Corporate Governance
Reinforcement of Corporate Governance
We have strengthened our corporate governance structure by introducing an executive officer system to separate management and executive functions, and by building risk management and compliance systems based on the Risk Management Committee and the Compliance Committee.
(1) Overview of the Corporate Governance Structure
Board of Directors:
The Board of Directors consists of five directors (as of June 29, 2011). In addition to monthly meetings, it holds extraordinary meetings as required to make decisions on statutory matters as well as important matters.
The supervisory and executive functions are separated, and the executive officer system is utilized as a measure for securing rapid managerial decision making and bolstering the supervisory functions.
The Articles of Incorporation stipulate that the number of directors shall not exceed 11.
Management Committee:
The Management Committee is comprised of directors and executive officers. It holds meetings on a weekly basis, in principle. It not only deals with matters referred to the Board of Directors, but also works to ensure information coordination and mutual checks on issues and strategies regarding business operations in accordance with the management policy approved by the Board of Directors in an effort to avert any inconsistencies in terms of decision making and the performance of duties.
Board of Auditors:
We utilize the corporate auditor system. The duties of corporate auditors include the formulation of audit policies and plans at the Board of Auditors, the attendance of key meetings including those of the Board of Directors, the Management Committee, the Compliance Committee and the Risk Management Committee, the verification of reports received from directors and executive officers, and on-site investigations of branches and other establishments. The corporate auditors audit the directors? execution of duties, including the development of the internal control system.
The team of three corporate auditors, including two outside corporate auditors, works with the Internal Auditing Department and the accounting auditors to enhance the management supervisory functions and share information with the auditors of affiliated companies and other companies in the Group in a bid to fortify the structure for auditing operations within the entire Group.
Compliance Committee:
As a consultative body under the direct control of the Board of Directors, the Compliance Committee has been established for the purpose of evolving the compliance structure. The objectives of the Committee include the creation of a corporate culture that places emphasis on compliance, the establishment of corporate ethics and the formulation of compliance programs.
Risk Management Committee:
As an organization under the direct control of the Board of Directors, the Risk Management Committee has been established with the aim of constructing a risk management system.
The functions of the Risk Management Committee include regular risk monitoring, instructions for studies on measures for averting and mitigating risks, issuing commands in the event of an emergency, various instructions for actions and the consideration of prior actions in the event of a crisis.
We ensure mutual collaboration between the Compliance Committee and the Risk Management Committee and make cross-sectional decisions on policies and other matters.
Compliance Risk Subcommittee:
The Compliance Risk Subcommittee has been established below the Risk Management Committee and the Compliance Committee. It normally holds two meetings each month. The subcommittee takes swift and appropriate action against matters with increasing risks, carries out investigations and analyses them. It develops detailed preventive measures against such matters and delivers regular reports on internal compliance status to the relevant committees as required.
(2) Reasons behind the current structure
Some of our directors are from financial institutions and other companies, although they do not fall under the category of outside directors stipulated in item (xv), Article 2 of the Companies Act. It is considered that this ensures a business administration that incorporates the perspectives of outsiders.
As we have an auditor system, we understand that the managerial supervisory functions are fully in place through business auditing performed by three corporate auditors, including two outside auditors. One of the outside auditors is designated as an independent officer.
Furthermore, we have established the Risk Management Committee under the direct control of the Board of Directors, the Compliance Committee including outside members (attorneys) as a consultative body under the direct control of the Board of Directors, and the Compliance Risk Subcommittee as an organization below the two committees in a bid to bolster the supervisory functions.
We operate under the current structure due to the above factors.
The diagram below illustrates our Group's structures for business execution, management supervision, internal control and risk management as of the date of submission of the Annual Securities Report.
|
