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Overview
Corporate Governance Structure and Internal Control System
For the Group's sound and sustainable growth, and improvement of its corporate value in the mid-to long-term, in response to the delegation of responsibilities by and trust of all stakeholders, including shareholders and business partners, Nippon Steel has established a corporate governance system suited to the Group's business.
Nippon Steel has adopted a company structure with an Audit & Supervisory Committee for the purpose of, among others, expediting management decision-making, enhancing discussions relating to items such as the formulation of policies and strategies by limiting the number of items for deliberation by the Board of Directors, and strengthening the supervisory function of the Board of Directors over management.
To ensure the soundness of management, Nippon Steel has in place a system where the Audit & Supervisory Committee, which is comprised of internal Directors who are full-time Audit & Supervisory Committee Members with intimate knowledge of Nippon Steel’s businesses and Audit & Supervisory Committee Members who are Outside Directors with a high degree of expertise, conducts daily audit activities systematically, in collaboration with Nippon Steel’s internal audit department. In the daily audit activities, the Audit & Supervisory Committee focuses on priority audit items such as the development and operational status of the internal control system, the development status of an operational foundation, promotion status of management plans and various measures. By all Directors appropriately fulfilling their roles and responsibilities, multifaceted deliberations and objective and transparent decision-making by the Board of Directors are secured.
Nippon Steel’s Board of Directors is comprised of 15 Directors, of whom 5 are Outside Directors, accounting for one-third of the total number of Directors（as of June 23,2023）. Nippon Steel decides the independence of Outside Directors in accordance with the independence standards set by the financial instruments exchanges in Japan. Since Nippon Steel believes that each of the Outside Directors is independent, Nippon Steel has reported all of them as Independent Directors to each financial instruments exchange in Japan.
In accordance with a provision in the Articles of Incorporation, the Board of Directors delegates part of the decisions regarding execution of important operations to the Representative Director and Chairman and Representative Director and President, thereby expediting management decision-making, enhancing discussions by the Board of Directors relating to matters such as the formulation of management policies and strategies, and strengthening the supervisory function of the Board of Directors over management. The execution of important matters concerning the management of Nippon Steel and the Nippon Steel Group is determined at the Board of Directors (held about once per month) after deliberations in the Corporate Policy Committee (held once a week, in principle) comprised of the Chairman, President, Executive Vice Presidents, and other members, pursuant to Nippon Steel’s rules. In addition, Nippon Steel has set up a total of 23 company-wide committees (as of April 1, 2023), each with its own objective, where details on designated themes are hashed out before the Corporate Policy Committee and the Board of Directors embark on decision-oriented discussions. The execution of business strategies mandated by the Board of Directors and other executive structures is promptly addressed by the Directors responsible for these businesses, executive officers, and the general managers of relevant units/divisions, under the direction of the Chairman, Representative Director, as well as the President, Representative Director. These actions are accomplished by stipulating in writing the ordering authority, oversight responsibility, and procedures required to implement strategies.
Nippon Steel has resolved its Basic Policy concerning internal control system at its Board of Directors meeting and stipulates its Basic Rules for Internal Control for establishing a system for internal controls and risk management based on autonomous internal control activities.
