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 organization andframework 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: http://www.jsw.co.jp/en/guide/governance.html

Overview of Corporate Governance
Structure
We employ a audit & supervisor board member systemcomprising nine directors, two of whom are independent, and four audit & supervisory board members, twoof whom are external.
The term of office of directors is one year. We maintain an executive officer system: separate decision-making and oversight from the executive functions ofexecutive officers. The goal is to accelerate decision-making and enhance oversight and execution.
In principle, the Board of Directors convenes once
monthly to decide and report on basic operational policies, legally stipulated matters, and other important management issues. Managing executive officers and above
attend these meetings, positioning the Board as a vehicle
for mutual oversight of directors and executive officers.
The Executive Board—consisting of two representative directors and other directors with executive responsibilities nominated by the president, two outside directors,
and an audit & supervisory board member (chosen byrotation)—meets once a week to deliberate and decide on
important management matters and important businessexecution decisions made by directors and executive officers. The Strategy Council also discusses, reports on, andmonitors overall operational matters.
Our Management Council also convenes once
monthly, in principle. Members include directors, audit &supervisory board members, divisional heads, generalplant managers, headquarters managers, and otherswith executive responsibilities. This body’s tasks include
assessing the business environment and monitoring the16progress of the Company’s business plan. Its goals are toshare such knowledge throughout management andreflect it in their decisions as well as to ensure risk management and compliance.
The Audit & Supervisory Board comprises four audit &supervisory board members, two of whom are external as
part-time. These members attend meetings of the Boardof Directors, the Executive Board, the Management Council, and other important gatherings. In principle, they visit
the Company’s plants and offices and major subsidiaries
once every six months. The members receive divisional
reports as necessary and exchange opinions with directors and key employees. Based on these efforts, the members express their views to management from an objective
and neutral perspective, and exercise strict oversight withregard to the execution of directors’ duties.
Seeking to ensure fairness and transparency of decision-making processes related to executive nomination
and remuneration, the Company established the Nomination Advisory Committee and the Remuneration Advisory Committee. Consisting of five members, including
several outside executives, the committees serve as advisory bodies to the Board of Directors.

Status of Internal Control SystemThe Company recognizes the importance of its management responsibilities with respect to establishing andproperly managing the necessary systems to ensure
appropriate business operations. Based on this recognition, it has set up a specialist unit to supervise internalcontrols, and its Internal Control Committee also meets

Cor porate G ove r n an ce

as necessary. The Company is working to improve its
internal control system in line with its Basic Policy on
Internal Control Systems, adopted by the Board of Directors, as described below.
1.	Adhering to laws and regulations and the Articlesof Incorporation relating to the execution of duties
by directors and employees•	At the Company, compliance extends beyond preventing fraud and adhering to laws and regulations
and in-house rules. It also encompasses the fulfillment of broad social responsibilities and establishment of various compliance-related rules. The
essence of its compliance activities centers on directors and executive officers taking the lead and practicing integrity and raising employee awareness ofcompliance issues through education and training.
•	The Company established the Internal Auditors Offices
to ensure that all of its corporate operations complywith all laws and regulations and in-house rules. TheDivision conducts regular and spot audits and submits
the results of its audits to the president and to otherrelevant parties as appropriate, including the Board ofDirectors, the Executive Board, the Management Council, and audit & supervisory board members.
•	The Company has created multiple ways, includinginternal and external channels, for reporting and discussing compliance-related problems uncovered byemployees, based on a guarantee of protection forwhistleblowers.
• The Company clearly stipulates in its Corporate codeof behavior the thorough enforcement of organizational crisis management against anti-social forces,
and firmly rejects unwarranted demands from themin accordance with the law and in collaboration withrelevant authorities.
2.	Safeguarding and managing information relating
to the execution of duties by directors•	The Company appoints a director or an executive officer as the person responsible for safeguarding andmanaging information. Adhering to document andinformation management rules and regulations, theCompany stores and manages important information
relating to the execution of duties by directors andexecutive officers as printed or digital records. This
information includes the minutes of important meetings and written requests for approvals. Further,
directors and audit & supervisory board members
may review or copy this information as needed.
•	The Company discloses financial and important management information in an appropriate and timelymanner.
3. Rules on managing risk of losses•	Directors, executive officers, and employees concurrently serving as general managers identify and evaluate risks arising in the course of business. They addressthese risks in keeping with regulations and the management approval system. The Board of Directors andthe Executive Board deliberate on key risks.
•	The Company maintains risk management rules anda Companywide risk management system. Divisions
overseeing risks in such areas as safety and hygiene,
environmental management, information security,and export safety controls set up committees andcreate and administer rules for properly managing
such risks throughout the Company. The Company
also appoints a director or an executive officer as theperson responsible for risk management. In collaboration with the Internal Audit Division, that person
monitors the progress of risk management andreports to the Board of Directors or the Executive
Board as appropriate.
•	At all divisional headquarters, business units, andplants, the Company has risk managers who evaluate
measures and identify daily risks. It also has a crisis
management headquarters to handle critical situations. Accordingly, the Company is prepared for bothordinary and emergency situations.

174. Ensuring the efficient execution of duties by directors•	The Company ensures rapid decision-making andflexible and efficient business execution by having
the president act as chief executive officer, with directors overseeing key headquarters divisions and business units. Under this command and management
structure, executive officers appointed by the Boardof Directors perform the duties assigned to them.
Directors and executive officers deliberate, decide,and report on important matters in meetings of theBoard of Directors and the Executive Board.
•	The Board of Directors formulates the medium-term
management plan and annual business plans as Companywide objectives for directors, executive officers,and employees. Directors and executive officers planand implement specific policies for reaching goals,
segregating tasks in line with in-house rules. They also
evaluate the results, review progress, and submit periodic and spot reports to the Board of Directors, theExecutive Board, and the Management Council.
5. Ensuring appropriate conduct at Group companies•	The Company encourages Group subsidiaries to workto establish and build Companywide internal controls
according to JSW’s Vision, Management Philosophy,and Corporate code of behavior. The Company also
supports Group subsidiaries to strive for efficientbusiness execution and autonomous management
by ensuring proper division of duties and clarificationof decision-making authority based on their ownin-house rules.
•	The Company has formulated operational and management rules for subsidiaries and defined therelated management responsibilities and leadership
structures. The Company maintains a system forreporting, notifying, and gathering information
about subsidiary decisions on important matters andimportant facts.
•	In addition to dispatching directors and audit &supervisory board members to Group subsidiaries,

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the Company ensures that subsidiaries comply withall laws and regulations and in-house rules by mandating periodic and spot internal audits through relevant departments or the Internal Audit Division. It
also audits operations directly and instructs subsidiaries on internal control improvements.
•	The Company supports the efforts of Group subsidiaries to establish systems to identify and evaluate risks
according to division of duties determined inde­pendently
based on rules concerning risk management.
6.	
Appointing audit & supervisory board member
assistants, securing their independence from directors, and ensuring the effectiveness of instructions
given to them•	On request from audit & supervisory board members,the Company offers employees as assistants. The
Company seeks the opinions and consent of thesemembers for appointments, dismissals, evaluations,and other personnel treatment regarding these assistants to secure their independence from directors
and executive officers.
•	The Company ensures that employees assigned asassistants can perform their duties according to thedirections and instructions of audit & supervisoryboard members.
7.	Reporting to audit & supervisory board membersby directors and employees and preventing unfavorable treatment based on its content•	Audit & supervisory board members are guaranteed
the opportunity to attend meetings of the Board ofDirectors, the Executive Board, the ManagementCouncil, and other managerial meetings that deliberate, decide, and report on important matters.
•	Based on its management approval system, the Company presents approval records to audit & supervisoryboard members. Audit & supervisory board members
can at any time request reports from directors, executive
officers, and employees of the Company and Groupsubsidiaries. Also, persons who have received reports

Cor porate G ove r n an cefrom directors, executive officers, and employees of theCompany and Group subsidiaries can convey suchreports to audit & supervisory board members.
•	The Company guarantees that persons making
reports to audit & supervisory board members are
not subject to unfavorable treatment based on thecontent of such reports.

Policy Regarding Large-Scale Purchaseof Company Shares
At the meeting of the Board of Directors held on May 15,
2017, the Company decided to update the “Measuresagainst Large-Scale Share Acquisitions (takeover defensemeasures), which was then approved at the 91st Annual
General Meeting of Shareholders on June 27, 2017.

8.	Policies on advance payment and compensation
pertaining to costs and obligations incurred in theexecution of duties by audit & supervisory boardmembers•	The Company assumes responsibility for any necessary costs incurred in the execution of duties by audit& supervisory board members.
9.	Ensuring the effectiveness of audits conducted byaudit & supervisory board members•	The Company encourages directors, executive officers, and employees to recognize the importance andvalue of audits conducted by audit & supervisoryboard members and to accord them their fullest
cooperation. These members can request assistancefrom the Internal Audit Division, other headquarters
divisions, and all other divisions for auditing tasks.
•	The Company enables audit & supervisory board
members to collaborate closely with the accounting
auditor and the Internal Audit Division.
•	Audit & supervisory board members have the discretion to employ the services of legal advisors andother outside experts.
10. Ensuring reliable financial reporting•	The Company evaluates the effectiveness of internal
controls for financial reports in keeping with basic
policies for such controls. The Board of Directors andthe Executive Board deliberate and report on thefindings of such evaluations.

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