Corporate governance

Based on the basic principles of management contained in The Analects and the Abacus (Ethics and Economics), Shimizu strives to manage the company in a highly timely, efficient, transparent, and lawful manner to achieve sustainable growth and increase corporate value over the medium and long-term, while also earning a greater degree of trust from our shareholders and investors, and all other stakeholders, including customers, employees, and local communities. We do so by fulfilling our social responsibilities through business activities.

To achieve this, Shimizu has established a structure that enables the Board of Directors and Audit and Supervisory Board to appropriately supervise and audit the performance of duties by executive officers, based on separation of the management strategy decision-making function from the execution of duties function. Our basic policy on corporate governance is for our directors, executive officers, audit & supervisory board members, and employees to implement compliance management based on high ethical standards.

1.Corporate Governance Structure of Shimizu Corporation

Diagram of Corporate Governance Structure
Diagram of Corporate Governance Structure

2.Management Decision-making & Executive, and Supervisory & Audit Functions

  • Shimizu’s governance structure is based on the separation of strategic decision-making and management supervisory functions from the business execution function. We have introduced an executive officer system and reduced the number of directors. We also established an Executive Nominating Committee and an Executive Compensation Committee that mainly consist of outside directors and other non-executive directors to ensure fairness and transparency in appointment, dismissal, evaluation, and compensation of directors and executive officers.
  • Shimizu forms various committees and meeting groups to ensure efficient decision-making on matters of importance concerning the execution of duties, strategy, and other matters.
  • Two external directors (one of whom is female) have been appointed to strengthen management supervision function, and to promote more active debate by the Board of Directors.
  • Shimizu has established the following Standards on the Independence of External Officers (External Directors and External Audit & Supervisory Board Members).

See the report disclosed to Tokyo Stock Exchange, Inc. for further details.

3.System of Internal Controls

Shimizu has established a Basic Policy on Establishment of Internal Controls, based on the Companies Act.

4.Corporate Ethics and Compliance with Laws and Regulations

  • The Analects and the Abacus contain the basic principles of management at Shimizu. The thought process behind this is to earn a fair profit while also contributing to society by engaging in corporate activities that are ethically sound.
  • These are timeless principles that endure through the ages. As society changes and imposes stronger demands on companies to be good corporate citizens and exercise corporate social responsibility, Shimizu works to make sure that management and employees fully understand these principles and act accordingly each day, through compliance with corporate ethical standards.
  • In order to ensure compliance management based on high corporate ethical values, the Board of Directors established the Code of Corporate Ethics and Conduct. Based on the Code of Corporate Ethics and Conduct, we conduct an annual compliance training for all Shimizu employees on topics including fair bidding practice (including compliance with anti-trust laws); prevention of a comprehensive range of corruption issues including bribery and accounting fraud; human rights; labor standards; environmental regulations.

Compliance Training

Training method e-learning (approx. 10-15 minutes per course), group training, legal newsletters, etc.
Training frequency Compliance overview e-learning, every year (three times a year, including specific topics)
Training content Observing fair bidding practices (compliance with anti-trust laws, etc.), Prevention of a comprehensive range of corruption issues including bribery and accounting fraud, human rights, labor conditions, environmental regulations, information security, etc.
Attendance rate all employees, 100% (compliance overview e-learning)

Internal Whistleblowing System

Shimizu has established an internal whistleblowing system in order to detect compliance incidents such as bribery and accounting fraud as early as possible and improve the company’s ability to take corrective actions.

Overview of Whistleblowing System

Who can use the system
  • Shimizu officers, employees, temporary employees, employees seconded from other companies, etc.
  • Subsidiary officers and employees
  • Officers and employees of subcontractors and suppliers
Contact for reporting Shimizu Corporate Ethics Helpline, Affiliated Business Department of the Corporation, Counselor, External Law Firm, etc.
Protection of whistleblowers Shimizu has established rules to guarantee that a whistleblower will not be subjected to disadvantageous treatment from having blown the whistle on a compliance problem.