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

Overview of Corporate
Governance Structure

plan. Its goals are to share suchcorporate officers.

knowledge throughout management

An Executive Board of threeand reflect it in their decisions as

We employ a statutory auditor sys-

representative directors and otherwell as to ensure risk management

tem comprising eight directors, one

president-designated directors

and compliance.

of whom is independent, and fourm e et s o n ce w e e k l y. T h e o t h e r

The Board of Corporate Auditors

statutory auditors (hereafter, “corpo-attendees are one outside director

comprises four corporate auditors,

rate auditors”), two of whom are

and one corporate auditor (chosen

two of whom are external (one serves

external.

by rotation). This gathering is tofull time). These auditors attend

The term of office of directors isdeliberate and decide on matters

meetings of the Board of Directors,

one year. We maintain a corporatethat are important for management

the Executive Board, the Management

officer system and separate deci-or the performances of directors andC o u n c i l , a n d o t h e r i m p o r ta n t

sion-making and oversight from thecorporate officers. Another function

gatherings. In principle, they visit theexecutive functions of corporate

is to discuss, report, and monitor

Company’s plants and offices andofficers. The goal is to accelerate

overall operational matters.

major subsidiaries once every six

Our Management Council alsomonths. The auditors receive

convenes once monthly, in principle.

divisional reports as necessary andIn principle, the Board of Direc-

Members include directors, corporate

exchange opinions with directors andtors convenes once monthly to decide

auditors, divisional heads, plant

key employees. Based on theseand report on important manage-general managers, headquarters

efforts, the auditors express theirment issues, including basic opera-managers, and others with executivev i e w s to m a n a ge m e n t f ro m a ntional policies and legally stipulated

responsibilities. This body’s tasks

objective and neutral perspective,

matters. Senior executive officers andinclude assessing the businessand exercise strict oversight witha b o v e a t t e n d t h e s e m e et i n g s ,environment and monitoring theregard to the execution of directors’

positioning the Board as a vehicle forprogress of the Company’s businessduties.

decision-making and enhance oversight and execution.

14

mutual oversight of directors andCorporate GovernanceInternal Control and Risk
Management Systems

laws and regulations and in-house

3. Safeguarding information

rules to encompass diverse rules forfulfilling broad social responsibilities.

The Company appoints a director orAn effective internal control system is

Our efforts center on directors andc o r p o r a t e o ff i c e r t o o v e r s e evital for business performance. We

corporate officers taking the lead in

information safeguards. In keeping

are therefore improving internal

practicing integrity and in raisingwith document and information

controls in line with our Basic Policy

employee awareness of compliancemanagement rules and regulations,on Internal Control Systems, whichi s s u e s t h ro u g h e d u ca t i o n a n d

the Company stores and manages

the Board of Directors adopted, andtraining.

important information relating to theour Regulations Regarding theWe established the Internal

work of directors and corporate

P ro m o t i o n o f I n te r n a l C o n t ro l

Audit Division to ensure thatofficers as printed or digital records.

Activities. We will address social

operations observe all laws andThis information includes thechanges and streamline our setup ofregulations and in-house rules. The

minutes of important meetings,

internal controls by reviewing ourdivision conducts scheduled andwritten requests for management

issues and responses.

spot audits. It submits reports on theapprovals, and other important

The points below delineate

results to the president and relevant

information. Further, directors andmanagement’s basic stance onparties. They may include the Board

corporate auditors may view or copy

internal controls.

of Directors, the Executive Board, thethis information as needed.

Management Council, and corporate

1. Implementation structure

auditors.
We created internal andThe Internal Control Committee setsexternal channels for reporting andup a specialist unit, which meets as

discussing compliance violations,necessar y, to super vise internala n d g u a ra n te e a n o n y m i t y a n dcontrols with the aim of streamlining

protection from reprisals.

our internal control system.

The Company properly discloses financial and important management information.

The Corporate Code of Conduct
opposes criminal behavior. We

2. Adhering to laws andmaintain an office to share relevant

regulations and the Articles

information and manage counter-of Incorporation

measures to help eliminate criminalelements.

At JSW, compliance extends beyond
preventing fraud and adhering to15

4. Risk management

5. Ensuring efficiency

6. Ensuring appropriate conduct
at Group companies

16

Directors, corporate officers, andWe ensure rapid decision-making

employees concurrently serving asand flexible and efficient manage-

We encourage subsidiaries to employ

general managers identify andment by having the president act as

our Vision, Management Philosophy

evaluate risks arising in the course ofchief executive officer, with directors

and Corporate Code of Conduct, andbusiness. They address these risks inoverseeing key headquarters

to create their own internal controls

keeping with regulations and thedivisions and business units. The

in keeping with our respect for their

management approval system. The

Board of Directors appoints andautonomy.

Board of Directors and the Executives u p e r v i s e s co r p o ra t e o ff i ce r s .

We drafted operational andBoard deliberate on key risks.

Directors and corporate officers

management rules for subsidiaries

We maintain risk management

discuss, decide, and report on

and defined the related manage-

rules and a Companywide risk man-important matters in meetings of thement responsibilities and leadershipagement system. Divisions oversee-

Board of Directors and the Executivestructures. We maintain a system foring risks in such areas as safety andBoard.

reporting, notifying, and gathering

hygiene, environmental manage-

The Board of Directors formu-

data about subsidiary decisions on

ment, information security, andlates the medium-term management

important matters. At the same time,

export controls set up committees

plan and annual business plans as

we ensure that listed subsidiaries

and create and administer rules for

Companywide objectives forretain a degree of management

containing such risks throughout thedirectors, corporate officers, andautonomy.

Company. A risk management direc-employees. Directors and corporate

W e d i s p a t c h o ff i c e r s a n d

tor or corporate officer monitors

officers produce and implementemployees as directors and corpo-progress in collaboration with thespecific policies for reaching goals,

rate auditors of Group subsidiaries.

Internal Audit Division and reports tos e g r e g a t i n g ta s k s i n l i n e w i t h

We ensure that subsidiaries comply

the Board of Directors or the Execu-

in-house regulations. They alsowith all laws and regulations andtive Board.

review progress and submit periodic

in-house rules by mandating sched-

Risk managers at all divisionaland spot reports to the Board ofuled and spot internal auditsheadquarters, business units, andDirectors, the Executive Board, andthrough relevant departments or thep l a n t s e va l u a te m ea s u re s a n d

the Management Council.

Internal Audit Division. We also audit

identify daily risks. A crisis manage-

operations directly and instructment headquarters tackles emer-

subsidiaries on internal control

gency situations.

improvements.

Corporate Governance

7. Appointing corporate auditor
assistants and ensuring their

9. Ensuring corporate auditor
effectivenessindependence

Policy Regarding
Large-Scale Purchaseof Company Shares

We encourage directors, corporate
On request from corporate auditors,officers, and employees to value

On May 7, 2014, the Board of Direc-

we offer employees as assistants. We

corporate auditors and to accord

tors resolved to amend Measuresseek the opinions and consent ofthem their fullest cooperation. Theseagainst Large-Scale Share Acquisi-

these auditors for appointments,

auditors can seek assistance fromtions (takeover defense measures), a

dismissals, evaluations, and otherthe Internal Audit Division, otherset of rules and procedures for par-personnel treatment regarding theseheadquarters divisions, and all otherties seeking to purchase our sharesassistants to secure their indepen-

divisions for auditing tasks.

(namely, holders of Company-issued

dence from directors and corporate
officers.

8. System for directors andemployees to submit reports
to corporate auditors
As is their right, corporate auditors

We enable corporate auditors

shares seeking to increase their

to collaborate closely with thestakes to more than 20% throughaccounting auditor and the Internalpurchases, or those making a tender

Audit Division.

offer to boost their combined share-Corporate auditors have theholding ratio with the inclusion ofdiscretion to employ the services of

the holdings of special parties tolegal advisors and other outside

more than 20% through a tenderexperts.

offer). The amendment was approved

attend meetings of the Board ofDirectors, the Executive Board, theManagement Council, and otherat the 88th Regular General Meeting

10. Ensuring reliable financialof Shareholders on June 25, 2014.

reportingmanagerial meetings that discuss,
determine, and report on important

We evaluate the effectiveness ofmatters.

internal controls for financial reports

These auditors receive man-in keeping with basic policies. The

agement decision approval records,

Board of Directors and the Executiveand may request reports from direc-

Board discuss the findings.

tors, corporate officers, or employees
whenever necessary.

17