Latest releases Search by month Search by subject
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 transparency
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 company's management.

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.

2. 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.
3. 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 responsiveness.

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.

Information in the press releases, including product prices and specifications, content of services and contact information, is current on the date of the press announcement,but is subject to change without prior notice.

Press Releases Top PageCopyright