Corporate Governance

As stated in its basic policy on corporate governance, Asahi Glass clearly separates the function of "oversight" and "execution" of management, aiming to reinforce the management oversight function while ensuring quick decision-making in management execution. Under this policy, we have been implementing measures to further improve both our management system and internal control system in order to ensure highly transparent and efficient management.

• Corporate Governance (Corporate Information)

Internal Control

In response to the enforcement of the Companies Act, Asahi Glass decided on its corporate policy over internal control at the Board of Directors meeting held in May 2006, aiming to review its business operation systems, including the compliance system to ensure their appropriateness.
After introducing the internal control reporting system in compliance with the Financial Instruments and Exchange Act, we set the AGC Group Internal Control over Financial Reporting Implementation Regulations. Based on these regulations, we established and have been operating and evaluating our internal control over financial reporting. We have evaluated that the internal control was effective in fiscal 2009 and 2010, and this evaluation is reported to be appropriate by an external accountant.

Basic items for internal control

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Asahi Glass Receives a Prize of Excellence at the Integrity Award 2010 (Japan)

Former Senior Executive Vice President Takashi Matsuzawa makes a speech at the award ceremony

In March 2010, Asahi Glass received a prize of excellence at the Integrity Awards 2010 in recognition of the integrity and transparency of its business management. The Integrity Awards are held by the Integrity Award Council composed of experts and business managers to select and commend companies that have established internal control and compliance systems to implement advanced measures. In 2010, Asahi Glass was highly evaluated among a total of 730 nominated Japanese listed companies because the CEO had been offering integrity-oriented messages and also because the company had continued its compliance activities in a substantial manner even since after the rapid economic downturn.

Risk Management

Based on its corporate policy over internal control, the AGC Group identifies important risk factors and monitors and discusses the state of risk control periodically at meetings of the Management Committee and the Board of Directors.
In identifying important risk factors, we conduct questionnaire surveys across the Group to create risk maps and assess risks. The Management Committee and the Board of Directors then discuss the factors at their meetings, and the related organizations formulate action plans to implement the Plan, Do, Check, and Act (PDCA) cycle for the continuous improvement of their risk control levels.
By implementing risk management measures across the Group, we can raise the risk consciousness of the Group members, enhance the quality of response, and prevent the occurrence of problems, and in the event of their actual occurrence, deal with the problems in a prompt and appropriate manner to minimize their impact.

Risks managed by the entire AGC Group include those related to the following

• Global Legal Management System

Business Continuity Management (BCM)

For important risks factors which might cause large-scale accidents and disasters, the AGC Group is formulating and operating business continuity plans (BCPs). Moreover, through business continuity management (BCM) to maintain and improve BCPs, we are ensuring the implementation of the measures and plans set in the BCPs and evaluating the results. In March 2011, we published the AGC Group Business Continuity Plan Development Guideline to be followed by the In-house Companies and sites of the AGC Group in formulating BCPs in reference to the basic outlines of the measures for each risk factor set by the Group.

Measures for the Pandemic of Influenza

In October 2010, we published the AGC Group Basic Principal to Cope with Pandemic Influenza based on the actual measures taken in 2009 in response to the outbreak of the pandemic influenza, with a view to implementing anti-flu measures flexibly and globally as the entire AGC Group regardless of the virulence.
The AGC Group (Japan) introduced an emergency communication system to confirm the safety of employees and their families and conducted a drill for the system all together in November 2010.

Measures for Natural Disasters

In March 2011 we also published the AGC Group Basic Principle to Cope with Natural Disaster to prepare for natural disasters that might take place in the regions in which we operate. Based on objective reference data, we have specified natural disasters that might hit the regions and implemented measures targeting sites with high risks.
In particular, in Asia including Japan where the risk of earthquakes is very high, many of our sites have already formulated BCPs. Immediately following the Great East Japan Earthquake that took place in March 2011, we formulated a Group headquarters based on the BCPs and each in-house organization played a role in identifying the degree of damage and formulating recovery plans as the entire AGC Group. We will further improve the BCPs of the AGC Group through this experience.

Internal Audits

In the AGC Group, the Internal Audit Office directly managed by the CEO monitors the governance, internal control, and risk management to evaluate the performance levels as an organization independent from business management. The office then makes recommendations for improvement to support a range of business activities. Moreover to ensure that internal control activities are conducted effectively and efficiency in an independent manner, we have adopted a global leader system, in which regional leaders (for Asia including Japan, Europe, and North America) are appointed under a global leader. Based on this system, the regional internal audit teams monitor the in-house organizations in their regions and promote improvements, and the global leader reports the audit results to the CEO of the AGC Group, while also reporting to corporate auditors as required and making regular reports to the Board of Directors. In fiscal 2010, we conducted internal audits on the global common theme of "operating the systems built to ensure compliance with antitrust laws."

The Risk Control Manual

Asahi Glass classified the risks (contingencies) that it might face in its corporate activities into the following four types: (1) terrorism and riots; (2) serious damage caused by earthquakes; (3) serious damage caused by fires, explosions, etc.; and (4) risks associated with other contingencies. Based on this classification, Asahi Glass formulated the Risk Control Manual, and it has been using this manual since 2001.