirit.

Corporate governanceTOKYO GAS INTEGRATED REPORT 2020

It may take time to carry out thetransformation, but it is important toaddress it with a focus on swiftness
We, the Outside Directors, were deeply
involved in the process of formulating the
Vision. We were often asked to give
opinions and the members actively
exchanged opinions based on their richexpertise in their areas of specialization.
The decision to address the challengeof achieving Net-Zero CO2 was based on
the company’s pride and its sense of its
mission to lead energy systems as Japan’s
first importer of natural gas.
Another highlight of the Vision is thereference to the transformation of the
LNG value chain. The action of expanding
business across the diverse functions of
the value chain and the creation ofdifferent kinds of value meanstransforming the conventional businessstructure. It may take time to carry out
the transformation. I said that it would
be important to address it with a focus
on swiftness.
I added that it would also benecessary to change employees’ mindset.
In a wait-and-see attitude, working is themere performance of a task. Essentially,“business” means thinking from a higher
perspective to take action. It is creativeand exciting. It is very challenging tomotivate individuals to act on thetransformation. However, it is fulfillingfor employees.
The key to success is humans. Achange of the business structure may
make some employees anxious about
their future. Diversification of the staff
will accelerate. In consideration of this,the Vision has engagement with current
and future colleagues as its final part.
I suppose that few corporate visions
carry messages to their employees. Fromthe perspective of my experience, I believethat employee satisfaction is a verysignificant element of business management
and highly appreciate the management’s
stance of valuing employees.

The Vision must define goals thatshould be attained, not just thethings that can be attained
When working out the Vision, the mostimportant thing was the time
perspective. Natural gas is moreenvironmentally friendly than oil or coal,
as it emits less CO 2. In addition, it iscompatible with renewable energy.
Towards 2030, its role will expand. On
the other hand, since it is a fossil fuel,its consumption should be reduced in
the long run to realize a decarbonizedsociety.
I do not think that the Tokyo Gas
Group’s role of supporting energy insociety will change. However, I
anticipate that what we sell and how wesell will change. I therefore said that weneed to distinguish between two
different time perspectives, namely theshort term and the long term, and todeliver messages to society from these
two separate perspectives.
In the process of drawing up avision, we discussed with an eye on the
future decarbonized society and made a
proposal of leading the world in nextgeneration energy systems. The Visionmust define goals that should be
attained, not just the things that can beattained. This goal will first inspire
employees, and then inspire society. It
can be achieved when all of us work

Director Outside

Director Outside

Takami Kazunori

Edahiro Junko

together. Businesses can only exist
within the scope in which they areneeded in society. I am convinced that
the Tokyo Gas Group has a strong will
and is capable of changing in responseto the future demands of society.
Specific actions towards Net-Zero CO 2
are already underway.
Tokyo Gas has a well-establishedsystem for preparing and providing
materials to ensure effective
deliberations at the Board of Directors
meetings. I feel that its members with
their respective expertise, including
myself, can freely deliberate as a teamwithout being urged to make hasty
decisions.

51

Corporate governanceTOKYO GAS INTEGRATED REPORT 2020

52

Messages from New Outside Officers
Utilizing my experiencein the capital market andunderstanding manydifferent points of view, I
will present my opinions
Director Outside

I will fulfill my role with afocus on the macro
perspective and foresight
Audit & Supervisory Board Member Outside

Ono Hiromichi

Indo Mami

To date, I have engaged in financial
analysis, investment banking andconsulting services. This gave me
opportunities to meet many different
business managers in various sectors andallowed me to broaden my views on
management. In different councils andcommittees of the Ministry of Economy,
Trade and Industry, I gained in-depth
knowledge on energy businesses andcommented from the perspective of thecapital market.
The energy industry is experiencing
drastic changes like no other in the past,
including intensifying competition
following deregulation and thedesignation of climate change as a key
management issue. I feel that the Tokyo
Gas Group is actively working to change
itself in this situation. I think that, tosustainably increase corporate value, it isimportant that every employee
understands the mission and thinks

themselves about how to take action.
In Compass 2030, the Tokyo Gas
Group committed to offer new value toall stakeholders, instead of merely
advancing its business. I hope that theGroup will try to develop its customers’
recognition of this new value, and notjust expand its business on the basis of
its own values or assets alone. For this, it
is vital to introduce value and assets
owned by diverse stakeholders and toinnovate in collaboration with them.
Understanding the perspectives ofdifferent stakeholders is significant inbusiness management. I believe that myrole is to advise in a way that will help
increase corporate value from manydifferent standpoints, including those of
the investors.

I have long worked in the field of financeand accounting for a food company.
When I worked in Thailand, I experienced
the Asian currency crisis. After returning toJapan, I took action to comply with theinternational accounting standards and theinternal control reporting system and copedwith the 2008 global financial crisis and manyother difficulties.
As a corporate officer in charge offinancial affairs, I took part in theadministration of business and spoke withinvestors. I also served as a member of theInvestment Committee of the Government
Pension Investment Fund (GPIF). I have been
involved in the capital market in several ways.
I feel honored to be able to serve Tokyo
Gas as an outside member of the Audit &Supervisory Board. Tokyo Gas is a company
not only serving the public interest but also
addressing the need for harmony with theenvironment, the competition following
deregulation and the further global

expansion of business.
The energy business invests hugeamounts of money. Its balance sheet
portfolio differs from food companies. In
addition, it has a different competitiveenvironment for reasons of the public
utilities service. Responsible for social
infrastructure, Tokyo Gas has the missions ofworking for stable energy prices, the stablesupply of energy and of making a profit as alisted company.
That being said, I strongly feel required
to view the business environment, businessstructure and other aspects of the businessfrom two perspectives, the public interest
and efficiency. I will use my past experience
to work towards achieving things in the
public interest and efficiency. With a focus
on the macro perspective and foresight aswell as on legal compliance in corporate
management, I will fulfill my role as an
Outside Audit & Supervisory Board Member.