March 5, 2021
Kobe Steel, Ltd.
Kobe Steel, Ltd. announces that, at its Board of Directors meeting held today, it has adopted a resolution to make changes to its management structure on April 1, 2021, with the aim of strengthening sustainability management.
Kobe Steel has been studying ways to strengthen corporate governance and promote sustainability management*1). In order to respond to the transformation of industrial structures and the progress of digital transformation (DX) toward the realization of a green society, as well as other important issues such as ESG and SDGs, Kobe Steel has decided to reorganize its management structure to take the current efforts a step further.
*1) Sustainability management: The Kobe Steel Group, also known as the KOBECLO Group, aims to realize the vision set forth in the Group Corporate Philosophy and achieve sustainable growth of the Group by setting key issues and goals for each of two categories: (1) a management foundation area that prevents damage to corporate value and supports sustainable growth and (2) a value creation area that realizes business growth.
The Board of Directors will shift to a body that focuses on determining important management directions and monitoring management activities including risk management.
The current number of Directors is 16 (6 of which are independent outside directors), but it will be reduced to 13 (6 of which will be independent outside directors).
In the new composition of the Board of Directors, non-executive directors, including audit and supervisory committee members, will form a majority (with 8 non-executive directors among 13 directors).
Changes in the Composition of Directors
|President and CEO||1||1|
|Materials, machinery, and electric power businesses||3||0|
|Companywide corporate planning||1||1|
|Companywide safety, quality management, and environmental control||1||1|
|Audit & Supervisory Committee members||External||3||3|
|The number of Independent Outside Directors||6||6|
Company-wide committees will be reorganized in order to effectively promote (1) Enhancement of ESG strategies (promoting sustainability management and strengthening risk management) and (2) Reinforcement of Head Office’s strategic functions (strengthening business portfolio management and investment management), which are key management issues of the company.
|Sustainability Management Committee||Current CSR Committee to be renamed for enhancing functions|
|Risk Management Committee||To be newly established for:
|Business Portfolio Management Committee||To be newly established for enhancing Head Office’s strategic functions|
|Investment and Loan Committee|
|DX Strategy Committee||Current IT Strategy Committee to be renamed for enhancing DX strategies|
With respect to the functions of the Head Office, we will integrate similar functions, streamline operations that come into contact with business divisions, and transfer some functions to business divisions, with a view to further improving the effectiveness of the risk management system to promote company-wide strategies and strengthen corporate governance.
|Division||Current||From April 1, 2021|
|Head Office||19 departments and 1 section||13 departments and 2 sections|
In light of the growing need to flexibly and promptly allocate human resources in response to the rapidly changing business environment, the positions of Senior Managing Executive Officer and Managing Executive Officer will be abolished.
According to this change, the basic compensation stipulated for each position will be changed to compensation based on roles and responsibilities.
The Corporate Governance Committee (majority of members are independent outside directors) chaired by an independent outside director will be established as an advisory body to the Board of Directors. The committee is responsible for studying the ideal management system on a continuous basis in response to changes in the business environment from an independent and objective perspective and reporting to the Board of Directors.
Research and development of element technologies necessary for monozukuri improvement activities will be integrated into the Technical Development Group’s Materials Processing Technology Center.
In addition, in order to strengthen and accelerate technology development and business application in the fields of ICT and AI toward digital transformation (DX) in the KOBELCO group, the Digital Innovation Technology Center will be newly established for consolidating functions.
With this reorganization, the Company’s business divisions will be jointly supported by the three centers: Materials Processing Technology Center; Digital Innovation Technology Center; and Application Technology Center.
Taking the opportunity of major changes in the needs of the automobile industry, such as the development of CASE and MaaS, including the shift to electric vehicles, our corporate automobile strategy will be restructured based on our technological capabilities in materials, parts, manufacturing know-how, and solution technologies.
|New section/unit||Scheduled reorganization||Function|
|Automotive Materials Planning Section||Automotive Materials Planning Section to be integrated into the Steel and Aluminum Business||To carry out planning for company-wide automobile projects and transfer to business divisions with business responsibility|
|Aluminum Extrusion & Suspension Unit||Aluminum Suspension Unit and Aluminum Extrusion & Fabrication Unit to be integrated into the new unit||To provide a single point of contact for customers|
In addition to the establishment of the Business Development Department under the Head Office, specialized departments will be established within the business divisions to promote planning and implementation of new business initiatives on a company-wide basis.
Kobe Steel launched the Trust Rebuilding project in 2018 for steadily implementing recurrence prevention measures, regaining the trust of stakeholders, and remembering the quality misconduct. We will continue to strengthen and develop our efforts as the Trust Improvement project, positioning it as an important issue directly under the President.
Our Group will work to create new value to build the social infrastructure necessary for a green society with a view to realizing a world in which people, now and in the future, can fulfill their hopes and dreams while enjoying safe, secure, and prosperous lives as we envision in KOBELCO’s View of the Future.
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