Corporate Governance

Management Monitoring System / Audits by Audit & Supervisory Board Members

Management Monitoring System

Our company's internal control system is based on the supervision by the Board of Directors, audits by Outside Directors and Independent Outside Audit & Supervisory Board Members, and accounting audits, as well as the effective functioning of the 3 defense lines under the direction of execution (under President and Representative Director). (1) Each department controls risks by incorporating self-management into daily operations, and ensures the legality of operations. (2) The management division supports the division in each specialized field and monitors the status of self-management. (3) We have established an "Internal Audit Department" under the direct control of the President and Representative Director, and its staff implement "Internal Audits" and "Assessment of Internal Control over Financial Reporting (J-SOX)" from an independent and objective standpoint. The Internal Audit Department conducts internal audits of domestic and overseas offices and affiliated companies. In this way, the effectiveness of internal controls in each division is evaluated, and the results are reported to the President and Representative Director, Audit & Supervisory Board Members, division heads, and relevant executives. The departments that receive advice and proposals for improvement systematically make improvements, and the Internal Audit Department conducts follow-up audits as necessary.

Departmental Training on Internal Audit; Aiming for a Stronger Corporate Governance

On February 6, 2020, Internal Audit Department held ‘The Second Departmental Training on Internal Audit’ at our head office in Marunouchi, Tokyo, and audit managers from 10 affiliated companies participated in the training. Every department is required to strengthen internal control for compliance and risk management. Internal Audit Department at the head office designed such training and audit quality improvement support so that the auditors at each (affiliated) company can acquire specialized skills as early as possible and contribute to strengthening our corporate governance.

Internal Audit Departments of Nine Affiliated Companies Share Their Initiatives

On July 12, 2019, Idemitsu Kosan held a training meeting for the internal audit departments of nine affiliated companies. After sharing information regarding each company’s internal audit system and current challenges, the participants actively exchanged opinions on Idemitsu Kosan & Showa Shell post-merger internal audit system and audit areas to be focused on. Through the training, the nine affiliated companies established closer cooperation with each other.

出光興産, DFF Inc.

Audits by Audit & Supervisory Board Members

Audit & Supervisory Board Members (4 people) attend meetings of the Board of Directors and audit business reports, financial statements, and consolidated financial statements that are submitted to the annual general meeting of shareholders.
They also audit the execution of business operations by Directors on a daily basis. Full-time Audit & Supervisory Board Members attend important internal meetings, such as those of the Management Committee, and meet with department heads, overseas store managers, and the presidents of subsidiaries. Part-time Audit & Supervisory Board Members strive to enhance auditing by visiting key departments. As a general rule, we hold quarterly meetings with the representative director to discuss issues.
出光興産, DFF Inc.