Air Water has finished the structural part of its post-scandal governance overhaul. The staffing and accountability parts are still ahead. The company submitted a revised improvement plan and status report to the Tokyo Stock Exchange on 28 October. It follows the TSE's 1 May designation of the company as a security on alert, and it builds on an earlier Tokyo Brief piece (Earlier Tokyo Brief coverage).
What is done. An extraordinary shareholders' meeting on 22 September moved the company to an audit-and-supervisory-committee structure, giving audit committee directors votes on the board. An outside director replaced the president as board chair. A newly elected director took over as finance and accounting chief. On 8 October the board scrapped the top management committee and created a management council to take over routine decisions, so the board can concentrate on strategy, internal control and the remediation plan itself.
What is not. Internal audit had 25 people at 30 September, up from 17 on 1 July. The company says its plan to add 12 a year and reach 52 by the end of its 2028 fiscal year is on track, although the 25 is below the 29 it originally expected by March 2027. It is using outside experts to cover the shortfall. A committee of outside lawyers is examining whether current and former directors and auditors breached their duties, and the report expects it to finish in December 2026. The company says it will seek accountability after that. Management dialogue meetings with employees are now due to reach every consolidated subsidiary, overseas ones included, by the end of November, brought forward from March 2027.
The diagnosis. The report attributes the misconduct to a culture that put earnings targets first and to concentrated power in the former chairman. It also cites an accounting team of 16 serving more than 200 group companies and a thinly staffed internal audit office. It puts the scope at the parent and 37 group companies, or 42 after the company's own voluntary check. The company says it does not consider compliance awareness to have taken hold across the group yet.