In June 2018, Kyushu Electric Power transitioned to an Audit and Supervisory Committee.
Chairperson Uriu discussed the advantages of the new approach as well as the ongoing roles of external directors
Ritsuko Kikukawa and Akiyoshi Watanabe.
Feature 3 Transition to an Audit and Supervisory Committ
Michiaki Uriu
Member of the Board of Directors,
Chairperson
Ritsuko Kikukawa
Member of the Board of Directors
(External)
Akiyoshi Watanabe
Member of the Board of Directors
(External)
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ESG SectionQ1Kyushu Electric Power has transitioned to an Audit and Supervisory Committee. What advantages do you
anticipate from this move?
A1 We expect two main advantages: strengthened
corporate governance and accelerated decision making.
Under the new structure, the Audit and Supervisory
Committee will assume the duties formerly executed
by the Board of Corporate Auditors. Since Audit and
Supervisory Committee members also sit on the Board
of Directors, they will have the authority to make
recommendations and give input in such areas as
assignments and compensation for directors, as well
as the right to vote at Board of Directors meetings.UriuAs such, compared to the former Board of Corporate
Auditors approach, their oversight function with respect
to the Board of Directors will be strengthened.
In addition, with the exception of issues covered by
laws and regulations and the articles of incorporation,
the Board of Directors can now delegate important
operational decisions to board members. This will
accelerate decision making and be extremely beneficial
in a rapidly changing operating environment, especially
in promoting growth businesses and other initiatives.
Kyuden Group Annual Report 201852Q2
As a corporation with an Audit and Supervisory Committee, how will the role of external directors who are not
members of that committee change?A2Uriu
Kikukawa
Watanabe
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Both Mr. Watanabe and Ms. Kikukawa are external directors
who do not sit on the Audit and Supervisory Committee,
and we look forward to their continued participation in
management from an independent, outside standpoint.
With the establishment of the Audit and Supervisory
Committee, issues delegated for decision to directors
are to be discussed by the Corporate Management
Committee, and this makes the management committee
even more important than before. From the perspective
of maintaining and strengthening oversight of the Board
of Directors, I believe it will be increasingly important
for both of them to continue providing input, not only
to the board but also to the Corporate Management
Committee, concerning all manner of management
issues.
As external directors, our role is to offer frank, objective
input from an outside perspective and to oversee the
conduct of management. Delegating decision-making
authority to board members has the merit of enabling
more nimble management. However, it brings with it
the risk of management errors that could negatively
impact corporate value. We attend meetings of the
Board of Directors as well as Corporate Management
Committee meetings and strive to offer input based on
our respective experience. I look forward to helping to
speed up the pace of management decision making on
the part of the board members while occasionally acting
as a brake from a risk control perspective, in order to
provide appropriate management oversight.
I agree with Ms. Kikukawa. From a management oversight
perspective, our participation as external directors in
Corporate Management Committee meetings is even
more important than before. The Corporate Governance
Code stipulates that the company shall have at least
two external directors. I understand that in some cases,
companies have fulfilled this requirement by placing
their external auditors on the Audit and Supervisory
Committee. I am fully aware of my role as an external
director who does not sit on the Audit and Supervisory
Committee, and I look forward to representing the
opinions of shareholders to the Board of Directors
appropriately and contributing to enhancing corporate
value over the medium to long term.
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ESG Section
Q3 What do you anticipate from this new structure under President Ikebe?A3Uriu
Watanabe
During my six years as president, I believe I was
able to lay out a path to such medium to long term
goals as restarting our nuclear power generation
units, responding to competition brought by industry
deregulation, and fostering innovation, and I decided
it was time to place the charting of our management
course in new hands as we move toward a major growth
stage.
In addition to knowledge, ability, and experience,
President Ikebe has outstanding comprehensive
capacity, including broad vision, a talent for resolute
action, and extensive management expertise. To date
we have spent much time discussing a broad range
of management challenges, and I am confident he
is capable of making rapid, appropriate decisions in
response to our rapidly changing business environment,
as well as further enhancing our corporate value. I will
continue to support the president so that he can fully
leverage his capabilities and demonstrate leadership,
and as chairman of the Board of Directors, I will work to
further strengthen its oversight functions.
To date, President Ikebe has been involved in
formulating the Medium-term Management Policy,
financial objectives, and innovation efforts, and has
helped plot Kyushu Electric Power’s strategic direction.
As chairperson of the Personnel Committee, I believe he
was the right choice to assume position as president.
Moreover, a performance-based stock remuneration
system for directors was adopted this fiscal year
under the new structure. I participated in designing
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Kikukawa
this system as chairperson of the Compensation
Committee; the system links stock remuneration to
the degree of achievement of the 110円 billion financial
objective in consolidated ordinary income. I believe
this system will promote sharing of our corporate value
with shareholders, and will further incentivize the
management team to enhance corporate value and
boost the stock price.
As the incentive to generate profits increases, I
will execute my oversight role as an external director
meticulously, to ensure that the conduct of management
does not stray outside legal or other appropriate limits.
The future of the electric power industry is facing
uncertainty from numerous directions, including new
market entry. The difficult challenges that lie ahead
cannot be met by relying on past experiences of
success. To overcome them will require the company
to understand stakeholder opinion and the needs of a
new era, and to move forward with fresh vision. Kyushu
Electric Power has a mechanism for communicating
investor opinions gathered though IR activities to
the Board of Directors on a regular basis, and this
information is shared with all board members.
As we strive under the new structure to become
a corporate group that provides Japan’s best energy
services while taking into account investor input, I will
do my best to provide the kind of useful advice that my
external perspective makes possible.
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