Corporate Governance System

Latest Update : Jan.17, 2019

Corporate Governance System

Diagram of Corporate Governance Structure

Corporate Governance Structure

Board of Directors Meeting

Meeting of Company's eleven-member Board of Directors (including three outside directors) is held basically once every month and as needed to facilitate a swift and strategic decision-making process. 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 enhance the independence, objectivity, and accountability of the functions of the Board of Directors with regard to the nomination and compensation for Executive Management and Directors. Members of this committee are selected by the Board of Directors 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 MinebeaMitsumi 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.

Reasons for Adoption of Current Corporate Governance System

MinebeaMitsumi is a company with Audit & Supervisory Board Members, having three Outside Audit & Supervisory Board Members (including one full-time Outside Audit & Supervisory Board Member) out of four Audit & Supervisory Board Members. They audit independently and objectively Directors' execution of duties. We also have three Outside Directors out of the eleven Board members, which is aimed at ensuring soundness of corporate management, promoting compliance management, and strengthening the supervisory role for the executive organizations. With this system, we believe our business supervisory role will ensure sufficient neutrality and objectivity.

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 analyzed 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 Auditors & 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 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 contract 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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