Corporate governance

Corporate governance

The detail about Corporate Governance are disclosed on the Company’s website (INTEGRATED REPORT).

Corporate Governance Concept Diagram

<Basic views>

The Company aims to achieve sustainable growth of its business and growth in corporate value over the medium to long term by making transparent, fair and prompt decisions to address its challenges, such as gaining greater trust from customers based on ultimate safety levels and realizing affluent lives for everyone and also by making efforts to achieve appropriate collaborations with its stakeholders, including shareholders, customers, local communities, business partners, creditors and individuals working in the Company and its group companies (the “Group”).

East Japan Railway Company Corporate Governance Guidelines (jreast.co.jp)​

Corporate Governance Report (jreast.co.jp)​

<Overview of System>

  1. 1) Board of Directors
    The Board of Directors of the Company consisting of 16 directors including 8 outside directors as June 20, 2024 meets once a month in principle to discuss legal matters, basic management policies and strategies for the entire group and important matters for group management. Meetings held in FY2024: 16 times (the attendance rate: 98.7%, outside director Ito attended 14 meetings and outside director Kawamoto 15 meetings, while other directors attended all the meetings). The Board of Directors delegates authority to make decisions on important business execution to the executive directors excluding particularly important matters, receives reports on delegated matters and supervises business operations.
    In addition, the Corporate Planning Committee is composed of inside directors and senior executive officers as specified by the Board of Directors, and holds its meetings once a week as a general rule to discuss matters to be resolved at the meeting of the Board of Directors and other important matters essential to corporate planning. Furthermore, Group Strategy Planning Committee, with inside directors, senior executive officers and related department directors as committee members, has been established for the development of the Group as a whole, and holds its meetings as deemed necessary to discuss important matters for the Group such as formulating and promoting the Group’s business strategies.
  2. 2) Audit and Supervisory Committee meetings
    The Company’s Audit and Supervisory Committee holds its meeting once a month as a general rule. The Audit and Supervisory Committee specifically discusses, among other things, audit policies and procedures, allocation of duties and planning, appropriateness of resolutions of the Board of Directors regarding the systems to ensure the appropriateness of business operations and the status of operation, appropriateness of the accounting auditor’s audit procedures and results. In the current fiscal year, the committee conducted audits with “status of improvement and operation of internal control of the Group” and “commitment to structural reforms toward realizing the Group’s philosophy and “Move Up 2027”” as priority audit items. In conducting audits, the committee receives reports on an audit plan of the Audit Department, which is the internal audit division, and results, and works for effective and efficient audits in cooperation with the department. In addition, each Audit and Supervisory Committee member evaluates the effectiveness of audit activities, and reflects the results in an audit plan for the next fiscal year. As for the appointment, etc. and remuneration, etc. of directors (excluding directors who are Audit and Supervisory Committee members), the Audit and Supervisory Committee shares details of deliberations of the Personnel Deliberation Committee and the Remuneration Deliberation Committee, and forms an opinion.
    In accordance with the policies established by the Audit and Supervisory Committee, each Audit and Supervisory Committee member attended meetings of the Board of Directors and other important meetings, received reports from the directors, employees and others on the performance of their duties, reviewed documents related to important decisions, investigated the status of business and assets at the head office and major business offices, received reports from the accounting auditor on the performance on their duties, discussed key audit matters (KAM) with the accounting auditor, and conducted regular exchange of views, etc. with representative directors and outside directors. Particularly, full-time members of the Audit and Supervisory Committee strove to strengthen audit and supervisory functions of the Audit and Supervisory Committee by attending meetings of the Sustainability Strategy Committee, etc., collecting information from the executive division, and other means. The Audit and Supervisory Committee members also communicated and exchanged information with directors and corporate auditors of Group companies, and received business report from Group companies as necessary.
  3. 3) Outside Directors
    In addition to overseeing the business from an independent perspective, candidates for outside directors (excluding directors who are Audit and Supervisory Committee members) will be appointed with the goal of taking advantage of their significant knowledge and experience in the Company’s business from a variety of areas.
    The Company will appoint candidates for independent outside directors in the interest of business diversity, and the number of independent outside directors will be in principle more than one-third of the total number of directors.
  4. 4) Meetings of the Personnel Deliberation
    To ensure the objectivity and transparency of the decision-making procedures, the Board of Directors will first consult with the personnel deliberation committee consisting of independent outside directors (excluding directors who are Audit and Supervisory Committee members) and other directors (excluding directors who are Audit and Supervisory Committee members) in advance regarding any resolution with respect to a proposal for appointment or dismissal of directors (excluding directors who are Audit and Supervisory Committee members), resolution with respect to the appointment or dismissal of the president and representative director or decision on a succession plan for the president and representative director or any other director (excluding directors who are Audit and Supervisory Committee members), and the personnel deliberation committee will provide a recommendation on the consulted matter from a perspective independent from the Board of Directors.
  5. 5) Meetings of the Remuneration Deliberation
    To ensure the transparency and fairness of the decision-making procedures, the Board of Directors will first consult with the remuneration deliberation committee consisting of independent outside directors (excluding directors who are Audit and Supervisory Committee members) and other directors (excluding directors who are Audit and Supervisory Committee members) in advance regarding any resolution with respect to a proposal for remuneration of directors (excluding directors who are Audit and Supervisory Committee members), and the remuneration deliberation committee will provide a recommendation on the consulted matter from a perspective independent from the Board of Directors.
  6. 6) Accounting Auditor
    As for the accounting audit, KPMG AZSA LLC is engaged as the accounting auditor and performs audit during and at the end of each fiscal year (accounting services provided since 1987). Names of the certified public accountants who performed the audit during the fiscal year ended March 31, 2024 and composition of assistants for the audit are as described below.
    • Names of the certified public accountants who performed the audit: Designated Limited Liability Partner and Engagement Partner: Kazuhiko Azami, Hideki Yoshida, Naoki Saito
    • Composition of assistants for the audit: 20 certified public accountants, 16 persons who passed the certified public accountants examination, 19 other persons

<Measures to ensure due respect to stakeholders>

The Company sets forth due respect to stakeholders in the Mid-term management vision, etc. and have a “Multi-Stakeholder Policy” that outlines our policy on returns to our employees, consideration for our business partners, and other stakeholder-related initiatives.

Multi-stakeholder policy（Japanese Only）​

Internal Control System

<Basic views>

The Company views the internal control system as various measures to appropriately and efficiently pursue the Group’s philosophy and realize the Group’s management vision. The Company will ensure compliance and safety, prevent financial losses, ensure soundness of financial conditions, and promote risk management that reflects consideration of expansion into new businesses, and thereby improve the Group’s value.
The Company undertakes a wide range of risk management efforts not merely to reduce risks (*) of negative elements, such as avoidance of losses, but also to improve the value of the Group including through risk taking among others.
Based on this, we have established the following system to ensure the appropriateness of business operations based on the Companies Act;

* Risks include not only those relating to operation such as compliance, safety and natural disasters, but also those relating to the domestic and international social and economic environment such as changes in market and trends among competitors, and those relating to management decisions on new businesses.

JR East Group's Internal Control System

<Status>

  1. (1) Systems to ensure that Directors and employees of the JR East Group perform their duties in accordance with relevant laws and regulations as well as with the Articles of Incorporation
    • To promote rigorous legal compliance and high corporate ethics standards, the Company and its consolidated subsidiaries (hereinafter Group companies) have drafted “Policy on Legal and Regulatory Compliance and Corporate Ethics,” which serves as corporate action guidelines for the JR East Group, and implement corporate actions in line with such guidelines such as distributing a handbook that explains conduct standards in concrete terms to each corporate officer and employee of the Company and Group companies.
    • The Company’s Corporate & Legal Strategies Department handle overall control over horizontally integrated compliance matters throughout the Company, and liaise with legal and administration departments of the Group companies to ensure compliance in the JR East Group.
    • Units to provide compliance-related advice and receive whistle-blower reports and other reports related to compliance issues as affecting the JR East Group have been established inside and outside the Company. - The Company and Group companies maintain the confidentiality of whistle-blowers and matters reported, and prohibit unfavorable treatment on the basis of any such report.
    • The Company has established an internal audit system to ensure the appropriateness and efficiency of operational execution. In addition, to ensure that all operations throughout the JR East Group are appropriate, the Company participates in the management of Group companies by seconding directors to those companies and by other means. In addition, the Company’s Audit Department performs audits of Group companies at regular intervals.
  2. (2) Preservation and administration systems for information related to Directors’ performance of their duties
    • The Company appropriately preserves and administers documents related to Directors’ performance of their duties in accordance with relevant laws and internal regulations. Directors can view these documents whenever necessary.
  3. (3) Risk management rules and systems of the JR East Group
    • As part of our risk management, we have established a system for managing the risk of loss.
    • With regard to the risk of a significant adverse influence on corporate operations due to changes in the internal and external management environment, such incidents as external offenses or internal scandals and legal violations in the Company and the Group companies, each unit of the Company manages its own risk and the risk of the Group companies which it supervises. In addition, the Company has established a Crisis Management Headquarters as well as crisis management-related internal regulations, so that in the event of a problem, a preliminary task force may be immediately established with the participation of top management and may gather relevant information and rapidly implement countermeasures. In addition, the Company instructs Group companies to establish similar risk management systems and report incidents as necessary to the Company.
    • The Company has established systems to ensure rapid and appropriate responses in the event of an accident or disaster in railway operations and to improve safety and reliability of transportation.
    • To ensure effectiveness of risk management, the Board of Directors of the Company monitors its status and policies periodically.
  4. (4) Systems for promoting efficient performance of duties by directors and other employees in the JR East Group and systems for reporting performance of duties from Group companies to the Company
    • To promote efficiency in the Company’s operations, internal regulations have been established that allocate authority by clearly defining the authority and roles of each unit.
    • To promote the Group management vision, and to attain the vision’s objectives, the Company and Group companies have established action programs for each organizational unit and project. Progress in action program implementation is periodically evaluated as a means of promoting the efficient implementation of strategic measures. In addition, Group companies regularly report to the Company material information, including business results and financial conditions.
  5. (5) Items related to employees who assist the Audit and Supervisory Committee in the performance of their duties
    • Dedicated staff are assigned to the Audit and Supervisory Committee office to assist the duties of the Audit and Supervisory Committee in the performance of their duties. This is a system designed to increase the efficiency of audits, etc. and enable the duties of the Audit and Supervisory Committee to be executed smoothly.
  6. (6) Independence from Directors (excluding Directors who are Audit and Supervisory Committee members) of employees who assist the Audit and Supervisory Committee in the performance of their duties and effectiveness of instructions to such employees
    • The staff of the Audit and Supervisory Committee Office of the Company, with regard to instructions from the Audit and Supervisory Committee, are not subject to orders from Directors (excluding directors who are Audit and Supervisory Committee members) or other employees.
  7. (7) Systems in the JR East Group for reports to the Audit and Supervisory Committee of the Company
    • The Company has established standards for matters to be resolved at the Board of Directors meeting based on the Regulations of the Board of Directors and appropriately submits such matters for resolution. The contents of important items other than those to be resolved by the Board of Directors may also be confirmed by the Audit and Supervisory Committee at meetings of the Board of Directors and meetings of the Corporate Planning Committee to be attended by Directors, who are Audit and Supervisory Committee members, by hearing from Directors (excluding Directors who are Audit and Supervisory Committee members) and employees and by reviewing documents concerning performance of duties by Directors.
    • The Company’s Audit and Supervisory Committee holds informational meetings regularly with corporate auditors of Group companies to share information concerning audits.
    • The Company reports regularly to the Company’s Audit and Supervisory Committee on whistle-blower reports and other matters related to compliance issues of the JR East Group, as well as results of Group company audits conducted by the Company’s Audit Department.
    • The Company prohibits unfavorable treatment of any person who reports to the Auditor and Supervisory Committee based on any such report.
  8. (8) Policies on payment of expenses arising from performance of duties of Directors who are Audit and Supervisory Committee members
    • When the Company’s Director, who is an Audit and Supervisory Committee member, requests advanced payment of expenses arising from performance of his/her duties based on Article 399-2, Paragraph 4 of the Companies Act, the Company shall pay such expense unless the Company establishes that such expense or liability is unnecessary for such performance of duties by such a Director who is an Audit and Supervisory Committee member.
  9. (9) Other systems for promoting the effective performance of the Audit and Supervisory Committee’s audits
    • The Audit and Supervisory Committee of the Company holds meetings regularly with the President and CEO and the accounting auditor to exchange information and opinions.
  10. (10) The Company’s basic views on internal control system over financial reporting are as described below.
    • The Company organizes and operates the system necessary to ensure the adequacy of documents on financial calculation and other information
    • The Company evaluates every fiscal year the status of the organization and operation of the above system using criteria concerning internal controls over financial reporting that are generally accepted as fair and appropriate.

<Skills Matrix of Directors>

Taking into account the skills, expertise and experience of each Director, the "areas we are particularly looking forward to" (top row) and the focus points in those areas (bottom row) are as follows:

Image of the skills matrix for directors

(Note) The above list does not represent all of the expertise and experience of each director.

MComposition of the Board of Directors after this General Meeting of Shareholders (tentative) and areas especially expected (major skills) (jreast.co.jp) PDF opens in a new window

Initiatives for human capital management

<Basic views>

The source of growth of the Group is “human resources.” In the Group Management Vision “Move Up 2027” drawn up in 2018, we set out “creation of value and services with people as the starting point” and put up “happiness of employees and their families” as the center of our focus points to “provide new value to society.” By drawing out the potential of each employee, we steadily inherit and develop technologies and skills, develop human resources, who boldly take on difficult challenges, and increase the employee engagement and the value of human capital.

Promotion of human capital management(Japanese Only)

Implementation of environmental activities, CSR activities, etc.

<Basic views>

Measures for sustainability issues, including response to the TCFD, which is an international framework for disclosures regarding the financial impact of climate changes, and investment in human capital and intellectual property are provided at the Company’s website and “JR East Group INTEGRATED REPORT.” For JR East Group, which has active engagement with its many customers and local communities, we consider issues concerning the environment to be social challenges whose initiatives should be given priority. While carrying out initiatives to address environmental issues as a company from various angles, we actively participate in national and international initiatives and statements concerning environmental areas, and while cooperating with other companies, strive to invigorate climate change measures and realize a sustainable society.

JR EAST Group Report (Integrated Report)

Policy engagement in the environment areas（Japanese Only）

Details of our environmental initiatives and information are disclosed in our Sustainability section.(Japanese Only).

Investment in intellectual property

In order to promote the Group’s management vision “Move Up 2027” and support the respective businesses of mobility and lifestyle solutions, the appropriate management of intellectual property and the execution of intellectual property strategies that are linked to business strategies are important.
The Group appropriately manages our intellectual property which comprises important intangible assets, and promotes intellectual property activities that create value in the form of trust and affluence based on the Group’s philosophy. Specific measures are provided at the Company’s website and “JR East Group INTEGRATED REPORT.”

Research and Development (R&D)

Sustainable procurement

The Group has established procurement policies, etc. as a code of conduct for procurement. Based on this policy, the entire supply chain carries out procurement activities considering human rights, environment, etc. We also support the “Declaration of Partnership Building” promoted by the government and the business community.
Also, we continue to communicate with business partners by conducting sustainable procurement questionnaires and visiting the companies among others. Details of sustainable procurement are disclosed on the Company’s website.

Sustainable procurement