Corporate Governance
(As of March 31, 2011)
Basic Corporate Governance Philosophy
Increasing value for stakeholders is a task of the highest priority for Tokyu Corporation, as it is for all business. We place particular emphasis on the following:
(1) Sustainability through the selection of business areas that can achieve sustainable growth and the introduction of effective management systems,
(2) Visibility and transparency through the development of organizational structures and the operation of systems that are visually convincing, and
(3) Accountability through the fulfillment of the Company's responsibility to keep stakeholders informed of the performance of operations.
Rationale for Adopting the Present Governance System
Tokyu Corporation and the Tokyu Group view safety as the basis for all operations. In particular, because the railway business is highly public in nature, the Group understands that ensuring customer safety is its greatest responsibility. The Group has been united in taking initiatives to fulfill this responsibility. We believe that, to ensure the sound management and maintenance of the Company's safety management system, and to bolster the corporate value and benefits that are shared with shareholders, the Company needs to develop management plans and operate from a long-term perspective under the present corporate governance system.
Meeting of the Board of Directors has also resolved the issue of the segregation of the duties of the directors. The Company believes that it is important to assign to each division directors who have the knowledge and experience needed to oversee the operations of the division, and who have extensive knowledge of organizational management. This will ensure that the directors execute their duties appropriately and efficiently. In addition, the Company has appointed seven outside directors and outside corporate auditors who possess superior knowledge of corporate management in a wide range of industries, combined with excellent management skills. By reflecting their knowledge and independent views in its management, the Company strongly believes that it has secured an appropriate execution of duties of its outside directors and executive officers.
Moreover, because the Company and a large number of its subsidiaries operate a wide range of businesses, we believe that it is important for our Group companies to maintain and enhance the trust of all stakeholders, who play key roles in our operations as shareholders, customers, residents along our railway lines, administrative agencies, business partners, creditors, employees and their family members. For this reason, to enable us to comprehensively manage our Group companies, including consolidated subsidiaries, from the best possible perspective, we have been taking steps to achieve sound group governance by developing internal control systems and other necessary systems.
Relationship Between Outside Directors and Outside Corporate Auditors and the Company
[Outside Directors]
| Names | Supplementary Information to Terms of the Compliance |
Grounds for Appointment |
|---|---|---|
| Yoshizumi Nezu | Mr. Yoshizumi Nezu is the President and Representative Director of Tobu Railway Co., Ltd. that operates the business in the same industry as the Company. Although the Company and Tobu have a trading relationship, including paying charges for the use of cars, the two companies have no trading relationship that needs to be specified, and the above transactions do not affect the Company's management. In addition, Mr. Yoshizumi Nezu and the Company share no special mutual interests. | Mr. Yoshizumi Nezu is the President and Representative Director of Tobu Railway Co., Ltd. The Company has appointed Mr. Yoshizumi Nezu as its Outside Director as well as an Independent Director so that he can continue to reflect his extensive experience and a wide range of knowledge as a manager of mainly the transportation business to the Company's management. |
| Keiichi Konaga | Mr. Keiichi Konaga is the Advisor of AOC Holdings, Inc. Mr. Keiichi Konaga and the Company share no special mutual interests. | Mr. Keiichi Konaga is the Advisor of AOC Holdings, Inc. The Company has appointed Mr. Keiichi Konaga as its Outside Director as well as an Independent Director so that he can continue to reflect his extensive experience and a wide range of knowledge he has acquired mainly through his experiences of trade and industry in the government, corporate management, and his activities in the business community to the Company's management. |
| Masatake Ueki | Mr. Masatake Ueki is the Representative Director and the Chairman of the Board of Tokyu Land Corporation, the Company's affiliate that operates the business in the same industry as the Company. Although the Company and Tokyu Land Corporation have a trading relationship, including leasing of facilities, the two companies have no trading relationship that needs to be specified, and the above transactions do not affect the Company's management. In addition, Mr. Masatake Ueki and the Company share no special mutual interests. | Mr. Masatake Ueki is the Representative Director and the Chairman of the Board of Tokyu Land Corporation, the Company's affiliate. The Company has appointed Mr. Masatake Ueki as its Outside Director as well as an Independent Director so that he can continue to reflect his extensive experience and a wide range of knowledge as a manager of mainly the real estate business to the Company's management. |
*The above three persons have submitted independent directors/auditors notification forms as independent directors to the Tokyo Stock Exchange.
[Outside Corporate Auditors]
| Names | Supplementary Information to Terms of the Compliance |
Reasons for Appointing Outside Corporate Auditors in Question |
|---|---|---|
| Tetsuo Iwata | Mr. Tetsuo Iwata is the Company's full-time Corporate Auditor. The Company has transactions with the Bank of Tokyo-Mitsubishi UFJ for which Mr. Tetsuo Iwata was previously an operating executive, including borrowings that accounted for approximately 6% of all the Company's borrowings as at the end of March 2010. However, the above transactions are carried out under general trading conditions and do not significantly affect the Company management. Incidentally, Mr. Tetsuo Iwata was elected as a Corporate Auditor at the 138th general meeting of shareholders (held on June 28, 2007), and reelected at the 139th general meeting of shareholders (held on June 27, 2008). Since the election, Mr. Tetsuo Iwata has had no relationship with the above bank. In addition, Mr. Tetsuo Iwata and the Company share no special mutual interests. | With his extensive experiences at a financial institution and his wide range of knowledge, Mr. Tetsuo Iwata is an appropriate person who can steadily audit the Company. For these reasons, the Company has continued the appointment of Mr. Tetsuo Iwata as its Outside Auditor as well as an Independent Director. |
| Shunji Kono | Mr. Shunji Kono is an honorary advisor of Tokio Marine & Nichido Fire Insurance Co., Ltd. The Company and Tokio Marine & Nichido Fire Insurance have no trading relationship that needs to be specified. In addition, Mr. Shunji Kono and the Company share no special mutual interests. | Mr. Shunji Kono is an honorary advisor of Tokio Marine & Nichido Fire Insurance Co., Ltd. The Company has appointed Mr. Shunji Kono as its Outside Corporate Auditor as well as an Independent Director so that he can continue to reflect his extensive experience and knowledge as a manager in the Company's audits. |
| Kunie Okamoto | Mr. Kunie Okamoto is the President of Nippon Life Insurance Company. The Company and Nippon Life Insurance Company have transactions, including borrowings and lending of funds. As these transactions are carried out under general trading conditions, the Company and Nippon Life Insurance Company have no trading relationship that needs to be specified, and the above transactions do not affect the Company's management. In addition, Mr. Kunie Okamoto and the Company share no special mutual interests. | Mr. Kunie Okamoto is the President of Nippon Life Insurance Company. The Company has appointed Mr. Kunie Okamoto as its Outside Corporate Auditor as well as an Independent Director so that he can continue to reflect his extensive experience and knowledge as manager in the Company's audits. |
| Katsutoshi Saito | Mr. Katsutoshi Saito is the Deputy Chairman and Representative Director of Dai-ichi Life Insurance Company. The Company and Dai-ichi Life Insurance Company have transactions, including borrowings and the lending of funds. As these transactions are carried out under general trading conditions, the Company and Dai-ichi Life Insurance Company have no trading relationship that needs to be specified, and the above transactions do not affect the Company's management. In addition, Mr. Katsutoshi Saito and the Company share no special mutual interests. | Mr. Katsutoshi Saito is the Deputy Chairman and Representative Director of Dai-ichi Life Insurance Company. The Company has appointed Mr. Katsutoshi Saito as its Outside Corporate Auditor as well as an Independent Director so that he can continue to reflect his extensive experience and knowledge as manager in the Company's audits. |
*The above four persons have submitted independent directors/auditors notification forms as independent auditors to the Tokyo Stock Exchange.
Basic Idea about Internal Control Systems and the Development of the Systems
Basic Position on Internal Control Systems
Tokyu Corporation will practice and improve internal control under the concept of risk management through compliance management, which is set out in the Group Management Policy.
Development of Internal Control Systems
(1) Development of a compliance system
The Company seeks to keep employees informed of the Tokyu Corporation Code of Conduct through regular training programs and the development of manuals.
The Company has established a compliance system in which the Legal Affairs Division carries out comprehensive legal checks, and compliance supervisors and assistants assigned to each department check compliance using tools such as a "Legal Checklist." The Management Conference considers important compliance matters and reports the outcomes of its deliberations to the Board of Directors. Tokyu Corporation has set up Compliance Consultation Desks, both internally and at a law firm. The desks receive information on violations of the Code of Conduct directly from employees and provide them with consultation. They also correct the violations.
To ensure the appropriate execution of operations, the Company has strengthened the internal audit system and reports the results of internal audits to management and corporate auditors.
To ensure the reliability of financial reporting, Tokyu Corporation has established and carries out internal control relating to financial reporting.
(2) Development of a risk management system
To promote risk management through compliance management, the Risk Management Division analyzes risks identified by each operation from a Company-wide perspective and reports them to the Management Conference, which in turn discusses the direction of risk controls and steps to be taken, and reports the discussions to the Board of Directors.
To control the range of risks relating to operating activities and minimize losses, Tokyu Corporation is developing a complete crisis management system under the Crisis Management Basic Regulations.
(3) Development of information management system
Tokyu Corporation stores and manages documents and information relating to directors' performance of their duties under the Information Management Basic Regulations and Information Security Regulations.
The Company also manages confidential information thoroughly under the Confidential Information Management Regulations and Insider Trading Prevention Regulations and discloses information that should be disclosed on time under the Disclosure Policy.
(4) Development of system to ensure appropriate operations in the corporate group
The Tokyu Group Corporate Executive Committee is the highest decision-making body for Group management policies. Meetings of the Group Companies Management Conference are held to obtain information on operations through the business plans, budgets, and results of Group companies.
The Company urges Group companies to be aware of the importance of internal control by keeping them informed of the Group Internal Control Guidelines, enhancing the effectiveness of internal control throughout the Group.
The Brand Management Committee determines basic policies about brands, including brand strategies, and sets standards for the use of the Tokyu brand by Group companies. The Company is striving to enhance the value of the Tokyu brand by transmitting the identity of the Company and requesting unauthorized use of the Tokyu brand to cease.
The Company informs key Group companies of its risk management approach and collects information from them on risks.
Under the Tokyu Group Compliance Policy, the Company has established the Risk Management Committee and CSR Promotion Committee, which consist of representatives of major Group companies, and pursues compliance, risk management, and CSR activities for the entire Group.
Tokyu Corporation has developed internal controls relating to financial reporting under the Consolidated Accounting Guidelines. To ensure appropriate operations in the corporate group, the Company gives instructions to and improves the internal control of Group companies, especially consolidated subsidiaries, through internal audits based on internal audit plans and the evaluation of internal control relating to financial reporting.
Basic Policy for Rejecting Antisocial Forces
The Company does not deal with or give favors to antisocial forces and organizations and moreover rejects any relationships with them. By stepping up collaboration with lawyers and external organizations, including the police, the Company is developing a system of refusing any dealings with antisocial forces.
Development of a System for Refusing Dealings with Antisocial Forces
To promote compliance and CSR management, the Company has established the Tokyu Corporation Code of Conduct, which specifies principles for the activities of officers and employees. The Code of Conduct prohibits relationships with antisocial forces and clearly states that the Company should completely sever any connection with antisocial forces and organizations and, to achieve order and safety in civil society, should be resolute in rejecting any advances.
Organization Chart
