Corporate Governance

Under the corporate philosophy, “Nippon Steel & Sumitomo Metal Corporation Group will pursue world leading technologies and manufacturing capabilities, and contribute to society by providing excellent products and services,” NSSMC will strive 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 from all stakeholders, including shareholders and business partners.

To that end, NSSMC will establish a corporate governance structure appropriate for the Group’s business, and constantly review and improve it from various viewpoints, including management efficiency, soundness, and transparency.

For the details of situations regarding the NSSMC’s corporate governance, please see NSSMC’s Corporate Governance Report.

Basic Structure of Corporate Governance

NSSMC, which aims to be the “best steelmaker with world leading capabilities” with steelmaking as its core business, has adopted a company structure with an Audit & Supervisory Board, because NSSMC believes that the following structure is effective in ensuring management efficiency and soundness: the Board of Directors, which consists mainly of Directors familiar with the business of NSSMC and corporate management, makes decisions not only on basic management policies, but also on the execution of important business matters; and the Audit & Supervisory Board Members, with considerable authority, attend meetings of the Board of Directors to independently supervise the performance of responsibilities by Directors and officers.

From among the above, to ensure management soundness, full time Audit & Supervisory Board Members, who are familiar with the business of NSSMC, and Outside Audit & Supervisory Board Members, who have vast experience in, and deep insights into, respective professional fields, based on their extensive legal authority, collaborate appropriately with NSSMC’s accounting auditor (audit company), the Internal Control & Audit Division, and Audit & Supervisory Board Members of the Group companies, and supervise daily, among other things, the performance of responsibilities by Directors, Executive Officers, and other officers, and the status of NSSMC’s assets.

Further, in order for the Board of Directors to make decisions from diverse perspectives and enhance its function of supervising management, NSSMC has several Outside Directors who have vast experience in, and deep insights into, corporate management, or other matters.

Currently, in addition to 12 Executive Directors, two Outside Directors and seven Audit & Supervisory Board Members (four of which are Outside Audit & Supervisory Board Members) who do not engage in the execution of business, attend meetings of NSSMC’s Board of Directors to ensure management soundness.

At NSSMC, in order for all Outside Directors and Outside Audit & Supervisory Board Members to obtain the necessary information and sufficiently fulfill their roles, the Chairman, the President, other senior management, and Senior Audit & Supervisory Board Members regularly hold meetings with those Outside Directors and Outside Audit & Supervisory Board Members to share the management challenges, and exchange opinions.

To enhance management transparency and advance a correct understanding by stakeholders on the management situation of the Group, NSSMC not only seeks to disclose information in accordance with applicable laws and regulations and the rules of financial instruments exchanges, but also seeks to disclose financial and non financial information at an appropriate timing, in an easily understandable manner, and accurately.

To comply with applicable laws and regulations, and ensure the integrity of financial reports and the effectiveness and efficiency of business and affairs, NSSMC establishes and appropriately operates an internal control system, and strives to continually improve it.  To create a sound and open organization, NSSMC establishes the internal control environment by emphasizing dialogue in and outside the workplace, regularly conducting attitude surveys with all employees, and establishing a whistleblower system to receive consultation and reports not only from employees of NSSMC and the Group companies, but also from temporary workers and employees of contractors and suppliers, and their families.

  NSSMC regularly examines and reviews, at the Board of Directors, the corporate governance
  structure, its operating situation, and other relevant facts and circumstances, including the
  analysis and evaluation of the effectiveness of the Board of Directors as a whole so that
  NSSMC will be able to make improvements autonomously, considering the opinions of Outside
  Directors and Outside Audit & Supervisory Board Members.

Relationship Diagram

The following is a diagram illustrating the relationship regarding NSSMC’s organization and internal control.

1: The execution of important matters concerning the management of NSSMC and NSSMC Group is determined at the Board of Directors (held once or twice 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 NSSMC’s rules.

2: As corporate organizations engaging in deliberations before the Corporate Policy Committee and the Board of Directors, there are 19 company-wide committees in total, including the Ordinary Budget Committee, the Plant and Equipment Investment Budget Committee, the Investment and Financing Committee, the Fund Management Committee, the Technology Development Committee, the Environment Management Committee, and the Risk Management Committee, depending on each purpose.

3: There are 12 staff members dedicated to the Internal Control & Audit Division.

4: As far as the Group companies are concerned, each company establishes and develops an internal control system based on its autonomous internal control, and the responsible divisions of NSSMC provide assistance in their improvement, where necessary. Furthermore, the General Manager for the Internal Control & Audit Division of NSSMC identifies and evaluates the situation of internal control of NSSMC Group as a whole, and gives guidance and advice to each responsible division and each Group company.

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