Corporate GovernanceCorporate
Governance–––––––––––––––––––––––

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31

Overview of Corporate Governance System
Internal Control System
Outside Directors––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

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32

Officer Remuneration
Advisory Committee–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

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33

Audits by Corporate Auditors
Independent Auditors
Compliance–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

Risk Management System–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

Earthquake and Disaster Countermeasures––––––––––––––––––––––––

Toward the Realization of a Safe Gas Supply
that is Even More Resistant to Disaster Damage
Board of Directors and Corporate Auditors

33
34
36

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3729

30 Corporate GovernanceCorporate GovernanceTokyo Gas works to ensure continued development while consistently earning the trust of customers, shareholders, andsociety. 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 System
Tokyo Gas takes a proactive stance in employing outside directors

areas of responsibility, while directors, as appropriate, receive reports

and outside corporate auditors. The Company has created a systemon the status of execution from executive officers and monitor thefeaturing multiple auditing and supervisory layers in its aim to achieve

executive officers. In addition, executive officers report to the Board

highly objective and transparent governance.

of Directors as needed. (To clarify management responsibility andInvitation of Outside Directors

executive responsibility, the terms of office of directors and executive

In 2002, we reduced the number of directors to raise the speed andofficers have been fixed at one year.)effectiveness of management decision-making. In addition, we have

Working to Promote Transparent Management and Create ainvited outside directors to serve on the Board of Directors in order to

Flexible and Open Corporate Culture

improve transparency and to reinforce the supervision of businessIn fiscal 2002, the Company established the Management Ethics

execution. The Board of Directors has 11 members, including 3 out-

Committee, chaired by the President. We also formed in-house com-side directors.

mittees to address issues that are important from a management

Establishment of Advisory Committee

perspective, such as compliance, risk management, customer satis-

We have established the Advisory Committee, which is made up of
three representatives from the outside directors and outside corporate auditors and two inside directors. In accordance with inquiries

faction, and safety. This structure facilitates the sharing of information
within the Group, as well as deliberations, adjustments, and decisions
regarding the Group’s overall direction.

from the Board of Directors, the Advisory Committee selects officer

As of June 28, 2012

candidates in a fair and appropriate manner and deliberates on offi-

Overview of Corporate Governance Systemcer remuneration in accordance with the Company’s basic policy for

Number of directors

officer remuneration.

Average age of directors

Corporate Auditors

Number of outside directors

3

Number of independent officers

6

Number of corporate auditors

5

Number of outside corporate officers

3

In the past, the Company had invited 2 outside corporate auditors,
and in 2006 the number of outside corporate auditors was increased
by one. The five corporate auditors, which now include three outside

11
65.7

corporate auditors, conduct strict audits.

Participation of outside directors / outside corporate auditors
in determination of remuneration

Yes

Realizing Accurate, Rapid Decision-Making and EfficientParticipation of outside directors in determination of
director candidates

Yes

Business Execution

Number of meetings of Board of Directors*

11

The Corporate Executive Committee, which meets weekly as a general rule, deliberates on provisions stemming from Board of Directors’
resolutions and important management-related issues. The Company has introduced an executive officer system for business executionin accordance with decisions of the Board of Directors. Substantial

Attendance rate of outside directors at meetings ofBoard of Directors*
Term of office of directors

91%
One year

Results-linked remuneration

Yes

Share purchase system to reflect the perspective ofshareholders in management

Yes

authority has been delegated to executive officers in their designated* Total for the period from April 2011 to March 2012

Internal Control System
To secure management soundness and transparency and to realize

for Ensuring Appropriateness of Operations (Internal Control System)

the management philosophy, the Company has formulated thefor the Tokyo Gas Group,” and the Company is applying this policy in“Basic Policy on Development of Corporate Structures and Systems

an appropriate manner.

Corporate GovernanceOutside Directors
In accordance with their individual experience and knowledge, thewe comprehensively verify that they are unlikely to have conflicts ofoutside directors strive to secure the soundness and appropriate-interest with general shareholders and they are in a position that en-ness of deliberations and decisions regarding business execution.

ables them to be objective and neutral, and on that basis we make a

From an independent viewpoint, the outside directors monitor the

judgment on their independence. The Advisory Committee has con-performance of duties by the directors and exercise their authority atfirmed that none of the outside officers has a material conflict ofmeetings of the Board of Directors. In this way, the outside directors

interest with the Company—in regard to capital, transactions, or rela-contribute to the improvement of the rationality and objectivity of thetionships—and has confirmed their independence in accordanceCompany’s business execution and of the deliberations and deci-with the above standards. The Committee’s decision has been re-sions of the Board of Directors.

ported to the Board of Directors, which has designated them as

In making judgments about matters related to the independence

independent officers and reported that designation to the stock ex-of outside officers, such as capital, transactions, and relationships,

Namechanges on which the Company is listed.

Current position

Reason for selection

Yukio Sato

Vice Chairman of the Japan Institute ofInternational Affairs

The Company’s management will benefit from Yukio Sato’s international way of thinking nurtured through diplomacy,wide perspective and in-depth knowledge.

Ryuichi Tomizawa

Senior Corporate Advisor of Mitsubishi
Chemical Holdings Corporation

The Company’s management will benefit from Ryuichi Tomizawa’s international way of thinking nurtured in
the aggressive overseas penetration of the chemical industry, wide perspective, and in-depth knowledge.

Yoshihiko Nakagaki

Corporate Advisor of Electric Power
Development Co., Ltd.

The Company’s management will benefit from Yoshihiko Nakagaki’s management way of thinking nurtured at ElectricPower Development Co., Ltd., in a wide range of business development activities, including electric power source
development and electric power wholesale supply, and his advanced capabilities in management, such as
the implementation of reforms reflecting changes in the operating environment.

Corporate Governance System
Customers

Local Community

Shareholders / Investors

General Shareholders’ Meeting
Appointment
ReportCollaboration

Advisory Committee*2

Board of Directors*1
Inquiry

Audit

MonitorReport submission

Management Ethics Committee

Collaboration

Collaboration

Audit

Report submission

AnswerInternal Audit Department

ReportIndependent Auditors

Appointment

Board of Corporate Auditors*3

Appointment

ReportPresident(Corporate Executive Committee*4 )Approval

Deliberation
and report

Safety Committee
Customer Satisfaction
Promotion Committee
Investment Evaluation Committee
Environmental Committee

Settlement and monitor

Report submission

Corporate Communications
Promotion Committee
Risk Management Committee
Other In-House Committees

Audit

Business Departments /Subsidiaries and Affiliates

Add to agenda and report
Decision and risk monitoring

General Shareholders’ Meeting*3*1 Board of Directors: 11 directors (3 outside directors and 8 internal directors) 5 Auditors (3 outside auditors and 2 internal auditors)*2 Advisory Committee: 3 representatives from outside directors and outside auditors, Chairman, and President*3 Board of Corporate Auditors: 5 corporate auditors (3 outside auditors and 2 internal auditors)*4 Corporate Executive Committee: President, 2 Executive Vice Presidents, 11 Senior Executive Officers(3 of the representative directors also serve as President and Executive Vice Presidents)

Stakeholders

Tokyo Gas Co., Ltd.

Business Operations31

32 Corporate Governance

Officer Remuneration
In 2005, the Company formulated the basic policy on officer remu-

shall be determined in accordance with the post of each inside direc-

neration, which outlines the method of remuneration for officers, etc.

tor after performance evaluation.

At a meeting of the Board of Directors in February 2012, the policy(3) Remuneration of outside directors shall comprise monthly remu-

was revised as follows.

neration and bonus. Monthly remuneration shall comprise only fixed

1. Role of Executive and Remuneration

remuneration, while bonus shall be the same as that of inside directors.

The role demanded of officers is to seek to enhance short-, medium-,

4. Remuneration of Corporate Auditors and Its Compositionand long-term corporate value, and officer remuneration shall serve(1) Remuneration of corporate auditors shall be paid within the scope

as an effective incentive for them to perform that role.

of the remuneration limit approved at the Shareholders Meeting de-

2. Level of Remuneration

termined through discussions among corporate auditors.

The level of officer remuneration shall be suitable for the role, responsibility, and performance of the officer.

(2) Remuneration of corporate auditors shall comprise only fixedmonthly remuneration.

5. Assurance of Objectivity and Transparency of

3. Remuneration of Directors and Its Composition(1) Remuneration of directors shall be paid within the scope of the
remuneration limit approved at the Shareholders’ Meeting.
(2) Remuneration of inside directors shall comprise monthly remuneration and bonus. Monthly remuneration shall comprise fixed
remuneration paid in accordance with the post of each individual andperformance-linked remuneration. The amount of bonus to be paid

Remuneration System
The Company shall assure the objectivity and transparency of thesystem of officer remuneration by establishing and operating the“Advisory Committee” comprising outside directors, outside corporate auditors and a number of inside directors to govern the system of
personnel affairs and remuneration of officers.
Millions of yen
TypeTotal Remuneration for Directors and Corporate Auditors (Fiscal 2011)

Remuneration for directors (excluding outside directors)
Remuneration for corporate auditors(excluding outside corporate auditors)
Remuneration for outside officers(outside directors and outside corporate auditors)

Thousands of U.S.dollars*2
Type

Number of
directors/auditors

Total value of
remuneration

Base

Bonuses

Base

Bonuses

9*1

¥447

¥391

¥56

$4,711

$675

3*1

74

74

—

892

—

7*1

¥ 65

¥ 58

¥ 7

$ 699

$ 84

*1 The number of officers included in the total value of remuneration for directors, corporate auditors, and outside officers includes two directors (of which, one was an outside officer) and one corporate
auditor who retired upon the conclusion of the 211th Annual Shareholders’ Meeting.
*2 Equivalent U.S. dollar amounts are included for the convenience of readers outside Japan, and are converted at a rate of ¥83 per U.S. dollar, the prevailing exchange rate on March 30, 2012.
These conversions should not be construed as representations that the Japanese yen amounts have been, could have been, or could in the future be, converted into U.S. dollars at this or any
other rate of exchange.

Advisory Committee
In February 2005, we established the Advisory Committee, whichof Directors, the Advisory Committee deliberates on officer candi-

has five members—three representatives from the outside directors

dates and officer remuneration in a fair and appropriate manner andand outside corporate auditors as well as the Chairman and the

makes reports to the Board of Directors. The committee also deliber-

President. The committee works to assure objectiveness and trans-

ates on the independence of outside officer candidates.

parency in management. In accordance with inquiries from the Board

Audits by Corporate Auditors
Board of Corporate Auditors
The Board of Corporate Auditors meets once a month as a generalrule and otherwise as needed. The five members of the board, which
include three outside corporate auditors, conduct deliberations andmake reports.
In line with the Corporate Auditor’s Audit Standards, each corporate auditor conducts effective audits through the following principal
initiatives.
The corporate auditors attend meetings of the Board of Directors, the Corporate Executive Committee, and other important
meetings. They state their opinions relating to legality and otherperspectives when necessary.

The corporate auditors conduct research into the state of operations at the head office, major business offices, andsubsidiaries, and hold discussions with directors to exchange
opinions, both on a regular basis and otherwise as needed.
The corporate auditors cooperate closely with the Audit Department, which is the internal audit organization, and with theindependent auditors and strictly audit the execution of duties
by the directors, targeting the establishment of a high-quality
corporate governance system.
In regard to the internal control system for financial reporting,the corporate auditors receive evaluations of internal control
and reports on the status of audits from the Board of Directors
and KPMG AZSA LLC.

Corporate GovernanceOutside Corporate Auditors

In making judgments about matters related to the independence

The outside corporate auditors conduct audits / monitoring from anof outside officers, such as capital, transactions, and relationships,

independent viewpoint and contribute to improving the rationality andwe comprehensively verify that they are unlikely to have conflicts ofobjectivity of the Company’s business execution and of the delibera-interest with general shareholders and they are in a position that en-

tions of the Board of Directors through their statements at meetings

ables them to be objective and neutral, and on that basis we make aof the Board of Directors. In addition, through their statements andjudgment on their independence. The Advisory Committee has con-the exercise of their majority voting rights at meetings of the Board of

firmed that none of the outside officers has a material conflict ofCorporate Auditors, the outside corporate auditors contribute to as-interest with the Company—in regard to capital, transactions, or rela-suring and improving the legality, appropriateness, rationality, andtionships—and has confirmed their independence in accordance

objectivity of the audits by the corporate auditors. In addition, with thewith the above standards. The Committee’s decision has been re-objective of assuring the effectiveness of audits by the corporate au-

ported to the Board of Directors, which has designated them as

ditors, the Company invites outside corporate auditors who have a

independent officers and reported that designation to the stock ex-

substantial degree of knowledge about finance and accounting.

changes on which the Company is listed.

Name

Current position

Reason for selection

Yukio Masuda

Consultant of Mitsubishi Corporation
Outside Director of Showa Shell Sekiyu K.K.

The Company’s auditing will benefit from Yukio Masuda’s excellent management capability and experiences
nurtured at a major trading company and high level of knowledge about the energy business.

Masayuki Osawa

Outside Auditor of PACIFIC CONVENTION PLAZAYOKOHAMAThe Company’s auditing will benefit from Masayuki Osawa’s abundant experience acquired at a local
government and a regional economic grouping as well as in-depth knowledge about financial administration.

Yoshihiko Morita

Advisor of Sumitomo Mitsui Banking Corporation,
President of Japan Institute for Overseas Investment

The Company’s auditing will benefit from Yoshihiko Morita’s wide-ranging international way of thinking andexperience nurtured through work in the fields of international finance and overseas economic cooperation.

Independent Auditors
The Company has concluded an auditing contract with KPMG AZSA

Company’s audits are handled by three certified public accoun-

LLC for auditing services based on the Companies Act and auditingtants—Seiichi Sasa, Koji Kakinuma, and Masaru Miura. For each ofservices based on the Financial Instruments and Exchange Act, asthese auditors, the number of consecutive years of auditing service iswell internal control audits based on the Financial Instruments andless than seven years (as of June 29, 2012).

Exchange Act, and the Company is being audited on that basis. The
Compensation for independent auditors (Fiscal 2011)

Millions of yen

Thousands of U.S.dollars*

Remuneration for auditing services
Remuneration for non-auditing services
Total

¥259
30
¥289

$3,120361$3,481* Equivalent U.S. dollar amounts are included for the convenience of readers outside Japan, and are converted at a rate of ¥83 per U.S. dollar, the prevailing exchange rate on March 30, 2012. These conversions
should not be construed as representations that the Japanese yen amounts have been, could have been, or could in the future be, converted into U.S. dollars at this or any other rate of exchange.

Compliance
The Company has identified the following three points as its basic

we promote a thorough awareness of ongoing activities related to ourpolicy and is promoting compliance on that basis.

code of conduct that was revised in 2004. We are also moving for-Fostering of a compliance oriented mentality
Compliance efforts by each workplace based on the group policy

ward with a compliance casebook designed for applying the code of
conduct to various problems in the workplace, so as to achieve thepermeation of compliance.

Establishment of the compliance PDCA cycle

Compliance Structure

Addressing Compliance Risk

We have established the Management Ethics Committee, chaired byThrough the effective operation of internal and external advisory sys-

the President. This committee discusses at the management leveltems, we are endeavoring to ensure that compliance-related problems

basic compliance policies and all aspects of compliance initiatives byare discovered and resolved quickly so that our corporate self-regula-

the Company, monitors the implementation of compliance-related

tory processes will continue to function effectively. We monitor themeasures, and confirms activity programs from the following year andeffectiveness of Group compliance promotion activities by conducting

thereafter. We have also established the Compliance Department toregular compliance awareness surveys of all employees. The results oflead compliance-related activities for each unit. These include devel-

these surveys are reflected in initiatives for the following years. The

opment of compliance promotion systems, encouraging awareness

Audit Department’s Compliance Audit Group conducts audits of theand educational campaigns about the code of conduct, compliance

Company, its subsidiaries, and its affiliates from the viewpoint of strictrisk reduction measures, maintenance of advisory systems, and thecompliance with laws, corporate ethics, and social norms. When con-broad-based distribution of information within and beyond the Tokyo

cerns are identified, the Group conducts follow-up audits in theGas Group companies. To cultivate an understanding of compliance,

following year to verify progress in tackling those concerns.

33

34 Corporate GovernanceRisk Management System
Enterprise Risk Management (ERM)

the Corporate Executive Committee and obtains the necessary ap-

In fiscal 2003, the Company established an enterprise risk manage-

provals. Moreover, since the start of fiscal 2011, the Corporate

ment (ERM) system. The Board of Directors has established risk

Planning Dept. has been responsible for the risk management func-

management regulations, which include documented rules concern-tion, thus creating a framework for implementing unified ERM

ing major risks faced by the Group.

together with operational management.

The Risk Management Committee was established in fiscal 2008

Under the new framework, around 120 Risk Management Pro-

with the aim of identifying and evaluating progress regarding the es-

motion Officers have been deployed in the business departments oftablishment and the operational status of the ERM system, as well asTokyo Gas and its subsidiaries and affiliates in order to promote ERM.

improving the level of ERM. The committee periodically undertakes

Each year, we assess risks and the implementation and improvement

risk assessments and checks on progress regarding the establish-

status of countermeasures. This system facilitates the steady imple-

ment and the operational status of the ERM system. It also reports tomentation of the ERM-PDCA (Plan-Do-Check-Act) cycle.

Enterprise Risk Management (ERM)
Corporate Executive Committee
Confirmation of major Group risks
Reflection of resultsof risk assessment

Securities Markets and Other Stakeholders
Disclosure of risk information through Yuho
Securities Report, Financial results, Annual
report, CSR report, etc.

Report / proposal for plan for assessment of majorGroup risks / other essential matters

Clear statement of risk
management policies

Risk Management Committee(Executive Office: Corporate Planning Dept.)(1) Identifying, confirming, and evaluating Group risk management(2) Examination and confirmation regarding ERM
Reports regarding results of risk assessment, statusof implementation of countermeasures, status of
improvement, etc.

Business Departments / Subsidiaries and Affiliates

Feedback of evaluation results /improvement proposals
Clear statement of risk
management policies(1) Identifying and evaluating risks, formulating and implementing risk countermeasures(2) Improvement of risk assessment, countermeasures

Risk Management
Because the Company provides public services that comprise a lifeline, for many years, we have also had a crisis management systemthat serves as a response system in case an accident or other riskrelated event actually occurs. Specifically, we have formulated
Emergency Response Organization Regulations. In case of major

Emergency Response Organization
Suggestion of establishment of Emergency Response Organization, etc.

President(Organization Leader)

Executive Officenatural disasters, such as earthquakes, or production or supply disruptions arising from major accidents at pipelines or terminals, as wellas influenza, terrorism, failures in mission-critical IT systems, compli-

Instructions /orders reports

ReportCollaboration

ance problems, etc., the Emergency Response Organization
responds 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 in the event of a major earthquake of themagnitude assumed by Japan’s Cabinet Office, a major accident disrupting power supply, an outbreak of influenza, etc. This plan is inplace to reinforce the Company’s risk management system.

Business Departments

Corporate Planning Dept.
(Groupwide coordination)* The organizational unit in charge of the executive office is determined in advance in accordancewith the type of the emergency.

Corporate Governance

FAQ Regarding Risks Related to Management
Strategies

investors are increasingly concerned with the heightened diversifica-

In accordance with the management strategies in the “Challengetion and intensification of risks. This section explains the Company’s

2020 Vision,” the Tokyo Gas Group is implementing aggressive initia-

approach / response to risks related to management strategies, intives in a wide range of fields, such as diversification and expansion into

regard to which the Company often receives questions from investors.

upstream businesses overseas. Accompanying these initiatives,

Q1. The vision outlines plans for gas sales volume toincrease to 22.0 billion cubic meters. Following theearthquake demand for LNG in Japan has increased
rapidly. In addition, given the trend toward reduced
environmental burdens, LNG demand is expected toincrease on a global basis. Will a tightening of thedemand-supply balance have an adverse affect on
raw material procurement?

A1. Following the earthquake, the shift toward natural gas has accelerated, and in
the short term it is possible that the demand–supply balance will be tight. However,with multiple new projects as well as an increase in the supply of unconventional
natural gas, such as shale gas and CBM, our supply capacity is sufficient. We believethat demand and supply will be balanced, in both the short term and the medium tolong term. Moving forward, we will implement an appropriate response as we trackchanges in energy policy, including the use of nuclear power.

Q2. Isn’t the risk of investing in upstream businesses
very high? Rather than expanding upstream operations, shouldn’t your focus be on stable gas
operations?

A2. Upstream operations are said to be high risk because they generally involve exploration. The risk that we incur is limited because we only invest in projects forwhich reserves have been estimated and for which demand is assured through longterm contracts with purchasers, including the Company. In addition, we closely adhere to in-house investment standards, select projects that will generate a sufficienteconomic return, and make our participation decision.

Q3. With expansion of electric power generationand preparation of the wide-area pipeline network,
isn’t it possible that the Company will over-invest?

A3. Our basic approach to investment, including the electric power business and thewide-area pipeline network, is to make decisions based on economic rationality. Ourpolicy is to use our funds effectively, investing only in projects from which we can
expect an appropriate return.

Q4. Japan’s gas industry will be affected by regulatory reforms that are being advanced, such ascomplete deregulation and the separation of electric
power generation and transmission. Doesn’t this situation present a risk to the Company’s profitability?

A4. Future policies are currently under deliberation, and it is difficult to foresee thefuture of the energy framework. However, our vision sets out our intention to expand
profits in large-scale, unregulated fields in the future. For example, even if regulatory
reform is advanced, we believe that we will be able to sustain our profitability.

Q5. The Company has indicated that it will securecommercial demand in the Tokyo metropolitan region as a source of demand for gas sales volume,
but isn’t there a risk that demand will decline due toa further shift of plants to overseas locations?

A5. In our vision, we set out a goal of sales of 22.0 billion cubic meters of gas in thefiscal year ending March 2021, and this includes the reduction in demand stemmingfrom the surfacing of the risk of industrial hollowing out.

Q6. Real estate is not the Company’s core business.
Does the in-house development of real estate holdings, such as Tamachi, pose substantial risks, and is
this use of funds not in accordance with the expectations of shareholders?

A6. Real estate is positioned as a business to increase our corporate value, and inregard to large sites with high potential, such as Tamachi, we are focused on development with limited risk following initiatives to increase value, such as rezoning andurban planning. In addition, we will also advance initiatives as an energy enterprise,such as the introduction of advanced energy systems. In regard to other idle realestate, we will make decisions on a case-by-case basis, with options including use
within the Group or disposal.

Reference

In regard to major risks related to the Group’s operations and items for which there is a possibility of a significant influence on investment decisionsof investors, please refer to the Risks of Business section of the Consolidated Financial Results Bulletin for the Fiscal Year Ended March 31, 2012
(J-GAAP)35

36 Corporate Governance

Earthquake and Disaster Countermeasures
Tokyo Gas is strengthening its earthquake and disaster countermeasures, which are divided into three categories:
preventive measures, emergency response measures, and restoration measures.

Preventive Measures

medium-pressure and low-pressure pipelines into multiple disasterWe have built production and supply facilities using advanced seis-

prevention blocks. In times of emergency, the supply to severely

mic design standards and we have doubled and tripled safety

damaged areas is cut off on a local basis, and the influence on otherprecautions. Our city gas production facilities have been built so thatblocks is minimized.

they are capable of withstanding earthquakes on a scale similar to
the Great Hanshin-Awaji Earthquake (M7-class earthquakes). In our

Division of the low-pressure
pipeline network(179 low-pressure blocks)

underground tanks, the surface level of the liquid is always below
ground level. Consequently, even in the unlikely event of a crack or
break in a tank, the LNG could not seep outside. Tokyo Gas uses
high-pressure and medium-pressure pipelines made from welded

Division of the medium-pressure
pipeline network(15 medium-pressure blocks)

steel pipes that provide exceptional strength and flexibility. In boththe Great Hanshin-Awaji Earthquake and the Great East Japan

Disaster prevention blocks

Earthquake, the pipes exhibited
Underground tanks

excellent earthquake resistance.

Emergency Response Measures
Safety equipment on gas meters (microcomputer controlled) auto-

Restoration Measures

matically stops the flow of gas when a gas leak or an earthquake

We have made thorough preparations to resume service as quickly

measuring five or more on the Japanese seismic intensity scale isas possible in areas where the supply of gas has been shut off. In

detected. In addition, we have installed emergency shutoff equip-

particular, under the auspices of the Japan Gas Association, a systemment to ensure safety in such locations as underground shopping

has been established to coordinate the cooperative efforts of gas

centers and tall buildings. This equipment makes it possible to shutcompanies from throughout Japan in the event of a major disaster.

off the gas supply for an entire underground shopping center or an

Following the Great East Japan Earthquake, the number of people

entire building.

who came from throughout the country to engage in restoration ac-

To maintain a stable supply of gas in as extensive an area as pos-

tivities under this system reached about 4,100 at one point.

sible while also preventing secondary damage, we have divided our

Toward the Realization of a Safe Gas Supply That Is Even More Resistant to Disaster Damage
Following the Great East Japan Earthquake, which caused damage on a scale that exceeded all expectations,
we have implemented the following principal countermeasures.

Measures to Prevent Damage from Earthquakes,
Tsunami, and Other Disasters.
As of 2020, we will aim to restore service within 30 days excluding
the most heavily damaged areas. (Assuming an earthquake on ascale similar to the Great Hanshin-Awaji Earthquake with an epicenter directly under the Tokyo metropolitan area, for which
restoration currently would take 55 days.)introduction of a remote restart system for governors (pressuretransformers)
At LNG terminals, we will strengthen countermeasures for earthquake, tsunami, etc., and implement new revetment liquefaction
countermeasures.

Power Failure Countermeasures･ We will further enhance the system of disaster prevention blocks

We will take steps to strengthen power failure countermeasures at

into which supply areas are divided when there is an earthquake.

plants, such as strengthening in-house power generation facilities,

Specifically, we will create more blocks and establish blocks withand prepare for unexpected situations, including earthquakes.

advanced earthquake resistance. In addition, we will establish
tsunami and liquefaction blocks. In this way, we will enhance ourability to minimize the areas in which supply is shut off when

Assuring Security

there is an earthquake. (By June 2012, the sub-division of theWe will accelerate the replace-

low-pressure network had been completed, creating 179 blocks.)

ment of old cast iron pipes and･ We will realize rapid restoration through the development andother old pipes with PE pipes.

PE pipes offer superior durability
and earthquake resistance.

Corporate Governance

Board of Directors and Corporate Auditors
As of June 28, 2012

Directors

Representative Director, President

Director, Chairman

Tsuyoshi Okamoto

Mitsunori Torihara
April
June

1967
2003

April
April

2006
2010

July
April
June

1972
2004
2007

April

2010

April
April

1975
2004

April
June
April

2006
2009
2012

April
April

1975
2005

April

2009

June

2011

Joined the Company
Representative Director, Executive Vice President, Division Manager of Strategic
Planning Div. and in charge of Internal Audit Dept. and Compliance Dept.
President, Representative Director, and Executive President
Director and Chairman of the Board

April
June
April

1970
2004
2007

April

2010

Joined the Company
Director, Senior Executive Officer and Division Manager of Strategic Planning Div.
Representative Director, Executive Vice President, and in charge of Personnel Dept.,
Secretary Dept., General Administration Dept., Compliance Dept., and Internal
Audit Dept.
President, Representative Director, and Executive President

Representative Director

Representative Director

Shigeru MurakiMichiaki Hirose

Joined the Company
Senior Executive Officer and Division Manager of R&D Div.
Director, Senior Executive Officer and Chief Executive of Energy Solutions Div. andGeneral Manager of Volume Sales Dept. of Energy Solution Div.
Representative Director, Executive Vice President, Chief Executive of Energy Solutions
Div. and General Manager of Volume Sales Dept. of Energy Solution Div.

April
April

1974 Joined the Company
2007 Senior Executive Officer and in charge of Corporate Planning Dept., Infrastructure
Project Dept., Finance and Managerial Accounting Dept., Accounting Dept. and Affiliated Companies Dept.
June2009 Director, Senior Executive Officer and in charge of Corporate Planning Dept.,
Corporate Communications Dept., and Affiliated Companies Dept.
January 2010 Director, Senior Executive Officer and in charge of Corporate Planning Dept., ProjectManagement Dept., Corporate Communication Dept. and Affiliated Companies Dept.
April
2012 Representative Director, Executive Vice President, Division Manager of Living
Energy Div.

Director

Director

Tsutomu Oya

Mikio Itazawa

Joined the Company
Executive Officer, General Manager of Urban Energy Business Dept. of Energy Sales
and Service Div. and Acting General Manager of Volume Sales Dept. of Energy Sales
and Service Div.
Senior Executive Officer and Chief Executive of Energy Resources Div.
Director, Senior Executive Officer and Chief Executive of Energy Resources Div.
Director, Senior Executive Officer, Division Manager of Energy Production Div.

April
June
April
April
June

1974
2003
2004
2007
2010

Joined the Company
General Manager of West Pipeline Business Dept. of Pipeline and Maintenance Div.
Executive Officer and General Manager of Pipeline Dept. of Pipeline Network Div.
Senior Executive Officer and Division Manager of Pipeline Network Div.
Director, Senior Executive Officer and Division Manager of Pipeline Network Div.

Director

Director

Kazuo Yoshino

Matsuhiko Hataba

Joined the Company
Executive Officer and General Manager of Finance and Managerial Accounting Dept.
of Strategic Planning Div.
Senior Executive Officer and General Manager of Investor Relations Dept., and in
charge of Finance & Managerial Accounting Dept., and Accounting Dept.
Director, Senior Executive Officer and Division Manager of Information Technology
Div., and in charge of Finance & Managerial Accounting Dept. and Accounting Dept.

April
April

1976
2006

April
June

2009
2012

Joined the Company
Executive Officer and General Manager of Human Resources Dept. of BusinessSupport Div.
Senior Executive Officer and Division Manager of Living Energy Div.
Director, Senior Executive Officer and in charge of Corporate Planning Dept.,
TG-Group Reorganization Project Dept. and Affiliated Companies Dept.

37

38 Corporate GovernanceOutside Directors

Outside Director

Outside Director

Yukio Sato

Ryuichi Tomizawa

April
1961 Joined the Ministry of Foreign Affairs
September 1998 Permanent Representative of Japan to the United Nations (Ambassador of Japanto the United Nations)February 2003 President of The Japan Institute of International Affairs
December 2004 Commissioner of National Public Safety Commission
February 2009 Vice Chairman of The Japan Institute of International Affairs (Current position)
June
2010 Outside Director of the Company

New Outside Director

Outside Director

Yoshihiko Nakagaki

April
April

1965 Joined Mitsubishi Kasei Industries Corporation (Current Mitsubishi Chemical Corporation)2000 President of Mitsubishi-Tokyo Pharmaceuticals, Inc. (Current Mitsubishi Tanabe
Pharma Corporation)
June
2002 Member of the Board, President and Chief Executive Officer of Mitsubishi Chemical
Corporation
October 2005 Member of the Board, President of Mitsubishi Chemical Holdings Corporation
April
2007 Member of the Board, Chairman of Mitsubishi Chemical Holdings CorporationJune
2011 Outside Director of the Company
June2012 Senior Corporate Advisor of Mitsubishi Chemical Corporation (Current position)

April
June

1961
1996

June
June

1998
2000

June

2001

June

2009

June

2012

Joined Electric Power Development Co., Ltd. (J-POWER)
Director and Department Director of Corporate Planning Dept. of Electric Power
Development Co., Ltd. (J-POWER)Managing Director of Electric Power Development Co., Ltd. (J-POWER)
Vice President and Representative Director of Electric Power Development Co., Ltd.
(J-POWER)
President and Representative Director of Electric Power Development Co., Ltd.
(J-POWER)
Corporate Advisor of Electric Power Development Co., Ltd. (J-POWER)(Current position)
Outside Director of the Company

Following the Great East Japan Earthquake, which occurred on March 11,

November 2011. It is my hope that the Company will venture to be an ideal

2011, it became painfully clear that Japan suffered from an overdependence

energy company; a company that benefits itself by fulfilling its mission of

on foreign countries for its primary energy resources. This cast light on theprotecting national interests. In particular, I think it is of the utmost importanceimportance of developing an optimally balanced portfolio consisting of various

for Tokyo Gas to practice management based on a long-term perspective.

different types of energy, and formulating a medium- to long-term vision for

While investment and other initiatives that involve incurring expense place

the management of this portfolio that considers such concerns as how

downward pressure on income over the short term, such efforts also result instable, low-cost procurement will be realized. At the same time, as members

long-term improvements in shareholder value. Not only must the Company

of a consuming nation, we need to think about how we will fulfill our

realize this itself, steps must also be taken to communicate this fact toresponsibility of reducing CO2 emissions. In Japan, we are faced with theshareholders. In addition, I feel that Tokyo Gas should avoid developing

need of addressing these two tasks, neither of which can be put off. A heavy

overseas businesses that only promise short-term returns and are riddled

responsibility has thus been handed to electricity and gas companies, whichwith risks. Rather, the Company should focus on solidifying the ground

serve as the main vessels through which these issues must be addressed.

beneath its feet so that it may steadily accelerate its growth into the future. In

Amidst this turbulence, Tokyo Gas has become a star of anticipation as it

other words, I want Tokyo Gas to minimize risks while realizing development

accelerates the expansion of overseas upstream projects in accordance withover the long term. To aid them in this quest, I will offer all the assistance thatits “Challenge 2020 Vision” long-term management vision, announced in

I can, based on the experience I have accumulated up until this point.

Auditors

April
April

1972
2004

April
June

2007
2009

Auditor

AuditorKunihiro Mori

Manabu Fukumoto

Joined the Company
Executive Officer and General Manager of Energy Production Dept. of Energy
Production Div.
Senior Executive Officer and assistant to Director of General Administration Dept.
Corporate Auditor of the Company

April
April

1975
2006

June

2009

June

2011

Joined the Company
Executive Officer and General Manager of General Administration Dept. of Corporate
Communication Div.
Senior Executive Officer and in charge of Purchasing Dept., Real Estate Management
Dept., Major Site Development Dept. and Internal Audit Dept.
Corporate Auditor of the Company

Corporate GovernanceOutside Auditors

April
April
June

1964
2002
2008

March 2009

Outside Auditor

Outside Auditor

Yukio Masuda

Masayuki Osawa

Joined Mitsubishi Corporation
Representative Director and Executive Vice President of Mitsubishi Corporation
Consultant of Mitsubishi Corporation (Current position)
Outside Corporate Auditor of the Company
Outside Director of Showa Shell Sekiyu K.K. (Current position)

April
October
April
June
June

1966
2006
2009
2009
2010

Joined the Yokohama City Hall
Senior Director of the Yokohama Chamber of Commerce & Industry
Administrative Director of Yokohama City Silver Human Resources Center
Outside Corporate Auditor of the Company
Outside Auditor of PACIFIC CONVENTION PLAZA YOKOHAMA (Current position)

New Outside Auditor
April
1969
October
2004
December 2011
June
2012

Joined Export-Import Bank of Japan
Vice Governor of Japan Bank for International Cooperation
Advisor of Sumitomo Mitsui Banking Corporation (Current position)
President of Japan Institute for Overseas Investment (Current position)
Outside Corporate Auditor of the Company

Outside Auditor

Yoshihiko Morita

We are currently immersed in an era characterized by rapid change. In Japan,

is placed in a unique position as it is both a public utility, which entails assum-

one notable change is the rising degree of attention that society is paying

ing a great deal of social responsibility, and a private company that has totoward energy companies. This concern is higher than ever, a trend that canpursue profits. Therefore, it must strike a balance between these two differing

be attributed to the energy-related issues that surfaced last year. As a leading

aspects of its operations if it is to achieve sustainable growth.

gas company in Japan, Tokyo Gas is in a prime position to spearhead efforts

Tokyo Gas employs over 16,000 people on a consolidated basis. As an

to reduce the importation prices for natural gas, which are high compared toorganization grows larger or as its operations spread to different areas, theother countries, and return the benefits of these reductions to consumers. It

range of problems that may occur obviously grows wider. For this reason, it

is extremely difficult to realize raw material price reductions in the short term.

is vital to establish a corporate culture of openness that facilitates problem

Regardless, I hope the Company will formulate solid plans for the future, andsolving both on a small scale and on the larger organizational scale. Further-

work toward realizing such price reductions through various overseas initia-

more, in the event that a serious issue with the potential of impacting corpo-

tives. Also, I feel the role Tokyo Gas must play in the present operating envi-

rate value were to occur, it is of course important for the company to takeronment is extremely important, as many believe that the future of energy will

steps to resolve this issue, but it is also equally important to quickly disclose

be centered on natural gas. Still, Tokyo Gas must be prudent in monitoring

the issue to the public. In fulfilling my duty as an outside auditor, I will pay

the rapidly diversifying range of risks as it undertakes the challenges that will

particular attention to promoting such levels of transparency, which I believe

allow it to live up to the expectations of its shareholders. Moreover, Tokyo Gas

are necessary in realizing sustainable growth.

Executive Officers
President
Executive Vice Presidents
Senior Executive Officers

Executive Officers

Tsuyoshi Okamoto
Shigeru MurakiMichiaki Hirose
Tsutomu Oya
Mikio Itazawa
Kazuo Yoshino
Matsuhiko Hataba
Koichi Aonuma
Yutaka Kunigo
Masahiro Mikami
Hideaki Obana
Hiroaki Kobayashi
Takashi Uchida
Satoru Yasuoka
Hiroaki Kubota
Hidefumi Takahashi
Yoshihiro Tanabe
Fumio Murazeki
Hideaki Arai
Masaru Takamatsu
Michiharu Takahashi
Fumihiko Hara
Kiyotada Den
Takahiro Saito

Chief Executive of Energy Solution Div., General Manager of Volume Sales Dept. of Energy Solution Div.
Chief Executive of Residential Sales Promotion Div.
Chief Executive of Energy Production Div
Chief Executive of Pipeline Network Div.
Chief Executive of Information Technology Div., in charge of Finance Dept., and Accounting Dept.
In charge of Corporate Planning Dept., TG-Group Reorganization Project Dept., and Affiliated Companies Dept.
Chief Executive of Housing Development Div.
Chief Executive of Energy Resources Div.
In charge of General Administration Dept., Corporate Communications Dept., and Environmental Affairs Dept.
In charge of Purchasing Dept., Real Estate Management Dept., and Major Site Development Dept.
Chief Executive of Technology Development Div.
In charge of Personnel Dept., Secretary Dept., Compliance Dept., and Internal Audit Dept.
Chief Executive of Regional Development Marketing Div.
General Manager of Information Technology Application Dept., Information Technology Div.
General Manager of Sales Marketing I Dept., Housing Development Div.
Dispatched to the Japan Gas Association
General Manager of Residential Sales Planning Dept., Residential Sales Promotion Div.
General Manager of Pipeline Dept., Pipeline Network Div.
General Manager of Corporate Planning Dept.
Coordinator of Energy Solution Div.
General Manager of LIFEVAL Project Management Dept., Residential Sales Promotion Div.
General Manager of Personnel Dept.
General Manager of Facility Engineering Business Dept.

39