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Corporate Governance

We gained shareholder approval for the adoption of the "Company with Committees" system at the ordinary general meeting of shareholders held on March 30, 2004.

About the "Company with Committees" System

In a bid to improve corporate governance, various actions have been taken in recent years, including reinforcement of the auditing system and the introduction of the outside director system. To provide more transparency to management, we have decided to implement the "Company with Committees" system, which is only allowed for "large companies" and "deemed large companies" under the revised Japanese Commercial Code. The system helps distinguish supervisory functions from business execution with enhanced corporate governance and mobility.

Purposes of the Adoption

  • To Enhance Management Mobility
    Many of the powers to execute business activities will be delegated to Executive Officers. As a result, we will be able to make quicker management decisions.
  • To Increase Management Transparency
    Three committees audit, nominate Directors and determine the compensation of company Directors and Executive Officers. In addition to that, the Chairman of the Board of Directors and the President are separated clearly so that the management oversight and transparency are further strengthened.
  • To Enhance Effectiveness of Internal Control System
    The 'Audit Committee' implementation works more effectively through the Internal Control System by the committee and in cooperation with outside audit organizations to strengthen the controls. The Audit Committee members are individuals who are familiar with actual business or organization, so that it works more effectively and efficiently.

Requirements for the adoption of the "Company with Committees" system

  • Establishment of three committees
    The following three committees are established in the Board of Directors, and each committee consists of three or more committee members
    • Nomination Committee...Issuance of proposals for the election and dismissal of Directors
    • Audit Committee...Audits the performance of duties by Directors and Corporate Executive Officers
    • Compensation Committee...Determination of Directors and Corporate Executive Officers compensation
  • Outside Directors
    The majority of the directors who constitute each committee are outside directors.
  • The Term of Directors
    The term of director is one year. (It used be 2 years.)
  • Establishment of Corporate Executive Officers
    The Board of Directors transfers a significant portion of its operating power to Corporate Executive Officers, who resolve any matters and issues received from the Board of Directors and carry out day-to-day operations. Their term of office is one year.
  • Auditors
    The system does not allow the appointment of Auditors.

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