Corporate Governance

As stated in its basic policy on corporate governance, Asahi Glass clearly separates the function of "oversight" and "execution" of management, aiming to reinforce the management oversight function while ensuring quick decision-making in management execution.
Under this policy, we have been implementing measures to further improve both our management system and internal control system in order to ensure highly transparent and efficient management.

• Corporate Governance(Corporate Information)

Internal Control

In response to the enforcement of the Companies Act, Asahi Glass decided on its corporate policy over internal control at the Board of Directors meeting held in May 2006, aiming to review its business operation systems, including the compliance system (see page 20) based on the policy, to ensure their appropriateness.
After introducing the internal control reporting system in compliance with the Financial Instruments and Exchange Act, we set AGC Group's rules for internal control over financial reporting. Based on these rules, we proceeded with the documentation of process-level controls over financial reporting, identification of risks and organization of controls, and assessment of the implementation of controls. We then started the full implementation of internal control over financial reporting in fiscal 2009.

Basic items for internal control

Risk Management

Based on its corporate policy over internal control, AGC Group identifies important risk factors and monitors and discusses the state of risk control periodically at meetings of the Management Committee and the Board of Directors.
In identifying important risk factors, we conduct questionnaire surveys across the Group to create risk maps and assess risks. The Management Committee and the Board of Directors then discuss the factors at their meetings, and the related organizations formulate action plans to implement the Plan, Do, Check, and Act (PDCA) cycle for the continuous improvement of their risk control levels.
By implementing risk management measures across the Group, we can raise the risk consciousness of the Group members, enhance the quality of response, and prevent the occurrence of problems, and in the event of their actual occurrence, deal with the problems in a prompt and appropriate manner to minimize their impact.

Risks managed by the entire AGC Group include those related to the following

• Global Legal Management System

Business Continuity Management (BCM)

For important risk factors which might cause large-scale accidents and disasters, we are implementing measures to formulate and operate business continuity plans (BCPs). Specifically, we are taking countermeasures against the new type influenza and natural disasters such as earthquakes.

• Risk Reduction Based on BCM

Internal Audit

AGC Group has established a global internal audit system to manage its organization in Asia including Japan, Europe, and North America. Through this system, independent monitoring is conducted on internal control and risk management measures implemented throughout the Group's organizations in the regions to ensure the effectiveness and efficiency of the measures.
Under this system, the audit departments in each region monitor the progress made in establishing systems of internal control and risk management within their regions, and the legality and rationality of the implementation of the above systems for further improvement.
The internal audit results are reported to AGC Group's CEO as necessary as well as its Board of Directors on a periodic basis.

CSR Promotion System

CSR Committee

AGC Group established its CSR Committee in 2005. This Committee, which serves as an organization to lead the fulfillment of CSR by the Group, is chaired by the CEO and composed of the CTO, CFO, and the heads of the in-house organizations. It discusses the Group's CSR-related policies and issues. In fiscal 2009, the Committee held four meetings to discuss these matters and monitor the CSR activities conducted by the in-house organizations. Moreover, we hold monthly meetings of the employees actually engaged in CSR at each organization, where attendees discuss the measures needed to solve specific issues.
In addition, the Group Corporate CSR Office, which is led by a dedicated executive officer, serves as the secretariat for the Committee and its monthly meetings, while taking charge of CSR activity planning and CSR communications for the entire Group.

AGC Group's PDCA Cycle for CSR Activities

Topic
Obtaining CSR-Related Certification from the Industrial Development Bureau of the Ministry of Industry (Thailand)

Award ceremony for the CSR-related certification

AGC Flat Glass (Thailand) Public (AFT), which manufactures and sells various float glass, has long been conducting community relations activities. Specifically, AFT began granting scholarships in 1974 and started providing support to build schools in 1980. In recent years, it has also been engaged in forestation activities and educational support activities in cooperation with the government, NGOs, local citizens, and other corporations.
In order to propel these activities and to fulfill its social responsibility even more, AFT started to build a management system in reference to the draft international standard on CSR (ISO 26000) in April 2009. Subsequently, in September of the same year, the company obtained certification for the system from the Industrial Development Bureau of the Thai Ministry of Industry. This standard deals with all the aspects of corporate activities and is related to all company stakeholders. It simultaneously means to disclose the wide range of internal and external commitments.
About 500 people participated in the certification award ceremony, which was introduced to people across the country through TV news and the website of the Ministry of Industry. The final version of ISO 26000 will come into force at the end of 2010. AFT will improve its CSR activities through this standard even more to contribute to the creation of a better society.