| Toshiba to adopt "Company with Committees System"|
29 January, 2003
Moving to further enhance
corporate governance and transparency
Tokyo--Toshiba Corporation announced today that its board of directors
has decided to adopt the "Company with Committees System" under
the revised Japanese Commercial Code that will come into force this April.
The board made the decision at its meeting today, as a means to further
enhance corporate governance by reinforcing supervisory functions and
management transparency, and to improve operating agility and flexibility.
Toshiba will finalize details of the new structure and present it to
the annual meeting of its shareholders for approval in June this year.
In recent years, Toshiba has taken a series of proactive steps to improve
its management structure. Among these are adoption of its own executive
officer system in 1998; the introduction of in-house companies in April,
1999; the establishment of Nominating and Compensation Committees in June
2000; and the June 2001 increase of the number of outside directors to
three, while cutting the term of office for a director from two years
to one. Toshiba believes that adoption of the "Company with Committees
System" will build on these measures and promote greater management
efficiency and transparency.
Reinforced supervisory functions and improved
A combination of the redefined board of directors and three committees
with majorities of outside directors--Nominating, Compensation and
Audit--will enhance operating transparency and supervision of the
In-house auditing of Toshiba's corporate activities is currently
supported by four statutory auditors, including two outside auditors.
Under the new governance structure, the audit committee members
will assume the new responsibility of monitoring the appropriateness
of business decisions carried out by company officers, in addition
to taking on the statutory auditors' role of assisting the Board
with respect to the company's compliance with legal and regulatory
requirements. In carrying out these responsibilities, the audit
committee, whose members also sit on the board of directors, will
promote an enhanced supervisory function, with the close support
of the Corporate Audit Division.
||Enhanced management agility and mobility
Toshiba voluntarily adopted its own executive officer system in 1998
to separate execution of business and supervision of management. However
under the previous Commercial Code, the board of directors was legally
responsible for both execution and supervision. Under Japan's revised
Commercial Code, the Company with Committees system articulates a
division of legal responsibility between the executive officers and
the board: It provides for executive officers to execute business,
while the board concentrates on supervision of management. Executive
officers will be able to act with greater agility and mobility to
meet the challenges of the business environment.
||Further enhancement of management speed
The previous Commercial Code required board approval for substantial
initiatives. This imposes a system of dual approval--by the board,
and by the executive officers as members of the company's management
meeting. The Company with Committees system makes the executive officers
responsible for business decision-making, which will improve management
Reinforcement of Risk and Compliance Management
The Company with Committees System clarifies that the board must
establish an internal control system for risk and compliance management.
Toshiba already meets this requirement, as it has a Chief Risk Management
Officer (CRO), Risk management Committee and Compliance Committee.
It will further reinforce this structure.