Audit & Supervisory Board Activities | Corporate Governance | Governance | Sustainability | IHI Corporation

Approach

IHI has an Audit & Supervisory Board, which comprises five Audit & Supervisory Board Members (three of whom are Independent Audit & Supervisory Board Members) who audit the duties executed by Directors.
The Audit & Supervisory Board and its members conduct audits based on an annual audit plan with the objective of establishing a sound corporate governance system that enables the IHI Group to achieve sound and sustainable growth, create corporate value over the medium to long term, and fulfill its responsibilities to society.

Policy

The Audit & Supervisory Board conducted audits based on the following key audit items established in fiscal 2025 Audit & Supervisory Board audit plan.

Key Audit Items for FY2025

Key Audit Items	Key Points for Audit Review
(1) Thorough compliance with important laws and regulations	Reinforcement of compliance with laws and regulations and establishment of mechanisms to identify and address potential risks proactively Investigation and response through the internal whistleblowing system (Compliance Hotline), addressing root causes, providing education, and sharing case studies across the Group
(2) Rebuilding the internal control system	Embedding of the Three Lines Model^* structure, together with its effectiveness and the effective fulfillment of the roles and responsibilities of each line Strengthening economic security and information security, and providing related education Three Lines Model: A framework for organizational risk management and control activities, consisting of the first line (business divisions), the second line (risk management divisions), and the third line (internal audit divisions).
(3) Further strengthening of the risk management and project execution structures	Planning and implementation of risk management activities, primarily led by the second line Execution of measures to prevent recurrence of misconduct and other inappropriate incidents Advancement of risk management in growth and development-focus businesses
(4) Completion of the Group Management Policies 2023 and formulation of the next management policy	Alignment of initiatives in each division with company-wide objectives, and their appropriate deployment and monitoring Restoration of profitability in conventional businesses and execution of Group company reorganization, etc. based on business portfolio analyses Continuous promotion of company-wide cash generation initiatives Implementation of measures to foster employee understanding of and commitment to the next management policy
(5) Group companies requiring close monitoring of business performance	Initiatives to improve profitability and business performance at Group companies requiring close management monitoring
(6) Completion of the Group Human Talent Strategy 2023, elimination of occupational accidents, and thorough support for resource shifts	Development and acquisition of talent capable of driving transformation and initiatives to address challenges related to DE&I Embedding and institutionalization of hazard management, and its practical application in day-to-day operations Readiness of receiving organizations and post-transfer integration of personnel reassigned to growth businesses through resource shifting
(7) Creating a workplace where employees feel empowered to speak up and continuously driving transformation, while enhancing employee engagement	Implementation of the IHI Group transformation initiatives designated as a company-wide priority for FY2025 Realization of a workplace culture where employees feel empowered to speak up Effective utilization of employee engagement survey results

Initiatives

The following activities were conducted in accordance with the fiscal 2025 Audit & Supervisory Board audit plan established by the Audit & Supervisory Board.

●Conducted based on the respective roles between Standing Audit & Supervisory Board Members and Independent Audit & Supervisory Board Members　■Conducted by the Audit & Supervisory Board

Area	Overview of FY2025 Audit & Supervisory Board Activities	Standing Audit & Supervisory Board Members	Independent Audit & Supervisory Board Members
(1) Directors	Attendance at Board of Directors meetings	●	●
	Exchange of views with the Representative Director and President	● (monthly)
		■ (twice a year)
	Exchange of views with Independent Directors	●	●
	Meetings and interviews with Representative Directors and Directors	●
		■ (once a year)
(2) Business Execution	Attendance at important meetings, including Management Committee meetings	●
	Regular meetings with designated compliance divisions	● (monthly)
	Regular meetings with the designated occupational safety divisions	● (monthly)
	Exchange of views with Executive Officers and division heads	● (twice a year)
		■ (once a year)
	Review of important approval documents and minutes of important meetings	●	●
(3) Group Companies	Audits and site visits to Group companies in Japan (18 companies)	●	●
	Audits and site visits to Group companies overseas (5 companies)	●	●
	Liaison meetings with Standing Audit & Supervisory Board Members of Group companies in Japan/overseas (15 companies)	● (twice a year)
	Liaison meetings with part-time Audit & Supervisory Board Members of Group companies in Japan/overseas (33 companies)	● (once a year)
	Liaison meetings with presidents and other executives of regional headquarters companies (3 companies)	● (twice a year)
	Plenary liaison meetings between the Audit & Supervisory Board and Audit & Supervisory Board Members of Group companies	■ (twice a year)
(4) Internal Audit	Regular meetings with the Internal Audit Division	● (monthly)
(4) Internal Audit	Reports from the head of the Internal Audit Division on audit plans, progress, and audit results	■ (quarterly)
(5) Accounting Audit	Regular meetings with the Accounting Auditors	● (monthly)
(5) Accounting Audit	Reports from the Accounting Auditors on audit plans, interim audit reviews, and audit execution results	■ (quarterly)

IHI Group Audit & Supervisory Board Members Liaison Meeting

The IHI Group holds the IHI Group Audit & Supervisory Board Members Liaison Meeting once a year with the aim of strengthening Group governance and promoting collaboration among Audit & Supervisory Board Members. In FY2025, the meeting was held in August and was attended by 50 Audit & Supervisory Board Members from Group companies, as well as three Independent Audit & Supervisory Board Members of IHI.
In addition to sharing the IHI Audit & Supervisory Board's audit plan and other information, Kazuhiro Muto, an Independent Audit & Supervisory Board Member, delivered a presentation on DE&I. During the presentation, examples of initiatives by leading companies were introduced, conveying a strong message that innovation can be fostered by embracing, appreciating, and leveraging the diversity each individual brings.

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