In fiscal 2022, we worked to strengthen our corporate governance system by developing various policies and implementing measures based on Japan’s revised Corporate Governance Code. Going forward, we will continue to revise our policies and systems when deemed necessary to ensure that we deliver effective corporate governance that reflects social demands and the environment surrounding the Company.
The Cosmo Energy Group Management Vision is, “In striving for harmony and symbiosis between our planet, man and society, we aim for sustainable growth towards a future of limitless possibilities.” We pursue management transparency and efficiency, prompt execution of business, and thorough risk management and compliance based on the Cosmo Energy Group Code of Conduct, which serves as a specific guideline for implementing and achieving the Management Vision, and other Cosmo Energy Group’s policies, which serve as the general principles for implementing the Code of Conduct and executing business appropriately.
We have also established the Basic Policy on Corporate Governance to ensure transparent, fair, prompt, and decisive decision-making, and we strive continuously to enhance and strengthen corporate governance.
Internal Control System
Governance System (Internal Control) Promoting Sustainability
In fiscal 2022, the Sustainability Strategy Committee reported to the Board of Directors on important matters regarding the operational status of the internal control system twice, on June 23, 2022 and December 20, 2022. This information was also reported to Group companies at the Sustainability Liaison Committee to ensure the practice of effective Group-wide governance by sharing information.
In order to implement the Group Management Vision and the Code of Conduct and to execute duties appropriately and efficiently, the Cosmo Energy Group has established a system of execution of duties by the directors and employees of Cosmo Energy Holdings and its Group companies, the system of risk management and internal audit supporting such execution, and a system to ensure that audits by the Audit and Supervisory Committee are conducted effectively.
To fulfill its Management Vision, the Group has established the Cosmo Energy Group Code of Conduct and strives to ensure ethical corporate conduct based on the spirit of compliance.
We develop and operate a system for risk management and internal auditing supporting such execution and a system for ensuring effective audits by the Audit & Supervisory Committee in order to implement our Management Vision and Code of Conduct and to ensure duties are executed appropriately and efficiently, in accordance with the Basic Policy on Internal Control System (Japanese).
In April 2021, we established a Sustainability Strategy Committee chaired by the Group CEO to serve as the organizational structure overseeing activities related to sustainability and internal control.
The Sustainability Strategy Committee is composed of Cosmo Energy Holdings officers and the general manager of the Corporate Planning Department, as well as CEOs and planning department heads from the core operating companies The Audit and Supervisory Committee members also attend meetings as observers. The committee evaluates the results of the Consolidated Medium-Term Sustainability Plan (currently the results of ESG activities in the consolidated medium-term management plan) and reports important matters to the Board of Directors.
In addition, the Sustainability Committee headed by the general manager of the Sustainability Initiative Department meets as necessary, functioning as the practical working body of the Sustainability Strategy Committee.
In fiscal 2022, the Sustainability Strategy Committee met five times and discussed 14 agenda items, of which 9 were reported to the Board of Directors for deliberation and further discussion.
Initiatives to Strengthen the Corporate Governance System
In April 2021, we identified our most important material issues, including “ethics and integrity,” “risk management,” and “compliance,” which were classified as “Material issues that form the foundation of business continuity.” These issues were purposefully incorporated into our governance categories as the foundation for enhancing enterprise value from a perspective that differs from the traditional corporate governance perspective, and under the Consolidated Medium-Term Sustainability Plan (FY 2018-2022), we pursued stronger compliance by setting goals and KPIs.
Fiscal 2022 Results and Evaluation of Initiatives under the Consolidated Medium-Term Sustainability Plan (FY2018-2022)
| Theme | Main activity measures / targets | FY2022 results | Score |
|---|---|---|---|
| Risk management | Select priority risks and enhance measures to address them |
| ー |
| Compliance | Strengthen initiatives to prevent misconduct |
| C |
| Sustainable procurement | Apply Sustainable Procurement Policy |
| ー |
| Information disclosure | Respond to ESG evaluations (investors, shareholders, and consumers) |
| B |
Scores (compared to Medium-Term Management Plan targets) = A: Progress according to plan; B: Some progress delayed; C: Not achieved; －: Not applicable