Summary of JBIC's Corporate Governance
Fundamental Approach to Corporate Governance
JBIC is making efforts to build corporate governance structure in conducting operations with particular attention to integrity and efficiency, as it seeks to fulfill the mission set out under the JBIC Act (Law No. 39, 2012) and realize its corporate philosophy.
Involvement of Japanese Government
As JBIC has its shares wholly owned by the Government of Japan, it is subject to the control of the Japanese government, its sole shareholder. Additionally, it is subject to the national budget passed in the Diet, inspections by the Board of Audit of Japan, by the Competent Minister and by the Financial Services Agency whose inspection is delegated by the Competent Minister.
Supervisory and Evaluation Function and the Conduct of JBIC Operations
To strengthen the supervisory and evaluative function of the Board of Directors as well as conduct speedy and flexible operations, JBIC has established, in addition to the Board of Directors, the Board of Corporate Auditors and other organs required by the Companies Act, the Management Advisory and Evaluation Committee, the Risk Advisory Committee, the Internal Audit Committee and the Executive Committee. Furthermore, a variety of committees were set up by the Executive Committee that delegated specific tasks to them.
- Board of Directors
The Board of Directors consists of 5 members, of which one member is an outside director as set forth in the Companies Act. The external director supervises the conduct of JBIC operations from the point of view of a corporate outsider, apart from representative directors of JBIC. In addition, he contributes to improving the governance of JBIC as a member of the Management Advisory and Evaluation Committee as well as the Risk Advisory Committee.
- Board of Corporate Auditors
The Board of Corporate Auditors consists of 3 auditors, of which two are outside corporate auditors, as set forth in the Companies Act. Outside corporate auditors contribute to improving the governance structure of JBIC, as they cooperate with the full-time auditor in auditing the conduct of its operations. As a section helping them execute their responsibilities, there is the Office of Corporate Auditor.
- Management Advisory and Evaluation Committee
The Management Advisory and Evaluation Committee consists of 3 to 7 external experts and the outside director. They make assessment and offer advice on the matters referred to them by the Board of Directors pertaining to the business operations and management of JBIC.
- Risk Advisory Committee
The Risk Advisory Committee consists of 3 to 7 external experts and the outside director. They offer advice on the matters referred to them by the Board of Directors pertaining to risk management and assessment framework associated with large-lot obligors and risk exposure to large-scale projects.
- Internal Audit Committee
The Internal Audit Committee consists of representative directors and the outside director. They make decisions and deliberations concerning important matters pertaining to internal audit, as delegated by the Board of Directors.
- Executive Committee
The Executive Committee consists of representative directors, executive director and all the managing executive officers. They make decisions and deliberations concerning important managerial matters, thereby taking responsibility for conducting flexible JBIC operations, as delegated by the Board of Directors. Certain decisions such as financing to a specific project are delegated to the following committees.
- Credit Committee
The Credit Committee makes decisions and deliberations concerning important matters on loan, guarantee and equity participation by JBIC, as delegated by the Executive Committee.
- Corporate Risk Management Committee
The Corporate Risk Management Committee makes decisions and deliberations concerning important matters pertaining to the corporate risk management of JBIC, as delegated by the Executive Committee.
- Compliance and Customer Protection Management Committee
The Compliance and Customer Protection Management Committee makes decisions and deliberations concerning important matters pertaining to the compliance and customer protection management of JBIC, as delegated by the Executive Committee.
- Personnel Committee
The Personnel Committee makes decisions and deliberations concerning important matters pertaining to the personnel of JBIC, as delegated by the Executive Committee.
- Preliminary Credit Committee
The Preliminary Credit Committee makes deliberations concerning important matters pertaining to assessment policies toward loan, guarantee and equity participation and credit policy toward large-lot debtors, as delegated by the Executive Committee.
- ALM Committee
The ALM Committee makes deliberations concerning important matters pertaining to the asset-liability management (ALM) of JBIC, as delegated by the Executive Committee and the Corporate Risk Management Committee.
- Global Head Committee
The Global Head Committee makes deliberations concerning cross-cutting matters among internal groups, including operational policy for each country or region, as delegated by the Executive Committee.
- BCP Committee
The BCP Committee makes deliberations concerning enhancement of JBIC’s business continuity plan (BCP) to be carried out upon the occurrence of large-scale disasters, as delegated by the Executive Committee.
- ICT Promotion Committee
The ICT Promotion Committee makes deliberations concerning matters for achieving an effective, efficient, and steady ICT (information and communication technology) when carrying out various measures required for the ICT plans and policies which had been determined by the Board of Directors and Executive Committee, as delegated by the Executive Committee.
- Information Security Committee
The Information Security Committee makes deliberations concerning important matters pertaining to the use and management of JBIC's information assets, as well as information security, as delegated by the Executive Committee.
- Credit Committee
Mission/Sector-Specific Group Structure
JBIC reconstituted its organization and adopted mission/sector-specific group structure. Its objective is to strengthen the capacity to formulate projects by bringing together knowhow and expertise in each sector and area, thereby facilitating JBIC to perform the functions in its mission more flexibly and strategically.
Specifically, Corporate Group; Energy and Natural Resources Finance Group; Infrastructure and Environment Finance Group; Industry Finance Group; Equity Finance Group and Credit Assessment, and Systems Group were set up, with each Group having departments with special expertise.
For each Group, the responsible board member is appointed, and the managing director or a managing executive officer performs as Global Head of each Group. Each Group is managed in an integral manner under the Global Head of the Group in an effort to conduct speedy, flexible and efficient operations.
Fundamental Policy on Internal Control
Pursuant to the Companies Act, JBIC has put in place an institutional structure, including internal regulations, to ensure the proper conduct of its operations and activities, based on the Principal Policy on Internal Control decided by the Board of Directors.
As a policy-based financing institution conducting international operations, JBIC is keenly aware of public missions and social responsibilities called for in the international community and in civil society. It is also well recognized that any act in violation of laws or regulations by its management and staff will lead to denigrating confidence in JBIC as a whole and cause materially adverse effect on its operations. Being attentive to these needs, JBIC is constantly striving toward compliance with the relevant laws and regulations and operational integrity.
JBIC makes positive efforts, primarily by the Compliance and Customer Protection Management Committee, to improve compliance and has established the Legal Affairs and Compliance Office as an integrated compliance management unit.
Each Group and overseas representative office serving as regional headquarter have a General Compliance Officer while each department and overseas representative office have a Compliance Officer for making positive efforts for compliance, such as fostering awareness on compliance among JBIC employees.
In addition to the reporting procedures in the ordinary line of business, JBIC has put in place and is properly operating an internal reporting system such that it is capable of finding a significant fact concerning compliance at an early stage and taking appropriate remedial action.
JBIC recognizes the importance of risk management and has put in place specific risk management systems in accordance with the type of risks to be identified in conducting operations as well as an integrated corporate risk management system. For the operation of these systems, JBIC has assigned individual officers responsible for specific risk management as well as units supervising specific risk management. JBIC has also established the Corporate Risk Management Committee, chaired by the Governor, to discuss and study the effective functioning of integrated corporate risk management. Further, there is the ALM Committee, chaired by the Global Head of the Group responsible for the corporate risk management, to deliberate on asset and liability management.
JBIC has also sustained efforts to improve its crisis management system by laying out in advance internal rules regarding crisis management in preparation for natural disasters and the occurrence of other crisis situations. As a result, in the case where the occurrence of a crisis situation hinders or threatens the conduct of normal operations, JBIC will set up the crisis control headquarters, if necessary, in accordance with the internal rules on crisis management and respond quickly and efficiently to restore its operations.
As an internal control system for overall operations, JBIC has appropriate internal audit procedures to review as well as evaluate their appropriateness and effectiveness and make recommendations to improve them. For these purposes, JBIC has the Internal Audit Committee, which includes the outside director, as a decision-making body independent of the Executive Committee that is responsible for conducting operations. There is also the Internal Audit Department independent of the line departments and directly reporting to the Governor.
The Internal Audit Department exchange relevant information and cooperates with Corporate Auditors and an Accounting Auditor for executing efficient internal audit.