The Basic Concept of Corporate Governance
Our corporate group seeks to meet the demands of our internal and external stakeholders, including customers, stockholders and investors, local communities, and employees, while coexisting and prospering alongside society. We also seek to respond quickly and appropriately to changes in the business environment. We see establishing systems to achieve fairer and more transparent management as among our most important business challenges and are making efforts to achieve the highest standard of corporate governance.
We are currently working to establish systems that will raise our levels of compliance and risk management. With respect to management transparency, we plan to expand and improve our stockholders' meetings and engage in active dialogue with the market through IR activities. Subsequent management will then review and reflect upon the results.
At JFE Holdings, Inc., the greater parent company of JFE Steel Corporation, which in turn is our own parent company, a JFE Group CSR Meeting has been established to reinforce CSR activities throughout the JFE group. These efforts also involve applying group-wide policies to promote CSR activities while accounting for the characteristics of the IT service industry.
We have adopted an auditor system for our management systems. Since our board members have thorough knowledge of business operations, they are able to provide the appropriate supervisory functions for operating performance while working to sustain and optimize managerial efficiency. The board of auditors, including outside company auditors, works to ensure sound management practices. Through management meetings and other forums, we are continuously discussing and reviewing issues related to the identification of management risks, the handling of major risk challenges, and the validity and effectiveness of our business operations.
In the area of internal controls, we have established an internal audit office as a specialized department and manage it in cooperation with the board of auditors. We have also established a compliance committee, with our president serving as chairman, to increase awareness of compliance issues. To ensure prompt response to serious crises affecting the company, including natural disasters, we have established a company-wide crisis-management committee, also chaired by our president.
We use an auditor system to achieve fair and transparent management, ensure effective business management, and improve company value. To strengthen corporate governance, one external directors sit on our seven-member board of directors. These directors monitor and assess business operations, while a board of four auditors, including two outside auditors, monitors management. Accounting auditors and other individuals comprise the last component of a tripartite system designed to ensure sound governance. We also use an executive officer system to clarify authority and responsibility in the management decision-making process and to determine how best to separate business operations and promote prompt decision-making and execution.