Corporate Governance

Approach
Policy
Structure

Approach

IHI defines corporate governance as a system that assures sustainable growth and maximization of corporate value by enhancing management efficiency so that IHI can leverage its innate capabilities to the fullest extent possible. To achieve this, IHI targets efficient and appropriate internal decision-making by clearly separating management monitoring and supervisory functions from the business execution function. Furthermore, by establishing the relevant internal rules and building a system to administer them, IHI ensures appropriate operations across the entire Group.
IHI promotes constant improvement of its corporate governance, aiming to earn the trust and support of its shareholders and other stakeholders over the long term.

Policy

IHI will work to enhance its corporate governance in line with the following basic policies set forth by its Board of Directors.

Basic Policy on Corporate Governance

Respect shareholders’ rights and ensure equal treatment
Strive to cooperate appropriately with shareholders and other stakeholders
Fulfill our responsibility to be accountable to stakeholders and ensure transparency by appropriately and proactively disclosing information relating to the Company
Clarify the roles and responsibilities of the Board of Directors, the Audit & Supervisory Board Members and the Audit & Supervisory Board to enable them to adequately fulfill their management monitoring and supervisory functions
Conduct constructive dialogue with shareholders who have investment policies in accordance with the medium- to long-term interests of shareholders

Structure

Corporate Governance Management Structure

Monitoring and Supervisory Structure

Board of Directors

IHI’s Board of Directors makes decisions related to all important matters concerning the management of the Group, in addition to supervising Directors in the execution of their duties. The Board of Directors consists of 12 Directors (including six Independent Directors), and is chaired by the Chairman of the Board. The Independent Directors, who are elected from among individuals with extensive experience and broad insight as management, or with a high degree of specialist knowledge and diverse experience, participate in the Board of Directors’ decision-making process from an independent standpoint, and offer advice and make recommendations to IHI’s management.
The Board of Directors met 18 times in fiscal 2024, with attendance as shown in “Members of the Board of Directors.”

Appointment of Officers—Members of the Board of Directors

Remuneration Advisory Committee

IHI set up the Remuneration Advisory Committee as an advisory body to the Board of Directors.
The Remuneration Advisory Committee ensures the suitability and objectivity of officer remuneration. This six-person committee is made up of three Independent Directors, one Independent Audit & Supervisory Board Member, the Chairman of the Board, and the Representative Director and President, with an Independent Director acting as Chairperson.
The Committee convened seven times with all members present at every meeting in fiscal 2024.

Nomination Advisory Committee

IHI set up the Nomination Advisory Committee as an advisory body to the Board of Directors.
This seven-person committee is made up of the Representative Director and President, and six Independent Directors, with an Independent Director acting as Chairperson for the purpose of ensuring proper implementation of officer appointments.
The Committee convened four times with all members present at every meeting in fiscal 2024.

Business Execution Structure

IHI has an executive officer system to strengthen the oversight and supervision of management by the Board of Directors and to speed up the decision-making process regarding business execution. Executive Officers are appointed by a resolution of the Board of Directors (five of 22 Executive Officers serve concurrently as Directors). The Chief Executive Officer (CEO) manages the duties of the Executive Officers, giving directions and supervision. The Executive Officers follow the CEO’s directions to execute their assigned duties. The CEO also appoints members to the Management Committee to assist in decision-making and business execution.
The Management Committee convened 37 times in fiscal 2024.
IHI has also set up the ESG Management Promotion Committee and the Risk Management Conference, both of which are chaired by the CEO personally. The ESG Management Promotion Committee (convenes at least twice a year) is an organization whose purpose is to consider basic policy and specific measures for ESG management, as well as to evaluate and improve the implementation status. The Risk Management Conference (convenes four times per year) oversees the IHI Group’s risk management and discusses and approves important matters related to overall risk management.
Furthermore, the IHI Group conducts internal audits to support the management activities of the Group and contributes to the sound development of its businesses. IHI’s Internal Audit Division examines and evaluates the suitability and efficiency of operations and management systems, and reports the results to the Board of Directors and the Audit and Supervisory Board.

ESG Management Promotion Committee
Risk Management Conference

Auditing Structure

Audit & Supervisory Board

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.
In order to gain insight into the decision-making process and the status of the Directors’ execution of their duties, Audit & Supervisory Board Members attend important meetings such as the Board of Directors and Management Committee, and express their opinions when necessary.
The Audit & Supervisory Board met 13 times in fiscal 2024, with attendance as shown in “Members of the Audit & Supervisory Board.”

Appointment of Officers—Members of the Audit & Supervisory Board

Accounting Audits

IHI undergoes accounting audits by its accounting auditor, Ernst & Young ShinNihon LLC, to determine whether the financial statements for the fiscal year in question properly present the Company’s assets and profit status.

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