Placing reinforcement of corporate governance as one of the most important management issues, the entire “K” Line Group continuously strives to act in total accordance with its corporate principles while implementing effective systems of corporate governance and a framework to control various risks as well as to increase corporate brand value.
As a basic principle of corporate governance, the “K” Line Group has formulated its “Corporate Governance Guidelines”.
The Board of Directors and Audit & Supervisory Board are in charge of building, managing and monitoring the Company’s corporate governance structure, while committees and other organs work to enhance the structure. With effect from April 1, 2016, the company will implement “Unit Supervision System” and “Unit Supervising Executive Officers” for further improvement of efficiency and reinforcement of business execution system.
The Board of Directors is an organ of the Company that meets at least once a month and determines fundamental management policies, matters required by laws and regulations, and other important management-related matters, as well as supervising the execution of duties by the Directors. Two of the nine Directors are Outside Directors. The Audit & Supervisory Board Members also attend the Board of Directors’ Meetings.
➤Nominating Advisory Committee
The Nominating Advisory Committee is comprised of all Outside Directors and the Director and Chairman and the President and Chief Executive Officer, while the chairmen are appointed from among the Outside Directors through mutual election among themselves. The committee conducts deliberations on reasonableness of proposals for appointment or dismissal of the Company’s Officers upon consultation from the Board of Directors.
➤Remuneration Advisory Committee
The Remuneration Advisory Committee is comprised of all Outside Directors and the Director and Chairman and the President and Chief Executive Officer,while the chairmen are appointed from among the Outside Directors through mutual election among themselves. The committee conducts deliberations on institutional design of Officers’ remunerations and level of Officers’remuneration upon consultation from the Board of Directors.
The Audit & Supervisory Board formulates and implements audit policies and plans, and undertakes to conduct efficient, expeditious auditing. Three of the four members of the Audit & Supervisory Board are outside members. As an independent organ, the Audit & Supervisory Board supervises the execution of duties by the Directors through attendance at meetings of the Board of Directors and other important meetings and the inspection of important decision-making documents. “K” Line assigns dedicated staff as assistants to the Audit & Supervisory Board Members.
The Management Conferences function as a system to help the President & CEO and/or his/her representatives make decisions, through lively discussion. The conferences are held every week, attended by the Chairman of the Board, the President & CEO, Senior Managing Executive Officers, the Executive Officers in charge of Corporate Planning, Finance and Accounting, and Members of Audit & Supervisory Board.
Executive Officers’ Meetings are held once a month in principle, attended by all the Executive Officers, including those concurrently serving as Directors, and Audit & Supervisory Board Members, where progresses of business executions (including monthly performances) are reported and decisions are made through discussion.
Meetings of the Investment Committee, consisting of the Executive Officer in charge of Corporate Planning, the Executive Officer in charge of Finance, and other Executive Officers and Group General Managers designated by the President & CEO, are held periodically to deliberate on basic plans and important initiatives for maximizing investment effects, while taking the Company’s investment capacity into consideration. The Committee also monitors past investment effects and considers the termination or cessation of such investments.
In order to fulfill its social responsibility, respond to the mandate bestowed by stakeholders and achieve sustainable growth, the Company is strengthening its corporate governance and restructuring the governance system of the Board of Directors by further enhancing its supervising function of business execution in addition to its decision making function of the Company’s management principles and business strategies. The Company has decided to implement “Unit Supervisory System” with effect from April 1, 2016, so that its business execution can be more efficient and enhanced. In the meantime, the Company has reviewed responsibilities of each Executive Officer.
Under the direction of the President & CEO, as a head of business execution, will be placed Unit Supervising Executive Officers who control and supervise multiple business departments or administration departments. The number of Executive Officers responsible for each unit will be 6 in total. Under the control of Executive Officers responsible for each unit, Executive Officers in charge of each department will be placed.
Under the Unit Supervisory System, there will be 3 business units, namely “Containerships, Car Carrier, Port Business Unit”, “Drybulk, Energy Transportation Unit”, and “Logistics, Affiliated Business Promotion Unit”.
On the administration side, there will also be 3 units, namely “Corporate Unit (responsible for General Affairs, Legal, Corporate Legal Risk & Compliance, Human Resources, Corporate Planning, Finance, Accounting, IR&PR)”, “Information System Unit”, and “Marine Sector, Technical and Environmental Affairs (including Fuel Cost Control) Unit”. Please note that there will be no changes in operating segments in financial statements.
The Board of Directors is responsible for building the internal control system, evaluating its effectiveness and ensuring that it functions properly. In addition, through monitoring and verifying the status of the internal control system, the Internal Audit Group plays a role in supporting the Board of Directors in carrying out its responsibilities for the development, maintenance and enhancement of the internal control system. The Audit & Supervisory Board Members oversee the processes by which the Directors build the internal control system and confirm that it is functioning effectively.
To ensure proper business operations of the "K" Line Group companies, we have established the Charter of Conduct: "K" Line Group Companies, as a keystone for both corporate governance and compliance of the entire group. Based on this Charter, each Group company has established its own Implementation Guideline for Charter of Conduct.
We have introduced a whistle-blowing system called the “Hot Line System.” In addition to an internal contact, we have also appointed lawyers as external contacts. Furthermore, we have appointed full-time Audit & Supervisory Board Members as another contact window independent from business execution. All employees working at “K” Line or at one of the Group companies that participates in this system, regardless of their position or type of employment, are able to use the system. By establishing user-friendly whistle-blowing system, where the protection of whistle-blower is clearly stipulated and a contact for prior consultation is placed, the Company strives to prevent any violation of compliance.