24 Mars 2012
March 25, 2012
The government's Nuclear Damage Liability Facilitation Fund has begun considering the establishment of a reform task force comprised of outside members for Tokyo Electric Power Co., according to sources.
The fund plans to invite a new chairman of TEPCO's board of directors from outside the utility and set up the task force under the direct command of the new chairman.
The fund aims to proceed with management reforms after it contributes money to TEPCO.
Officials from the fund, including experts in corporate rehabilitation, will join the task force to bolster the authority of the new chairman.
The fund envisions the task force will have sufficient authority to advise the new chairman and supervise TEPCO's management.
TEPCO will include steps to restructure itself into a company with committees when it proposes a comprehensive special business plan at a shareholders meeting in June.
As a result, a majority in TEPCO's board of directors will be from outside the utility. Operating officers promoted from within will oversee practical operations.
However, as many outside board directors would be part-time, it could take a long time for them to understand details of the company's internal affairs.
Some government officials have voiced concern that operating officers promoted from within TEPCO may take over the reins of power and that the reforms would become toothless.
It also is possible that the outside board directors do not have advanced knowledge of electricity supply and other key aspects of the company's operations.
The reform task force operating under the direct command of TEPCO's new chairman is modeled after a system first introduced by the Industrial Revitalization Corporation of Japan (IRCJ), established in 2003 as a joint public-private sector fund, in which it dispatched its officials to companies that it funded. The IRCJ disbanded in 2007.
TEPCO's task force on reform will comprise experts in accounting, corporate rehabilitation and other fields. Task force members will not be transferred to the power company but rather work both for the fund and as TEPCO officials.
The task force will supervise operating officers promoted from within TEPCO, and relay the new chairman's management policy to other executives and working-level employees.
The fund also expects the new chairman will bring staff from his or her company to join the task force.
However, TEPCO executives oppose the plan, arguing the establishment of such a task force under the direct command of the new chairman will lead to conflicts with other internal entities in the future.