Co r p o r a te G ove r n a n ce

Corporate Governance
JSW recognizes that it must earn the trust of shareholders, customers, employees, and other stakeholders to aim to enhance enterprise value and thereby contribute to the economy and society as a whole.
We therefore created a corporate governance setup that encompasses a management organizationand framework to implement essential measures and pursues fair disclosure to ensure business
transparency.
On November 18, 2015, we formulated “Corporate Governance Policy of The Japan Steel Works, Ltd.”
based on a resolution of the Board of Directors. The aim of the Policy is to clarify our basic stance, initiatives, and approach with respect to corporate governance. The Policy can be found at the following
website: https://www.jsw.co.jp/en/ir/governance.html

Overview of Corporate Governance
Structure

supervisory board members, divisional heads, generalplant managers, headquarters managers, and executive

supervisory board members, and executive officers andreports to the Board of Directors. Likewise, the Remuneration Advisory Committee deliberates on matters related

environment and monitoring the progress of the Com-

comprising nine directors, two of whom are indepen-pany’s business plan. Its goals are to share such knowl-

dent, and four audit & supervisory board members, twoedge throughout management and reflect it in theirof whom are external.

decisions as well as to ensure risk management and

The term of office of directors is one year. We main-

Constituent members
Name

Title

Naotaka Miyauchi

Representative
Director &President

Yutaka Higashiizumi

Representative
Director &Executive Vice
President

Takashi Shibata

Director,
Managing
Executive Officer

Masao Oshita

Director,
Managing
Executive Officer

Toshio Matsuo

Director,
Managing
Executive Officer

Junichiro Deguchi

Director,
Managing
Executive Officer

Executive
Board

Management
Council(Chairman)(Chairman)(Chairman)

The Audit & Supervisory Board comprises four audit &ing and oversight from the executive functions ofsupervisory board members, two of whom are external

Takashi Iwamoto

Director,
Executive Officer

executive officers. The goal is to accelerate decision-mak-as part-time. These members attend meetings of the

Nobuo MochidaDirector(Note 1)

ing and enhance oversight and execution.

Board of Directors, the Executive Board, the Manage-(Notes 4)

Sadao Degawa

Director(Note 1)

(Notes 4)

Kenji Watanabe

Audit &
Supervisory Board
Members(full-time)(Notes 3 & 4)

Toru Nishiyama

Audit &
Supervisory Board
Members(full-time)(Notes 3 & 4)

Itaru Masuda

Audit &
Supervisory Board
Members(Note 2)

Fumihiko Yazawa

Audit &
Supervisory Board
Members(Note 2)

Toyohiko Kagawa

Managing
Executive Officer

Yoshitaka Sato

Executive Officer

Shingo Mito

Executive Officer

Hiroki Kikuchi

Executive Officer

Shigeki Inoue

Executive Officer

ment Council, and other important gatherings. In princi-

monthly to decide and report on basic operational poli-ple, they visit the Company’s plants and offices as well as

cies, legally stipulated matters, and other importantmajor subsidiaries once every six months. The members

management issues. Managing executive officers andreceive divisional reports as necessary and exchange

above attend these meetings, positioning the Board as aopinions with directors, executive officers, and key

vehicle for mutual oversight of directors and executive

employees. Based on these efforts, the members express

officers.

their views to management from an objective and neu-

The Executive Board—consisting of two representative directors, executive officers nominated by the presi-

tral perspective, and exercise strict oversight with regard
to the execution of directors’ duties.

dent, two outside directors, and an audit & supervisory

Seeking to ensure fairness and transparency of deci-board member (chosen by rotation)—meets once asion-making processes related to executive nomination

week to deliberate and decide on important manage-

and remuneration, the Company established the Nomi-

ment matters and important business execution deci-

nation Advisory Committee and the Remuneration Advi-

sions made by directors and executive officers in addition

sory Committee. Consisting of five members, including

to discussing, reporting on, and monitoring overall oper-

several outside executives, the committees serve as advi-

ational matters.

18

compliance.

Board ofDirectors

tain an executive officer system: separate decision-mak-In principle, the Board of Directors convenes oncesory bodies to the Board of Directors. The Nomination

Our Management Council also convenes once

Advisory Committee deliberates on matters related tomonthly, in principle. Members include directors, audit &appointment and dismissal of directors, audit &The constituent members of each entity are as
follows.

to renumeration of directors and executive officers andofficers. This body’s tasks include assessing the businessWe employ an audit & supervisor board member system

reports to the Board of Directors.

Other constituent members

Audit &
Supervisory
Board

Nomination
Advisory
Committee

Remuneration
Advisory
Committee(Chairman)(Chairman)(Chairman)(Notes 5)(Notes 5)(Notes 4)

Divisional heads,
deputy director ofheads, generalplant managers,
headquarters
managers

Notes: 1. Nobuo Mochida and Sadao Degawa are outside directors. 2. Itaru Masuda and Fumihiko Yazawa are outside audit & supervisory board members.
3. One audit & supervisory board member attends by rotation. 4. Attends as an observer. 5. Attends as an advisor.

19

Co r p o r a te G ove r n a n ce

as expressing opinions to management from an objec-

Reason for Adopting the Corporate
Governance Structure

Status of Internal Control System System

tive and neutral perspective.
In addition to attending aforementioned importantof Behavior the thorough enforcement of organiza-

Each director reports on the business execution status atmeetings as well as other meetings, each audit & super-

The Company recognizes the importance of its manage-

tional crisis management against anti-social forces,

important meetings of the Board of Directors, the Execu-

visory board member conducts audits of headquarters

ment responsibilities with respect to establishing andand firmly rejects unwarranted demands from themtive Board, the Management Council, and other bodies,

divisions, business divisions, subsidiaries, and otherproperly managing the necessary systems to ensurein accordance with the law and in collaboration withwhich ensures mutual oversight of directors. Ten execu-

organizations on a regular basis. When deemed neces-appropriate business operations. Based on this recogni-

relevant authorities.

tive officers, five of which concurrently serve as directors,sary, they receive reports on information related to risktion, it has set up a specialist unit to supervise internal

are appointed at the meeting of the Board of Directors.

management, compliance, and other matters fromcontrols, and its Internal Control Committee also meets

They execute business operations and make business-re-respective departments. By exchanging opinions withas necessary. The Company is working to improve its

lated decisions to the extent delegated, and report on

directors, executive officers, and key employees, theyinternal control system in line with its Basic Policy ont 5IF$PNQBOZBQQPJOUTBEJSFDUPSPSBOFYFDVUJWFPó-

the business execution status at meetings of the above-

keep tabs on the business execution status of directors

Internal Control Systems, adopted by the Board of Direc-

cer as the person responsible for safeguarding andmentioned Executive Board, Management Council, andand express opinions to management from an objective

tors, as described below.

managing information. Adhering to document andother bodies, thereby ensuring oversight of executive

and neutral perspective.

2. Safeguarding and managing information relating
to the execution of duties by directors

information management rules and regulations, theofficers by directors. Outside directors also attend each

The Company believes these measures ensure the

1. Adhering to laws and regulations and the Articles

Company stores and manages important informationof important meetings mentioned above, participating

current corporate governance structure to fully exert theof Incorporation relating to the execution of duties

relating to the execution of duties by directors andin the decision-making process of management as welloversight function over management.

by directors and employees

executive officers as printed or digital records. This

Shareholders’ meetings

Board of Directors

Audit & Supervisory Board
Monitoring

Executive Directors
Outside directors

Decisionmaking

ReportingAccounting
auditors

Audit & supervisory board members
Cooperation

Outside audit & supervisory board members

Oversight/
monitoring

Nomination Advisory Committee

Cooperation

Monitoring

Monitoring

Cooperation

Executive Board

Information Security
Committee

Business execution organizations
Headquarters divisions
Business divisions
Plants
Subsidiaries

General Safety andHygiene Council

Directors with business execution responsibilities/executive officers

Export Control Administration
Committee

Management Council

Environmental Management
Committee

Internal Auditors OfficeInternal Control Committee

Presidentt "U UIF $PNQBOZ  DPNQMJBODF FYUFOET CFZPOE QSF-

information includes the minutes of important meet-venting fraud and adhering to laws and regulations

ings and written requests for approvals. Further,and in-house rules. It also encompasses the fulfill-

directors and audit & supervisory board members

ment of broad social responsibilities and establish-

may review or copy this information as needed.

ment of various compliance-related rules. Thet 5IF$PNQBOZEJTDMPTFTöOBODJBMBOEJNQPSUBOUNBO-

essence of its compliance activities centers on direc-

agement information in an appropriate and timely

tors and executive officers taking the lead and prac-manner.

ticing integrity and raising employee awareness ofcompliance issues through education and training.

Remuneration Advisory Committee<Business execution>

20

whistleblowers.
t 5IF$PNQBOZDMFBSMZTUJQVMBUFTJOJUT$PSQPSBUF$PEF

3. Rules on managing risk of lossest 5IF $PNQBOZ FTUBCMJTIFE UIF *OUFSOBM "VEJU %JWJTJPOt %JSFDUPST  FYFDVUJWF PóDFST  BOE FNQMPZFFT DPODVS-

to ensure that all of its corporate operations comply

rently serving as general managers identify and evalu-

with all laws and regulations and in-house rules. The

ate risks arising in the course of business. They address

Division conducts regular and spot audits and submits

these risks in keeping with regulations and the man-the results of its audits to the president and to otheragement approval system. The Board of Directors andrelevant parties as appropriate, including the Board of
Directors, the Executive Board, the Management Council, and audit & supervisory board members.

the Executive Board deliberate on key risks.
t 5IF$PNQBOZNBJOUBJOTSJTLNBOBHFNFOUSVMFTBOE
a Companywide risk management system. Divisions

t 5IF$PNQBOZFOTVSFTNVMUJQMFXBZT JODMVEJOHJOUFS-

overseeing risks in such areas as safety and hygiene,

nal and external channels, for reporting and discuss-environmental management, information security,

ing compliance-related problems uncovered byand export control administration set up committees

employees, based on a guarantee of protection forand create and administer rules for properly21

Co r p o r a te G ove r n a n cet 5IF$PNQBOZHVBSBOUFFTUIBUQFSTPOTNBLJOHSFQPSUT

managing such risks throughout the Company. The
Company also appoints a director or an executive

5. Ensuring appropriate conduct at Group companies

6. Appointing audit & supervisory board member

to audit & supervisory board members are not subject

officer as the person responsible for risk manage-

t 5IF$PNQBOZFODPVSBHFT(SPVQTVCTJEJBSJFTUPXPSL

assistants, securing their independence from direc-

to unfavorable treatment based on the content of suchment. In collaboration with the Internal Audit Divi-

to establish and build Companywide internal controls

tors, and ensuring the effectiveness of instructions

reports.

sion, that person monitors the progress of risk

according to JSW’s Vision, Management Philosophy,

given to them

management and reports to the Board of Directors or

and Corporate Code of Behavior. The Company alsot 0OSFRVFTUGSPNBVEJUTVQFSWJTPSZCPBSENFNCFST 

8. Policies on advance payment and compensation

the Executive Board as appropriate.

supports Group subsidiaries to strive for efficient

the Company offers employees as assistants. The

pertaining to costs and obligations incurred in thet "ULFZIFBERVBSUFSTEJWJTJPOT CVTJOFTTEJWJTJPOT BOE

business execution and autonomous management

Company seeks the opinions and consent of these

execution of duties by audit & supervisory board

plants, the Company has risk managers who evaluate

by ensuring proper division of duties and clarification

members for appointments, dismissals, evaluations,

measures and identify daily risks. It also has a crisisof decision-making authority based on their own

and other personnel treatment regarding these assis-

t 5IF $PNQBOZ BTTVNFT SFTQPOTJCJMJUZ GPS BOZ OFDFT-

in-house rules.

tants to secure their independence from directors

sary costs incurred in the execution of duties by audit

and executive officers.

& supervisory board members.

management headquarters to handle critical situations. Accordingly, the Company is prepared for bothordinary and emergency situations.

t 5IF $PNQBOZ IBT GPSNVMBUFE PQFSBUJPOBM BOE NBOagement rules for subsidiaries and defined thet 5IF $PNQBOZ FOTVSFT UIBU FNQMPZFFT BTTJHOFE BT

related management responsibilities and leadershipassistants can perform their duties according to the

4. Ensuring the efficient execution of duties by directors

structures. The Company maintains a system fordirections and instructions of audit & supervisoryt 5IF $PNQBOZ FOTVSFT SBQJE EFDJTJPONBLJOH BOEreporting, notifying, and gathering information

board members.

flexible and efficient business execution by having

about subsidiary decisions on important matters andthe president act as chief executive officer, with direc-

important facts.

members

9. Ensuring the effectiveness of audits conducted byaudit & supervisory board members
t 5IF $PNQBOZ FODPVSBHFT EJSFDUPST  FYFDVUJWF Pócers, and employees to recognize the importance and7. Reporting to audit & supervisory board members

value of audits conducted by audit & supervisory

tors overseeing key headquarters divisions and busi-

t *O BEEJUJPO UP EJTQBUDIJOH EJSFDUPST BOE BVEJU 

by directors and employees of the Company and its

board members and to accord them their fullest

ness units. Under this command and management

supervisory board members to Group subsidiaries,

subsidiaries, other structures for reporting to audit

cooperation. These members can request assistancestructure, executive officers appointed by the Board

the Company ensures that subsidiaries comply with& supervisory board members, and preventing

from the Internal Audit Division, headquarters divi-of Directors perform the duties assigned to them.

all laws and regulations and in-house rules by man-unfavorable treatment based on the content of

Directors and executive officers deliberate, decide,dating periodic and spot internal audits through rele-

what is reported

and report on important matters in meetings of thevant departments or the Internal Audit Division. Itt "VEJUTVQFSWJTPSZCPBSENFNCFSTBSFHVBSBOUFFE

Board of Directors and the Executive Board.

also audits operations directly and instructs subsid-

the opportunity to attend meetings of the Board ofiaries on internal control improvements.

Directors, the Executive Board, the Management

t "VEJUTVQFSWJTPSZCPBSENFNCFSTIBWFUIFEJTDSF-

Council, and other managerial meetings that deliber-tion to employ the services of legal advisors andate, decide, and report on important matters.

other outside experts.

t 5IF #PBSE PG %JSFDUPST GPSNVMBUFT UIF NFEJVNUFSNmanagement plan and annual business plans as Com-t 5IF$PNQBOZTVQQPSUTUIFFòPSUTPG(SPVQTVCTJEJBS-

panywide objectives for directors, executive officers,

ies to establish systems to identify and evaluate risks

and employees. Directors and executive officers plan

according to division of duties determined indepen-

and implement specific policies for reaching goals,

dently based on rules concerning risk management.

sions, and all other divisions for auditing tasks.
t 5IF $PNQBOZ FOBCMFT BVEJU  TVQFSWJTPSZ CPBSE
members to collaborate closely with the accounting
auditor and the Internal Audit Division.

t #BTFE PO JUT NBOBHFNFOU BQQSPWBM TZTUFN  UIF $PNpany presents approval records to audit & supervisory

10. Ensuring reliable financial reporting

segregating tasks in line with in-house rules. They alsoboard members. Audit & supervisory board members

t 5IF$PNQBOZFWBMVBUFTUIFFòFDUJWFOFTTPGJOUFSOBM

evaluate the results, review progress, and submit peri-

can at any time request reports from directors, executive

controls for financial reports in keeping with basic

odic and spot reports to the Board of Directors, theofficers, and employees of the Company and Group

policies for such controls. The Board of Directors andExecutive Board, and the Management Council.

subsidiaries. Also, persons who have received reports

the Executive Board deliberate and report on thefrom directors, executive officers, and employees of thefindings of such evaluations.

Company and Group subsidiaries can convey suchreports to audit & supervisory board members.

22

23

Co r p o r a te G ove r n a n ce

Outline of Liability Limitation Agreement

Special Resolution Requirements of the
Meeting of Shareholders

In accordance with Article 427, Paragraph 1 of the Com-

The Articles of Incorporation stipulates that the resolu-

panies Act as well as Articles 28 and 36 of the Articles oftion stipulated by Article 309, Paragraph 2 of the Compa-

Incorporation, the Company has concluded a Liability

nies Act shall require the presence of shareholders

Limitation Agreement with two outside directors andholding one-third or more of the voting rights of share-four audit & supervisory board members as stipulated inholders who can exercise voting rights as well as a two-

Article 423, Paragraph 1 of the Companies Act. The liabil-thirds majority of such voting rights. The aim for the

ity limit based on this agreement shall be the amountrequirement is to smoothly lead the meeting of share-

stipulated in the act.

holders by relaxing the quorum for special resolutions at

Liability limitation will be applicable only when theshareholder meetings.

execution of duties by outside directors and audit &supervisory board members giving rise to such liabilities
is recognized to have been carried out in good faith andwith no gross negligence.

Number of Directors

Shareholder Meeting Resolutions
That Can Be Resolved at Meetings of theBoard of Directors
1. Acquisition of treasury stockt 5PFYFDVUFBøFYJCMFDBQJUBMQPMJDZ UIF"SUJDMFTPG*ODPS-The Articles of Incorporation stipulates the number ofporation allows the acquisition of treasury stock by adirectors to be 10 or less.

resolution of the Board of Directors in accordance with
Article 165, Paragraph 2 of the Companies Act.

Requirements for Resolution forElection of Directors

2. Interim dividends
t 5IF"SUJDMFTPG*ODPSQPSBUJPOTUJQVMBUFTUIFQBZNFOU

Board of Directors, Audit & Supervisory Board Members, and Executive Officers

Board of Directors

Audit & Supervisory Board Members
As of September 1, 2019

Representative Director &President

Naotaka Miyauchi

Representative Director &Executive Vice President

Yutaka Higashiizumi

Directors, Managing
Executive Officers

Takashi Shibata
Masao Oshita
Toshio Matsuo
Junichiro Deguchi

Directors, Executive Officers

Takashi Iwamoto

Directors

Nobuo Mochida (Outside)
Sadao Degawa (Outside)date by a resolution of the Board of Directors in accor-

tion for the election of directors shall require the pres-dance with Article 454, Paragraph 5 of the Companies

ence of shareholders holding one-third or more of theAct. The aim is to enable the swift return of profits tovoting rights of shareholders who can exercise voting

shareholders.

rights as well as a majority vote of such shareholders, andAudit & Supervisory Board
Members

Kenji Watanabe
Toru Nishiyama
Itaru Masuda (Outside)
Fumihiko Tanizawa (Outside)

Executive Officers
As of September 1, 2019

Managing Executive
Officer

Toyohiko Kagawa

Executive Officers

Yoshitaka Sato
Shingo Mito
Hiroki Kikuchi
Shigeki Inoue

Organization
General Meeting of Shareholders

of interim dividends with September 30 as the record
The Articles of Incorporation stipulates that the resolu-

As of September 1, 2019

Corporate Planning Office

Domestic Office

Office of Information Technology

Overseas Office

Board of Directors
Personnel Dept.
Executive Board

Secretary Office
General Affairs Dept.

President

Finance & Accounting Dept.

that no cumulative voting shall be accepted for the
resolution.

Internal Auditors Office

New Business Promotion Headquarters

Muroran Plant

Wind Power Business Office

Hiroshima Plant

Steel Business Division

Yokohama Plant

Audit＆Supervisory Board Members

Machinery Business Division
Injection Molding Machinery Business Division
FPD System Business Division
Ordnance Business Headquarters

24

25