Company Profile

Corporate Governance

At JR Central, we are striving to develop corporate governance in order to ensure sound, efficient and transparent management, to develop the corporation over the long-term, and to continually improve corporate value.

Overview of Corporate Governance

The Board of Directors of JR Central is comprised of 23 members (three of whom are external directors). We also employ an auditor system comprised of five auditors (three of whom are external auditors). (these numbers are as of June 22, 2010)
The Board of Directors meets once a month or more, makes legal and appropriate decisions upon fully discussing issues stipulated by the law and issues of importance to management, and monitors the status of directors' management.
We also have established an executive board to fully discuss important issues related to management in advance of the Board of Directors meeting. Furthermore, in an effort to clarify the roles of the Board of Directors that is responsible for management decisions and supervising management, and corporate officers that are responsible for operation, in May 2003 we introduced a corporate officer system in an effort to quickly promote decisions by the Board of Directors and develop discussion.
Auditors attend important meetings such as the Board of Directors meeting and executive board meetings and strive to ensure the legality of management plans from the discussion process along with implementing inspections of measures conducted at JR Central's headquarters, railway operations divisions, regional offices, field offices and subsidiaries to check the status of management based on plans enacted by the Board of Auditors. We also consolidate the system to ensure an effective audits by auditors including assigning our employees as full-time staff to support auditors' work.
Internal audits are performed by the Audit Department on the work of JR Central, its subsidiaries, and related companies to determine whether such work is legal and appropriate based on laws, the articles of incorporation, and internal regulations, the results of which are reported to management. In addition, in order to prevent operational and labor accidents, safety audits are performed by the Transportation Safety Department and the results are reported to management.
We also undergo appropriate accounting audits based on generally accepted accounting standards by the audit corporation Deloitte Touche Tohmatsu LLC, which has been selected to be our auditor.
Auditors, internal audit departments, and accounting auditors cooperate with each other by exchanging information periodically and as necessary, and receive necessary information from each department involved in internal control in order to confirm the status of implementation of each item stipulated in the internal control basic plan.

JR Central's Corporate Governance

Fundamental Corporate Governance Policies

At JR Central, the Board of Directors has decided on the following fundamental corporate governance policies.

System to ensure that the execution of duties by directors and employees is in accordance with laws and the articles of incorporation

The Board of Directors monitors the status of director management along with making legal and appropriate decisions upon fully discussing issues stipulated by the law and issues of importance to management.
The department in charge of internal audits performs internal audits of the work of directors, corporate officers and employees to determine whether such work is legal and appropriate based on laws, the articles of incorporation, and internal stipulations.
A system to obtain advice as necessary from external experts, such as retained lawyers, is in place and we strive to ensure that operation is carried out legally.

System related to storing and managing information concerning the execution of duties of directors

Those documents for which a storage need has been determined in accordance with internal regulations are properly stored and managed.

Stipulations and systems related to managing the danger of loss

Decisions made in regards to items for which each department is responsible are processed as stipulated in accordance with their importance, such as by seeking approval by upper managers and/or through meetings.
In addition, in regards to preventing train accidents, effective countermeasures are actively promoted through discussions by Railway Safety Promotion Committees.

System to ensure that the duties of the director are executed efficiently

An efficient work system is introduced by clearly stipulating the duties of each department and its authority in accordance with internal regulations, and by properly assigning personnel in accordance with the task and work load.

System for ensuring the suitability of work performed by corporate groups comprised of JR Central and subsidiaries

In accordance with internal regulations, we manage and provide guidance for affiliated companies as needed based on agreements signed with these companies that stipulate how important items are to be discussed and reported.

System related to employees that have been assigned to auditors at their request to assist with the auditor's duties and matters related to the independence of those employees from directors

Some of JR Central’s employees will be designated as auditor staff for the purpose of assisting such auditor with the execution of their duties.
The Personnel Department shall hear the opinions of auditors in advance in regards to auditor staff personnel.

System to enable directors and employees to report to an auditor, and other systems for reporting to auditors

If directors, corporate officers, or employees discover facts that may cause great loss to the Company or important facts that infringe upon laws or the articles of incorporation, in accordance with internal regulations they must immediately report to an auditor or the Board of Auditors.
Furthermore, directors, corporate officers, and employees shall report on the execution of their duties if requested by an auditor or the Board of Auditors.

Other systems to ensure that audits of auditors are performed effectively

Auditors shall attend important meetings such as executive board meetings in addition to Board of Directors meetings to ensure that the process of deliberation of management issues is conducted legally.
The department in charge of internal audits shall strengthen its links with auditors and accounting auditors in an effort to enhance audits.

Risk-management System

At JR Central, we have established "Railway Safety Promotion Committees" at headquarters, railway operation divisions, regional offices and in each area in order to establish and promote safety countermeasures through an integrated organization that stretches from headquarters to each field office from the perspective of preventing train and labor accidents.
Furthermore, along with having an emergency response center on call 24 hours a day at each railway operation division in order to deal with emergencies such as accidents or disasters, we have also created a fast-response restoration team that can be called in at anytime according to the scale and impact of an accident or disaster. Also, in preparation for emergencies such as large-scale natural disasters, we have established the Shinkansen 2nd General Control Center that can assume the tasks of the Shinkansen General Control Center.

Dealing with Internal Control related to Financial Reporting

In addition to building and operating a system based on the internal control basic plan mentioned above, we periodically investigate the system and enforcement by JR Central and the JR Central Group in accordance with a basic framework put forth by the Business Accounting Council and confirm that they are valid. Furthermore by providing feedback, we are engaged in efforts to maintain the level of internal control related to financial reporting.

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