TEL uses the Audit & Supervisory Board System, which consists of a Board of Directors and an Audit & Supervisory Board. Effective governance is achieved based on the supervision of management by the Audit & Supervisory Board.
Furthermore, in addition to the Board of Directors, whose role is to make major operational decisions, play a supervisory role in the executive management’s execution and support appropriate risk-taking by them. TEL has also established systems that will facilitate growth-oriented governance directed at sustainable growth for TEL, including the following:
・The Nomination Committee and Compensation Committee to ensure fair, effective, and transparent management
・The Corporate Senior Staff (CSS) as the body that formulates and advances company strategy
・The Business Execution Meeting, to play a role in deliberations of the executive management
Seven out of the 17 participants in the Board of Directors, including Audit & Supervisory Board Members, are outside members, consisting of four Independent Directors and three Outside Audit & Supervisory Board Members. Stating their unreserved opinions from an independent perspective, Independent Directors and Independent Outside Audit & Supervisory Board Members guide Board of Directors debates in the proper direction for success in global competition that does not follow the same line of discussion proposed by internal Corporate Directors. TEL regards, in order to make the best decisions at the Board of Directors, the active advice and questions from the perspective of Independent Outside Directors and Audit & Supervisory Board Members on the explanations and remarks from the business execution side will be the cornerstone. TEL believes that an appropriate sense of productive tension and constructive debate are essential for business execution decisions and supervision. Then they are achieved by the combined the perspective of executive directors familiar with the business, and the perspective of non-executive directors including outside members in the current Board of Directors meetings.
TEL makes decisions the independence of Independent Directors and Independent Audit & Supervisory Board Members based on TEL's criteria for judging independence, "Independence Requirements for Outside Directors and Outside Audit & Supervisory Board Members"; these criteria that were established based on the requirements for Independent Standards set forth by the Tokyo Stock Exchange.