Corporate Governance System

Latest Update : Sept.3, 2019

Corporate Governance System

Diagram of Corporate Governance Structure

Corporate Governance Structure

Board of Directors Meeting Meetings of the Company's eleven-member Board of Directors (including three outside directors) are held basically once every month and as needed to facilitate a swift and strategic decision-making process. In addition, the Board of Directors oversees management. Significant business matters related to our domestic and overseas Group Companies are reported to and resolved by the Board of Directors.
Nomination and Compensation Committee This committee was established as an advisory body to the Board of Directors to improve the transparency and objectiveness of the Director candidate nomination and compensation decision processes. The chairperson of this committee is an independent Outside Director and at least half of the members are independent Outside Directors.
Senior Executive Officer Council This is the President and Chief Executive Officer's advisory panel. Matters related to business operations are discussed by the Senior Executive Officer Council in basically a monthly meeting or in extraordinary Senior Executive Officer Council meetings when necessary.
Executive Officers Meeting With regard to the execution role of the Company's management, the Company has adopted the Executive Officer System in which the authority of Directors to execute business operations is delegated to Executive Officers. As a result, this system is in place to stimulate, speed up and enrich business execution. In addition, the Company has adopted the Technical Officer System in order to further reinforce development of core technologies for the Company's manufacturing. Technical Officers also participate in management.
Business operations of domestic and overseas Group Companies are reported on at quarterly Executive Officers meetings as well as other Executive Officers meetings held on an as-needed basis in order to enhance interdivisional cooperation.
Audit & Supervisory Board Meeting The Audit & Supervisory Board is comprised of four members (two standing audit & supervisory board members and two audit & supervisory board members), three of which are Outside Audit & Supervisory Board Members. The audit & supervisory board members, working in line with the audit policy laid down by the Audit & Supervisory Board, attend Board of Directors' meetings and other key meetings. They also work to audit domestic offices and Group Companies, to conduct hearing from directors and executive officers, as well as to audit the activities of the directors through an inspection of business operations and assets.
The Ordinary Audit & Supervisory Board meetings are held basically once every month and extraordinary meetings are held accordingly, to discuss and adequately analyze specific issues. Also, meetings with the Representative Director, President and Chief Executive Officer are held every quarter to exchange opinions.
Internal Auditing Office The Internal Auditing Office regularly audits the Group Companies. Internal audits are designed to correct nonconforming or inappropriate operational procedures and improve the quality and efficiency of operations in accordance with internal audit regulations.
The Internal Auditing Office carries out the internal audit items requested by the Audit & Supervisory Board Members based on discussions with the Audit & Supervisory Board and reports those results to the Audit & Supervisory Board.
Other Committees Committees are established for specific matters necessary for adequate business operations, such as Compliance, Risk Management, Information Security, etc.

Members of each institution (◎ is chairperson)

Positions Name Board of Directors Meeting Nomination and Compensation Committee Senior Executive Officer Council Audit & Supervisory Board
Representative Director,
Chairman & President
Yoshihisa Kainuma
Representative Director,
Vice Chairman
Shigeru Moribe
Director,
Senior Managing Executive Officer
Ryozo Iwaya
Director,
Senior Managing Executive Officer
Tetsuya Tsuruta
Director,
Senior Managing Executive Officer
Shigeru None
Director,
Senior Managing Executive Officer
Shuji Uehara
Director,
Senior Managing Executive Officer
Michiya Kagami
Director,
Managing Executive Officer
Hiroshi Aso
Outside Director Kohshi Murakami
Outside Director Atsuko Matsumura
Outside Director Takashi Matsuoka
Standing Audit & Supervisory Board Member Naoyuki Kimura
Standing Outside Audit & Supervisory Board Member Koichi Yoshino
Outside Audit & Supervisory Board Member Shinichiro Shibasaki
Outside Audit & Supervisory Board Member Makoto Hoshino
(Executive Officers and Technical Officers) Other 37 people*1 *1

*1 The Senior Executive Officers Meeting is comprised of two representative directors and six executive directors, as well as senior managing executive officers, managing executive officers and executive officers appointed by President and Chief Executive Officer.

* 14 males and 1 female (ratio of females among executives: 6.7%)

Reasons for Adoption of Current Corporate Governance System

In addition to establishing a Board of Directors and an Audit & Supervisory Board as bodies under the Companies Act, the Company has established a Nomination and Compensation Committee and Senior Executive Officer Council as discretionary bodies to supplement those functions.
The Company has adopted this system because it achieves effective governance. It does this by the Board of Directors, including Outside Directors, overseeing business execution and making rapid and highly strategic management decisions while the Audit & Supervisory Board Members, including Outside Audit & Supervisory Board Members, audit the execution of the responsibilities of Directors from an objective and independent standpoint.

Disclosure of Summary of the Results on Analysis and Evaluation its Effectiveness as a whole

With regard to the evaluation of the effectiveness of the Board of Directors, the Company conducted a self-evaluation through a written questionnaire on the composition, agenda, and operational status of the Board of Directors for all Directors and Outside Audit & Supervisory Board Members. The Company also analyzes the results of the analysis by the Secretariat of the Board of Directors and discussed the results of the analysis by the Board of Directors. As a result, the Company has confirmed that the Board of Directors meeting is functioning sufficiently in general. By continuing to follow the PDCA cycle, the Company will continue to improve the effectiveness of the Board of Directors meeting.

Supporting System for Outside Directors and/or Outside Audit & Supervisory Board Members

Support for Outside Directors is basically handled by the Secretariat of the Board of Directors, but the relevant departments appropriately handle as necessary. With regard to Outside Audit & Supervisory Board Members, the Company strives to maintain close contact with full-time Audit & Supervisory Board Members and share information. In addition, the Company distributes materials for the Board of Directors meetings in advance to Outside Directors and Outside Audit & Supervisory Board Members in order to ensure that they understand the details of the agenda and reported items as soon as possible.

Also, the Company establishes opportunities for visits to major business sites including overseas and explanations by members of these business sites for Outside Directors and Outside Audit & Supervisory Board Members in order for them to gather information about the Company's organization, business operations and business sites, etc.

Certified Public Accountants

KPMG AZSA LLC carries out the Company's accounting audits pursuant to the audit service agreement it has concluded with the Company for the implementation of audits under the Companies Act and audits under the Financial Instruments and Exchange Act.

The Audit & Supervisory Board reviews the details of the audit service agreement and compensation packages for the financial auditors to ensure the integrity of the auditing process by verifying the independence of the audit company.

Cooperation among Audit & Supervisory Board Members, Independent Auditors and Internal Audit Departments

The Audit & Supervisory Board periodically holds meetings with the Internal Auditing Office, listens to annual audit plans and their objectives, etc., and receives reports about all internal audit results. In implementing audits, the Audit & Supervisory Board holds prior discussions on auditing points and other matters, and joins and observes internal audits where necessary. In addition, the Audit & Supervisory Board receives explanations of the audit structure, audit plan, and audit implementation status from KPMG AZSA LLC, the Company's independent auditor, as well as carries out information sharing and information exchanges, etc. It also joins accounting audits conducted of domestic business sites and Group Companies, through which it regularly monitors the situation.

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