Governance

Corporate Governance

ISO:6.2.3 Decision-making processes and structures
GRI:G4-34, G4-35, G4-38, G4-39

Corporate Governance and Internal Controls

Corporate Governance

In Taisei Corporation, the Board of Directors (including 2 external directors) has introduced a system of Executive Officers, and various director committees have been established in order that the Board of Directors can devote itself to important management decision making and supervision of execution of operations.
Also, the Audit Committee (including 3 external auditors), which is independent of the Board of Directors and the operating divisions, works in close liaison with accounting auditors and the in-house Auditing Department to implement highly independent and effective audits and strengthen the group-wide audit system.

Governance system

Governance system

Under the principles of the Taisei Group Ideal and the Taisei Spirit, Taisei Corporation has established a basic policy for corporate governance with the goal of ensuring sustainable growth and boosting corporate value in the medium and long term.

Promotion of Internal Controls

In Taisei Corporation as a group, the Board of Directors has established a "Basic Policy for Development of a System for Ensuring Appropriate Working", upon which various measures have been taken, in order to ensure reliability of the systems of appropriately and efficiently executing work and financial reporting.
In April 2015, the policy regarding development of a "System for Ensuring Appropriate Working in the whole group" and "System for ensuring effective performance of audits by auditors" was further elaborated based on the amendment of the Companies Act, which is to come into force in June of that year.
Through this, risk management and compliance will be further promoted.
Also, internal controls on financial reporting based on the Financial Instruments and Exchange Act are recognized to be one of the most important issues for the company, and internal controls have been constructed in order to ensure reliability of financial information disclosed to the public.
The effectiveness of the internal controls is evaluated by the Audit Department and checked by auditing carried out by KPMG Azsa LLC audit company.
The evaluation results are presented in the "Internal Controls Report", and the audit results in the "Internal Controls Audit Report".
In the future we will ensure the effectiveness of these internal controls, thereby fulfilling our social responsibility as a company.

Management System

ISO:6.2.3 Decision-making processes and structures
GRI:G4-34, G4-35, G4-38, G4-51

Taisei Corporation has appointed several external Members of the Board in order to obtain advice based on different viewpoints. Also, the Board of Directors has introduced a system of Executive Officers with the aim of separating the management decision making and supervision function and the execution of operations function. The Executive Officers promote the dynamic execution of operations for which they are responsible, based on the fundamental policy adopted by the Board of Directors.
In addition, Board of Director Committees (Director Personnel Committee, Remuneration Committee, Associated Companies Committee, CSR Committee, etc.) have been established as prior deliberation organizations of the Board of Directors, in order to ensure vigorous and substantial deliberation by the Board of Directors.

Audit system

In Taisei Corporation, the Audit & Supervisory Board Members, accounting auditors, and the Auditing Department work together to implement appropriate audits.
The Corporate Auditors audit the execution of operations as an organization independent of the Board of Directors in accordance with an Audit Policy established by the Audit and Supervisory Board. The Auditing Department has been established with the same high level of independence to provide advice to the Corporate Auditors.
Also, the Auditing Department performs internal audits on the legal compliance and efficiency of systems and operations based on an annual auditing plan that includes group companies.
The Auditing Department and the accounting auditors constantly report to the Audit and Supervisory Board and the Internal Controls Department of the Accounting Departments regarding the audit plan and the audit results.

Companywide Initiatives

In order to further enhance corporate governance, Taisei Corporation has appointed 5 external directors (external Members of the Board and external Audit & Supervisory Board Members). All 5 Officers satisfy the criteria of independence established by the Stock Exchanges, and have been notified as independent Officers based on the securities listing regulations of the Tokyo Stock Exchange.

Governance system

Governance system

Amounts of Remuneration and Others Paid to Members of the Board and Audit & Supervisory Board Members

Amounts of Remuneration and Others Paid to Members of the Board and Audit & Supervisory Board Members

Spreading and Consolidating the Taisei Group Ideal

In 2010 Taisei Corporation re-constructed the system of group ideals, and instituted various measures to ensure their propagation and establishment.
In FY 2014 e-learning was implemented once for employees, which had the effect of propagating and establishing the system of group ideals (including improving the corporate value and initiatives for corporate governance). These measures will be continued in the future with the target of 100% participation in the e-learning in order to further propagate and establish the system of group ideals.

Rate of Implementation of e-learning Regarding the Taisei Group Ideal

87.9%

Risk Management

ISO:6.2.3 Decision-making processes and structures

Risk Management Policy and System

With the objective of stable and continuous growth by fulfilling our social responsibilities as a company, Taisei has established and operates a company-wide risk management system for managing risk in our business activities. This entails identifying the risks involved in our business activities, classifying those risks by their degree of severity as "company-wide risks," "risks under division control," etc., and clarifying those responsible for managing these risks.
In particular in the case of "company-wide risks" that could have a serious effect on business management, we practice effective risk management throughout the company by centralizing information in the CRO Secretariat and sharing information with the Risk Management Committee and Risk Management Council.

System for the Promotion of Company-wide Risk Management

System for the Promotion of Company-wide Risk Management

Initiative for BCP (Business Continuity Plan)

To fulfill our social responsibilities as a general constructor that provides infrastructure for socioeconomic activities, Taisei has established a policy and rules concerning business continuity plan (BCP*2) in anticipation of large scale disasters such as an earthquake.
Also, based on this policy and rules, "large-scale disaster countermeasure training" is implemented at least once per year based on the BCP in order to confirm the specific response systems for customer support, postulating large scale disasters that are currently envisaged.
These initiatives are aimed at enabling continuity of functions that are important for business activities, maintaining and restoring the value of various construction assets, and contributing to the business continuity of central and local government, companies, etc.

* 2 BCP: Business Continuity Plan

FY 2014 large-scale disaster training

FY 2014 large-scale disaster training

Initiative for BCP (Business Continuity Plan)

In the FY 2014 "large-scale disaster countermeasure training", training was implemented focused on initial personnel, supplies, and infrastructure, based on postulated damage published by the Central Government or Local Governments. The effectiveness of the company's Business Continuity Plan (BCP) under severe conditions was verified, and the "100% participation in the large-scale disaster countermeasures training" target of the KPI was achieved.
In the future we intend to continue to achieve the "100% participation in the large-scale disaster countermeasures training" target of the KPI, and continue to implement training to improve the effectiveness of the Business Continuity Plan in the company as a whole.

Rate of Participation in Training for Large Scale Disasters

100%

Stakeholder Engagement

ISO:6.2.3 Decision-making processes and structures
GRI:G4-24, G4-26

Dialog with Stakeholders

Taisei Corporation aims to achieve communication with a wide range of stakeholders through dialog. Every year since 2002 various dialogs have been held with the objective of reviewing our business activities, and the results are published on the CSR website. The main examples are FY 2014 in as follows.

TOPICS

-Stakeholder Dialogue(1)
Taisei Corporation Aims to Achieve Growth via CSR Procurement

On Wednesday, March 4, 2015, a meeting revolving around the theme of "Future Initiatives in CSR Procurement" was held at Shinjuku Center Building, where the Head Office of Taisei Corporation is located.
Two external CSR experts were invited for an opinion exchange with members of Taisei Corporation's CSR Procurement Committee, who are in charge of promoting CSR procurement at the company.

Outside Experts

KEIICHI USHIJIMA

KEIICHI USHIJIMA

Japan CCaSS Leader, Managing Director. Climate Change and Sustainability Services (CCaSS).Ernst & Young Japan

  MITSUO OGAWA

Facilitator

MITSUO OGAWA

President of Craig Consulting

Taisei Corporation Participants

SHIGERU SAWARAGI

Acting General Manager, Building Construction Dept., Building Construction Div.

NOBUHIKO TAKAYAMA

Chief Manager, Project Management Sect.,Civil Engineering Dept, Civil Engineering Div.

OSAMU KOBAYASHI

Chief Manager, Corporate Communication Dept., CSR Promotion Sect.

ATSUSHI SUZUKI

Acting General Manager, Mechanical & Electrical Div.

SHUSEI MASAKI

General Manager, Planning & Administration Dept., Procurement Div.

Taisei Corporation's CSR Procurement —Background and Status of Implementation—

In accordance with Taisei Group's ideal "To Create a Vibrant Environment for All Members of Society", Taisei Corporation positions CSR as an important pillar of its business activities, and promotes CSR initiatives actively.
Based on the "Procurement Policy" adopted in 2013, Taisei Corporation is making progress in CSR procurement together with its business partners along the supply chain.
In addition, from the same year, they began monitoring member companies (first tier suppliers) of "Souyu-kai", the company's business partner. They monitor their CSR activities based on ISO 26000 (international standard for guidance on corporate social responsibility).
They include input from international CSR standards and examine the issues they have to tackle in detail. The status of implementation is shown on the right.

TOPICS

-Stakeholder Dialogue(2)
Future Session "The Future of Resilience" Held in Sendai

The future session "The Future of Resilience" was held starting from March 2014 undertaking the challenge of creating a form of resilient society and producing cooperative actions, through dialog with diverse and enthusiastic participants.
On 14th March 2015 "The Future of Resilience 6 in Sendai" was held as a public forum of the United Nations World Conference on Disaster Risk Reduction. A new vision of resilience and action plan have been brought to the world based on the results output from these activities to date.


Dialog with Stakeholders

In FY 2014 , we held the following 8 dialogs in relation to CSR:

  • "CSR procurement dialog" between influential persons in CSR and those responsible for procurement in the company;
  • "Training dialog in private companies for teachers" between teachers of public high schools, and Taisei Technology Center;
  • "dialog in Future Sessions" between various companies, groups, individuals, and the company's employees (4 times);
  • "Integrated Report Student Dialog" with university students; and ,''Empowerment of Women dialog'' with companies operating in Minato-ku.

We intend to continue holding these dialogs.

Number of dialogs

8times

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