Basic Views on Corporate Governance
To implement measures envisaged under the Long-Term Management Vision 2030 and the Medium-Term Management Plan 2020, both formulated in March 2017 and together called “Going Forward Beyond Borders,” Osaka Gas will ensure transparency, fairness and boldness in decision making, and execute its assigned business duties efficiently and adequately, based on the Osaka Gas Group CSR Charter, a set of guiding principles for employees, and specific standards for actions—the Osaka Gas Group Code of Conduct and the Osaka Gas Group Environmental Activities Policy. By doing so, the Company aims to attain sustainable growth and enhance its corporate value on a medium- and long-term basis. The Company aims to maintain its trust from stakeholders in response to shareholders' moves to exercise their rights and by promoting dialogue and collaboration with them. To further enhance its CSR levels, the Osaka Gas Group will continuously improve and strengthen the current corporate governance system.
System and Efforts Aimed at Enhancing Corporate Governance
Osaka Gas has chosen to be a company that adopts a corporate auditor system. The Company has also adopted an executive officer system. The Company's corporate governance system is shown below.
Board of Directors, Directors of the Company
The Board of Directors consist of 13 Directors, including three Outside Directors. Its mission is to make swift and appropriate decisions concerning important matters that affect the Group as a whole including subsidiaries, and reinforce the supervisory capability. In fiscal 2017, the Board of Directors met a total of 13 times, with the attendance rate reaching an average of 99.4%. Sufficient time was allocated to discussing the matters tabled for the meetings and active discussions were conducted.
Osaka Gas has adopted an executive officer system, which is aimed at revitalizing the activities of the Board of Directors, and enhancing its supervisory function while increasing the Company's management efficiency, by enabling Directors to focus on decision-making, and supervisory duties. Under the executive officer system, Executive Officers perform duties determined by the Board of Directors, while some Representative Directors and Directors concurrently serve as executive officers to make management decision-making more accurate and efficient.
Osaka Gas makes decisions on important matters concerning basic management policies and other management issues after the Executive Board fully discusses these matters. In line with the in-house rules related to the Executive Board, the Board is composed of the President, Vice Presidents, Managing Directors, Heads of HQ and Business Units, and generally meets every week. In principle, meetings held by the Executive Boards each year include three meetings held as the CSR Promotion Council, which deliberates on CSR-related activity plans and reports on results of the activities.
Board of Corporate Auditors, Auditors
The Board of Corporate Auditors consists of five Auditors, including three Outside Auditors. These Auditors audit the execution of duties assigned to each Director.
Osaka Gas has established the Auditing Department as a section in charge of internal auditing affairs. Based on a yearly auditing plan, the Department evaluates, from independent and neutral viewpoints, the adequacy of business activities in light of in-house standards, their efficiency, and the appropriateness of various systems and standards adopted by the Company. If problems related to auditing are found in certain departments or divisions, the Auditing Department proposes improvement and follow-up measures for the affected organizations, and reports the findings to the Executive Board. The Auditing Department is subject to periodical evaluation from an outside party to maintain and improve its auditing abilities.
From the viewpoint of ensuring objectivity and transparency in decision-making, matters relating to the nomination of Directors and Auditors, and remuneration paid to Directors are determined following deliberation by voluntary Advisory Committee, the majority of whose members are Outside Directors.
The CSR Committee is chaired by the CSR Executive, a Director in charge of controlling CSR activities of the Osaka Gas Group, with its members chosen from among the Heads of relevant divisions and departments. The CSR Committee promotes CSR activities in such fields as the environment, compliance, social contribution, human rights, employment, information security and risk management, and plays a coordinating role between relevant departments or divisions regarding these activities.
Investment Evaluation Committee
The Investment Evaluation Committee is chaired by the Head of the Corporate Planning Headquarters (HQ), with its members chosen from among the Heads of relevant divisions and departments. The committee evaluates investment risks and returns for investment projects of a certain scale. The evaluation, put forward to the Executive Board, is used for appropriate investment decision.
Roles and Functions of Outside Directors
As a member of the Board of Directors, an Outside Director takes part in the Company's decision-making process, and monitors and supervises whether the Executive Officers have executed their business duties appropriately, based on his or her knowledge and experience, and from an independent viewpoint.
Efforts to Strengthen the Functions of Auditors
As part of its efforts to strengthen the functions of Auditors, Osaka Gas appoints three Outside Auditors, whose role is to audit if Directors have executed their duties appropriately—from an independent viewpoint. The Auditors meet on a regular basis to discuss annual audit plans and audit reports, and exchange information to ensure the effectiveness of auditing activities and enhance their quality. Osaka Gas has established the Corporate Auditors' Office, which is composed of full-time staff operating outside the Executive Officers' chain of command. The Office is designed to strengthen the auditing function of Auditors by supporting them in executing their business duties.
Corporate Governance System (as of the end of a regular general shareholders meeting held on June 29, 2017)
- *1 Board of Directors:
- 13 Directors (10 in-house Directors and three Outside Directors)
- Three Outside Directors, three Outside Auditors, President and persons appointed by the President (up to two persons chosen from among other Representative Directors)
- Five Auditors (two in-house standing Auditors and three Outside Auditors)
- President, three Vice Presidents and eight Senior Executive Of¬cers（★In principle, three meetings are held as the “CSR Promotion Council.”）
TOPIC: External Evaluation Conducted to Improve the Quality of Internal Audits
Osaka Gas underwent external evaluation from a third-party institution in August 2016 as part of its efforts to further improve the quality of its internal audits. In the evaluation, which involved the analysis of audit-related documents and interviews with members of the Auditing Department, internal audits carried out by the Company were recognized as meeting international standards. Specific proposals were also put forward to Osaka Gas regarding how to make its internal audits more effective and efficient. The Company will continue to improve the quality of its internal audits in the future as a way of reviewing the overall business operations of the Osaka Gas Group and improving its service quality.