Foundations for Sustainable Development
- Corporate Governance and Internal Controls
- Risk Management
- Stakeholder Dialog and Information Disclosure
- Stakeholder Engagement
Corporate Governance and Internal Controls
|ISO||6.2.3 Decision-making processes and structures|
Basic Policy for Governance and Management Systems
Taisei Corporation (the "Company") has established this Fundamental Corporate Governance Policy＊1 in order to achieve sustainable development and improvement in the mid- to long-term value of the Company and its subsidiaries and affiliates (collectively, the "Taisei Group") in accordance with the philosophy of the Taisei Group, being "to create a vibrant environment for all members of society" (the "Taisei Group Philosophy") and the so-called "Taisei Spirit", which embodies our commitment to "Active and Transparent Culture", "Value Creation" and "Evolution of Tradition."
In line with the basic policy, the Taisei Corporation's Board (including three External Members of the Board) gives its undivided attention to important management decisions and the supervision of corporate affairs. In addition, the Company has established several committees of the Board, and introduced a system of Executive Officers. In addition, the Audit & Supervisory Board (including four External Audit & Supervisory Board Members), operating independently of the Board and the operating divisions, works in close collaboration with the Accounting Auditors and Auditing Departments, the in-house Auditing Department, to implement independent and effective audits and to strengthen the auditing system across the whole Group.
1 Formulated in November 2015
Effectiveness of Board of Directors
In FY2016, Taisei Corporation conducted an evaluation of the effectiveness of the Board by means of self-evaluation by the Members of the Board and Audit & Supervisory Board Members, followed by deliberations by the Board with reference to an overall evaluation by the External Members of the Board and a third-party opinion from a lawyer.
The results of the evaluation indicated that the Board is functioning effectively overall, that proposals were accurately explained and deliberated, and that the comments of External Members of the Board and Audit & Supervisory Board Members were taken into account. A desire for discussion regarding the state of Group governance and medium- to long-term management strategy were among other opinions noted.
In light of this evaluation, the Company will work to further enhance the operations of the Board.
Ensuring Credibility of Financial Reporting
Internal controls on financial reporting based on the Financial Instruments and Exchange Act are recognized as one of the most important issues for a corporation. We have set up the internal systems including daily monitoring to ensure the credibility of the financial reporting disclosed to the public.
The effectiveness of the system is evaluated by the Audit Department and audited by KPMG AZSA LLC. The results are disclosed in the Internal Control Report and in the Audit Report of Internal Controls. We will fulfill our social responsibility as a corporation by continuing to ensure the effectiveness of these internal controls.
In order to continue to operate the internal control systems relating to financial reporting in a sound manner, we are also publishing messages from the President, implementing e-learning, and other campaigns to raise awareness among officers and employees.
Promotion of Internal Controls
At Taisei Corporation, the Board has established a "Basic Policy for Development of a System for Ensuring Appropriate Business Operations"＊2 to ensure the credibility of financial reporting and systems for conducting operations in an appropriate and efficient manner as a Group. Through these systems, we will deliver improved risk management and compliance.
The Company implemented a range of measures in FY2016, such as organizing two training sessions led by a lawyer on the topic of "Responsibilities and Roles of Executive Officers."
2 Formulated in May 2006. Final revision in April 2015.
Spreading and Consolidating the Taisei Group Philosophy
To spread and consolidate the Group Philosophy while connecting it to social demands and in-house initiatives, we have operated annual e-learning courses about the Group Philosophy since FY2011. In FY2016, after reconfirming the significance and composition of the Group Philosophy, we conducted a training course on the theme of the relationship between improvements in corporate value required by ESG investment and the Group Philosophy.
|Participation rate of training for the Taisei Group philosophy and policies||･･･96.3%|
General Meeting of Shareholders (held on June 29, 2017)
The Company shall endeavor to dispatch the convocation notice of its General Meeting of Shareholders at least three weeks prior to the scheduled date of such General Meeting of Shareholders in order to provide its shareholders time to sufficiently consider the agenda of such General Meeting of Shareholders and exercise their voting rights appropriately. In addition, prior to dispatching each notice, the Company shall announce electronically the information relevant to such General Meeting of Shareholders through the TDnet system and its official website.
Members of the Board / Board (convened 13 times in FY2016)
The Board, entrusted by the shareholders, shall pursue activities for the common benefit of the Company and its shareholders, and shall be responsible for maintaining an efficient and effective corporate governance structure to facilitate the growth of the Company in a sustainable manner and improve its corporate value in the mid- to long-term.
For the purpose of fulfilling the responsibility described in the preceding paragraph, the Board shall exercise its supervisory function of the Company's overall operating activities, thus ensuring appropriateness, fairness, and transparency for the management, and shall make decisions regarding the execution of material business decisions as provided for in the laws and regulations, the Articles of Incorporation, the Board Regulations, and the Application Standards for the Board Regulations of the Company.
Nomination of a prospective Member of the Board and election of an Executive Officer shall be determined by the Board after the completion of deliberations by the Executive Personnel Committee established within the Board.
At least two (2) of the Members of the Board shall be Independent External Members of the Board in order to ensure that the independent and objective oversight of the execution of the Board's operations may be effectively carried out.
Committees of the Board
For the purpose of expediting deliberations and decision-makings by the Board, the Company has established the following committees within the Board: 1) the Executive Personnel Committee responsible for deliberating on the personnel related matters of the Members of the Board and Executive Officers; 2) the Remuneration Committee responsible for deliberating on the remuneration of the Members of the Board and Executive Officers; 3) the Finance Committee responsible for deliberating on the potential acquisition and holding of significant assets; 4) the CSR Committee responsible for deliberating on matters to enhance the entire Group's CSR-based business management.
Audit & Supervisory Board Members / Audit & Supervisory Board (convened 14 times in FY2016)
As an entity independent of the Board and the Operating Divisions, and in accordance with the Audit Policy established by the Audit & Supervisory Board, the Audit & Supervisory Board Members audit the performance of the Member of the Board including attending the meetings of the Board and hearing of reports on business conditions from the Members of the Board.
The Audit & Supervisory Board Members and the Chief Executive Officer, the Auditing Department and the Accounting Auditors hold regular meetings to arrive at mutual understanding and to improve the effectiveness of the audits.
Audit & Supervisory Board Members' Department
In order to assist the Audit & Supervisory Board Members in the performance of their duties, the Audit & Supervisory Board Members' Department has been set up independently of the Board as a dedicated organization to support the Audit & Supervisory Board Members with the collection of appropriate information and other tasks.
Based on the annual auditing plan, the Auditing Department also conducts internal audits of administrative and management systems, as well as the legality and rationality of the management of corporate affairs at all in-house departments and Group companies.
The Accounting Auditors submit reports on the audit plan and the audit results to the Audit & Supervisory Board, the Accounting Department and other internal control departments as needed.
To ensure the external accounting auditors conduct fair and appropriate audits, the management of the Company, Audit & Supervisory Board Members and the Auditing Department shall have meetings on a regular and as-needed basis, and exchange their opinions with the external accounting auditors. Further, the Board shall respond appropriately if external accounting auditors detect dishonest practices and request that appropriate action be taken, or indicate errors or problems.
We have set up a range of operations committees including the Technology Committee, the Central Safety Committee, the Environment Committee, the Risk Management Committee, the Central Labor Affairs Committee, and the Overseas Business Strategy Committee to deliberate matters that involve consultations with the President.
We have set up the Compliance Committee chaired by an external expert as a Special Committee to respond to consultations with the President and we endeavor to reinforce the promotion of compliance.
Remuneration for Officers
Remuneration for the Members of the Board is determined from a comprehensive perspective that includes the scale, content, and performance of our business, as well as individual job specifications and responsibilities. Based on a resolution passed at the 146th Annual General Meeting of Shareholders on June 27, 2006, the sum total of monthly remuneration for the Members of the Board shall not exceed ¥70 million. Based on a resolution passed at the 134th Annual General Meeting of Shareholders on June 29, 1994, the sum total of monthly remuneration for Audit & Supervisory Board Members shall not exceed ¥12 million.
Further, where remuneration for the Members of the Board is concerned, the system of remuneration shall reflect performance and will be determined by the Board after deliberation by the Remuneration Committee, which carries out preliminary reviews ahead of board meetings, while remuneration for Audit & Supervisory Board Members shall be determined upon consultation with the Audit & Supervisory Board.
Amounts of Remuneration and Others Paid to Members of the Board and Audit & Supervisory Board Member
|Category||Total||External Members of the Board and External Audit & Supervisory Board Member|
|Number of Payees||Amount Paid||Number of Payees||Amount Paid|
|Member of the Board||10||582||2||26|
|Audit & Supervisory Board Member||6||108||4||45|
Appointment of External Officers
In order to improve corporate governance, Taisei Corporation appoints seven external officers (External Members of the Board and External Audit & Supervisory Board Members). All seven officers meet the standards for independence determined by stock exchanges and are registered as independent officers based on the regulations for listing marketable securities on the Tokyo Stock Exchange.
Major Activities of External Members of the Board and External Audit & Supervisory Board Members
|Member of the Board||Toru Tsuji||He attended all the board meetings held in the current fiscal year. Based on the deep insights obtained from his experience as a manager in a different industry and from his neutral position and view as an external member of the board, he offered useful opinions to the Company's management in order to establish an internal control system and strengthen corporate governance.|
|Member of the Board||Fumio Sudo||He attended 12 out of a total of 13 board meetings held during the current fiscal year. Based on the deep insights obtained from his experience as a manager in a different industry and from his neutral position and view as an external member of the board, he offered useful opinions to the Company's management in order to establish an internal control system and strengthen corporate governance.|
|Audit & Supervisory Board Member||Terunobu Maeda||He attended all of the board meetings and audit & supervisory board meetings held during the current fiscal year. He offered his opinions as and when appropriate based on his broad knowledge of finance and accounting.|
|Audit & Supervisory Board Member||Shigeru Morichi||He attended 12 out of a total of 13 board meetings held in the current fiscal year and 13 of a total of 14 audit & supervisory board meetings held during the same period. He offered his opinions as and when appropriate based on the deep insights obtained from his experience as a university professor.|
|Audit & Supervisory Board Member||Kiwamu Miyakoshi||He attended all of the board meetings and audit & supervisory board meetings held during the current fiscal year. He offered his opinions as and when appropriate based on the deep insights obtained from his experience as a police officer.|
|Audit & Supervisory Board Member||Kunitoshi Saito||He attended all of the board meetings and audit & supervisory board meetings held during the current fiscal year since assuming the position of external audit & supervisory board member at the 156th Annual General Meeting of Shareholders on June 29, 2016. He offered his opinions as and when appropriate based on the deep insights obtained from his experience at the Board of Audit of Japan.|
|ISO||6.2.3 Decision-making processes and structures|
Company-Wide Risk Management
At Taisei Corporation, we have formulated a Risk Management Policy＊1 and built systems to implement risk management across the whole company in order to respond to risk escalation following changes in the business environment.
In terms of handling risk management, we identify and select risks that influence business activities every year. Depending on their importance, we classify them into categories such as "important company-wide risk" or "risk within the jurisdiction of head office". As well as preparing countermeasures, we also implement pragmatic risk management by clarifying supervisory roles and jurisdictions among the departments.
Specifically, information on incidents and accidents with the potential to have a serious impact on the management of the corporation is centralized at the CRO＊2 Secretariat. We implement effective risk management across the whole company including measures to prevent any reoccurrence by sharing this information with the Risk Management Committee and the Risk Management Council.
Company-Wide Risk Management System
1 Formulated in September 2004
2 CRO: Chief Risk Management Officer
Initiatives for Business Continuity Planning (BCP)
Taisei Corporation has established the Policy on Business Continuity in Times of Disaster＊3 to meet its responsibilities as a general construction company supporting the infrastructure for economic activities. We aim to become a company earning the trust of society by contributing to business continuity at central and local governments and corporations while maintaining our business functions in time of disaster.
The Company has recently enhanced bases to serve as backup locations in case head and branch offices are damaged in a disaster in order to further ensure solid base functions in time of disaster.
At head office, we strengthened our disaster response capabilities by enhancing our employee dormitory "Premier Hatsudai" and other facilities and setting them up as new backup locations for head office.
In addition, we update our Business Continuity Planning (BCP) annually in order to fulfill the duties noted above, including reinforcement of our crisis management system overseas in FY2015, and acquiring new certifications related to the BCP (Certification of Organizations Contributing to National Resilience).
Thanks to these efforts, we were able to swiftly respond to requests for reconstruction and supplies from our business partners during the Kumamoto Earthquake that occurred in April 2016.
3 Formulated in November 2005
Acquired Newly Launched "Certification of Organizations Contributing to National Resilience"
Taisei Corporation acquired the "Certification of Organizations Contributing to National Resilience (Resilience Certification)" in the first round of a newly launched government program that recognizes and supports outstanding disaster prevention and mitigation measures by private-sector companies. A total of 44 companies acquired the program's first certification.
The certification is granted to business operators who support the advancement of national resilience and take active business continuity measures in its promotion. Taisei Corporation received certification in recognition of work through its BCP and other initiatives.
Stakeholder Dialog and Information Disclosure
|ISO||6.2.3 Decision-making processes and structures|
To deliver sustainable development and to earn the trust of society as a corporation, it is vital to make timely and accurate disclosures to stakeholders concerning important information about corporate activities. Taisei Corporation established the Information Disclosure Policy＊1 and stated principles for ensuring appropriate information disclosure and transparency in the basic policies of corporate governance. These policies form the basis for our practice of timely and appropriate information disclosure.
1 Formulated in May 2006
Dialog with Shareholders and Investors
In order to achieve sustainable growth and improve corporate value in the medium- to long-term, Taisei Corporation established the IR Policy＊2 regarding structures and initiatives to promote constructive dialog and discussions with shareholders.
To make the dialog with shareholders and investors more constructive, the opinions and content of our discussions with stakeholders are fed back to the management ranks.We also carried out IR activities overseas for the first time last year.
We strive for fair information disclosure via our website where we publish explanatory material with commentary, summaries of the President's speeches and the main question and answer sessions (Japanese and English) in addition to the Medium-term Business Plan and materials distributed at results briefings.
We also strive to promote constructive dialog through business report briefings by the President and question answer session at the annual general meeting of shareholders, the main venue for important dialog with shareholders.
In addition, we disclose information to overseas investors in English in our annual reports and on our English website.
In order to further deepen understanding of the corporate activities at Taisei Corporation, we also report on key business and ESG (Environment, Society, Governance) initiatives on the shareholder newsletter.
2 Formulated in November 2015
Implementation of First IR Activities Overseas
Taisei Corporation carried out its first IR activities overseas last year, with the President personally visiting overseas institutional investors and holding meetings with institutional investors from London and Edinburgh. Dialog at the meetings covered a wide variety of topics, from the outlook for Japan's construction market after the Tokyo 2020 Olympic and Paralympic Games and the problem of the shortage of skilled construction workers, to shareholder returns.
We will continue to deepen our dialog with a broad range of shareholders and investors, including continued IR activities overseas.
|ISO||6.2.3 Decision-making processes and structures|
Opportunities for Dialog with Major Stakeholders
|Major Stakeholder||Responsibilities of Taisei Corporation||Opportunities for Dialog|
|Shareholders, Investors||Improve financial health and raise corporate value
|Clients, End-Users||Creating a safe, secure, and comfortable society
(cooperating companies, specialist subcontractors)
|Sustainable harmony and benefit
|Employees||Self-realization by putting my work on the map.
|The Environment, Society, Future Generations||Capacity building＊
Capacity building: An activity to form, improve, and build organizational capabilities and basic capacity.
Deepening Ties with Souyu-kai
Souyu-kai, the organization of our main cooperating companies, which originated as Harusamekai at its launch in 1917, counts 691 companies among its members as of March 2017.
The Souyu-kai Convention was held at the Hotel Okura Tokyo in February 2017 to celebrate the 100th anniversary since the establishment of Souyu-kai and to build strong cooperative relationships for the future. Approximately 200 people attended from Taisei Corporation, including Chairman of the Board Takashi Yamauchi and President Yoshiyuki Murata, along with some 400 Souyu-kai members.
In his address, President Murata said that he would continue to place great value on the relationship between Taisei Corporation and Souyu-kai, and that he hoped to see the Taisei Spirit of "Active and Transparent Culture," "Value Creation," and "Evolution of Tradition" realized in each branch and worksite.