Itochu : Corporate Governance Report

Basic Policy

ITOCHU commits itself to the global good. To realize this mission, ITOCHU strives to respect each individual and to make meaningful contribution towards creating a bright future for all human beings and the environment. In addition, 'I am One with Infinite Missions' was adopted as a corporate message to express the ITOCHU Mission in plain terms. Underlying the message is the exceptional ability of each employee, the core strength of ITOCHU.

It is our fundamental management policy to build a fair and good relationship with various stakeholders based on our corporate philosophy and our code of conduct and thus improve our corporate value from a long-term perspective. In accordance with this policy, with the intention to ensure proper and efficient execution by management, we will enhance the transparency of decision-making and establish a corporate governance system in which monitoring and supervision functions are appropriately incorporated.

A strong leadership and a transparent decision-making system are pillars of good corporate governance. ITOCHU adopts an organizational structure with the presence of a Board of Corporate Auditors (kansayaku secchi kaisha). In recent years, ITOCHU has gradually shifted to a governance model where executive officers decide and carry out the day to day business under the direction and supervision of the Board of Directors, as itself monitored and audited by the Board of Corporate Auditors.

In order for the Board of Directors to further exercise effective control and management over the corporation, independent outside directors have already joined the Board and, as another measure to strengthen its corporate governance, ITOCHU has also established a Governance and Remuneration Committee and a Nomination Committee as advisory committees to the Board of Directors. Each committee is chaired by an independent outside director and is composed of half or more outside members. In order to separate execution by and monitoring over management, we reduced several executive directors and the percentage of outside directors in our Board of Directors was increased to one-third or more from April 2017. We keep this percentage of outside directors also in FY2019. Also, based on the idea that it is necessary to have a new management structure in order to evolve and create our business models in response to the rapidly changing world and also keeping management continuity in our mind, the new management structure that Chairman of the Company is Chief Executive Officer and President of the Company is Chief Operating Officer has started as from FY 2019. In light of the fact that election of senior executives is a quite important strategic decision, we convened the Nomination Committee several times and the new management structure was well discussed in the committee and thereafter it was resolved at the Board of Directors. In appointing outside directors and corporate auditors, ITOCHU places great importance on their independence, and in this connection, ITOCHU has adopted its own independence criteria, augmenting the independence criteria established by the Tokyo Stock Exchange.

This highly independent Board of Directors monitors execution by management as well as deliberates the execution of business that is of high quantitative or qualitative importance. The Company believes this arrangement facilitates not only appropriate monitoring over execution by management but also the consideration of important business execution from an external perspective.

It is also vital that ITOCHU timely and adequately discloses its financial and non-financial information to the stakeholders as part of good governance. In May 2015, in line with the ITOCHU Mission and the Corporate Governance Code of the Tokyo Stock Exchange, ITOCHU adopted a 'Basic IR Policy' to further promote a multi-party stakeholder dialogue. Through the communication with its stakeholders, ITOCHU aims to enhance its corporate value on a long-term basis.

We believe that our current corporate governance structure accords with good and effective corporate governance called for by the Tokyo Stock Exchange, in its Corporate Governance Code. ITOCHU will continue to evaluate and improve its corporate governance structure so that it always best suits ITOCHU in any given moment and time in its corporate history.

Below is ITOCHU's compliance with the Corporate Governance Code as of June 2018.
ITOCHU complies with all principles set forth in the Corporate Governance Code. For your reference, this Report was prepared and lodged in accordance with the Corporate Governance Code before the revision made on June 2018 and we will again prepare and submit the Report as to whether ITOCHU complies with the revised principles set forth in the revised Corporate Governance Code.
For details, please refer to Corporate Governance Report(1.0MB)

• The Company established the Nomination Committee and the Governance and Remuneration Committee as advisory committees to the Board of Directors.
  (Please refer to 'Overview of ITOCHU's Corporate Governance and Internal Control System ' below)
  
• We have established the policy on holding listed shares for purposes other than pure investment and standards for the exercise of voting rights thereon. (Please refer to below)
  
• In regard to judgements regarding the independence of outside directors and outside audit & supervisory board members, the Company has adopted its own independence criteria, in response to the Corporate Governance Code. (Please refer to below)
  
• ITOCHU has formulated Basic IR Policy. (Please refer to Basic IR Policy)