We have positioned the corporate governance as one of our most important management issues.
Aiming to become a company that is able to earn the trust of all stakeholders, TOK positions enhancement of corporate governance as one of the most important management issues: the means to maintain a sound and transparent management and to enhance its operational efficiency by speeding up the decision-making process.
*Corporate governance: A generic term that describes a management supervision system designed to enhance management efficiency and enforce compliance and to promote stakeholders' interests by raising enterprise value.
Corporate Governance System
As a company with corporate auditors, TOK employs the corporate auditor system. We are taking actions to upgrade audits performed by the corporate auditors by using the greater authority of these auditors based on the Japanese Companies Act. In addition, TOK is using the benefits of reforms to its Board of Directors, establishment of the officer system, and the election of an independent outside director to fortify the management decision-making and supervisory function and the business execution function while clarifying responsibility for performing these functions. We are convinced that using these systems to strengthen management is the most effective means of upgrading corporate governance.
Directors and Board of Directors
The Board of Directors comprises eight directors, including two outside directors*. Their term of office is one year, which permits us to respond swiftly to changes in the business environment and clarify the responsibility of directors in each fiscal year. In addition, we elect two outside director with an independent status in order to enhance the transparency of the board and strengthen its supervisory function. The board, comprising of representative directors and directors, has an optimal structure in executing its required functions of managerial decision-making and supervision.
Officers and Committee of Officers
We have fourteen officers, including five officers concurrently serving as directors*. While strengthening the functions of the Board of Directors, i.e. managerial decision-making and supervision, the officers also focus on the function of business execution. In order to reinforce this function, we set up the Committee of Officers composing of the chief executive officer, chief operating officer, senior executive officer, executive officers, and officers, based on their respective duties and responsibilities.
Auditors and Board of Auditors
We have four auditors, including three outside auditors*. Each auditor is required to perform his/her duties allocated in accordance with the auditing standards (Corporate Auditor Auditing Regulations) and the auditing policies/ responsibilities stipulated by the Board of Auditors. These include: attending the meetings of the Board of Directors and the Committee of Officers as well as other important meetings; and supervising the performance of directors by receiving progress reports from the directors and others and requesting an explanation when necessary. They also supervise the appropriateness of audit methods and results performed by the accounting auditors by receiving their progress reports and requesting an explanation when necessary.
Internal Auditing Division
We have set up the Internal Auditing Division, under the direct control of the President. In addition to the standard audits of business operations, this division provides suggestions, proposals and advice for continuous improvements by undertaking evaluations of the effectiveness of internal controls on financial reporting.