Fundamental Philosophy Concerning Corporate Governance and the Status
of Implementation of Measures
Fundamental
Philosophy of Corporate Governance
The Directors, who are entrusted by shareowners to manage
the Company, endeavor to enhance the functions of the Board of Directors,
the business execution organization of the Company, and ensure efficient
decision-making as well as transparency of management information.
The Auditors beef up and reinforce the functions to audit the Directors’ performance
of duties, ensuring the independence of their status.
Based on one of our fundamental management policies, “To behave with integrity
as a company as well as an individual,” the Company develops and sustains
a healthy corporate culture through thorough activities of the Risk Management
Committee and Ethics Committee.
Measures
Related to Corporate Governance
Corporate
framework
Our company has adopted the system of auditors.
< Board of Directors and Its Meetings >
In principle, the Board of Directors meets at least once a month to determine
important matters and supervise the status of Directors' performances.
And a management meeting is held at least once a month with all domestic
Directors in order to discuss important matters of corporate management.
In respect with the execution of duties, the President controls the whole
Group and respective Directors takes administrative responsibility for
individual division and operation in charge.
< Board of Auditors and Its Meetings >
The Board of Auditors is comprised of four auditors including two external
auditors (as of the end of current consolidated accounting fiscal year)
and the Auditors supervise Director’s performance of duties.
Development
status of internal control system and risk management framework
A) Framework to ensure that business execution by Directors
and employees conform to laws and regulations as well as articles of
incorporation.
(a) The persons who are involved in management take the
lead in adhering to the Declaration of Corporate Policy as well as the
Code of Ethics, Quality Assurance Code and Environment Code which have
been set forth in line with our business philosophy, and make sure the
conformity through monthly meetings where all responsible administrators
are called, informal meetings with department chiefs and management discussions
with employees.
(b) To ensure business activities adhering to the laws
and company rules, the Ethics Committee, an organization which includes
external attorneys and is directly controlled by the President, plans
and manages programs seeking for thorough compliance through enhancement
of stuff education and trainings and makes final decisions on compliance
with various business issues. An officer responsible for risk management
reports the detailed activities of the Committee to the Board of Directors.
(c) To deal with doubtful matters on compliance in the
Group, the Company establishes an internal reporting system which allows
each administrator to directly inform the Ethics Committee of such matters.
The liaison contacts are set both inside and outside the Company, which
even receives information from external sources such as business partners.
The Company keeps the information secret and does not treat the informing
party disadvantageously.
B) Framework to store and manage information related
to duty execution of the Directors
(a) Minutes of general shareholder’s meetings and
the Board of Directors meetings, minutes of meetings of various committees
whose chairperson is a Director as well as group decision forms (ringisho)
and performance reports prepared in accordance with the company rule
(hereinafter referred to as “Documents”) are properly stored
and managed in accordance with the laws and regulations of the Company
such as basic principles of information security.
(b) The Directors and Auditors may examine such Documents
at any time.
C) Other framework to regulate risk management against
losses
(a) The Risk Management Committee, an organization directly
controlled by the President, strives to establish, maintain and improve
a risk management system of the Group based on the regulations of risk
management. An officer responsible for risk management notifies the Board
of Directors of the activities of the Committee on a regular basis.
(b) Respective supervisor assures appropriate risk management
for individual operation in charge. In regard to risks with extreme importance
such as on compliance, environment, quality of products and finance,
each division defines rules and guidelines on risk management, provides
staff trainings and prepares and distributes manuals on behalf of the
Group.
Status
of Internal Audits, Audits by Auditors and Accounting Audit
Internal
Audit
The Audit Office, which is directly controlled by the
President, has been established as a division of internal auditing (consisting
of four members). The Office conducts internal audits of the Group based
on the annual plan, and reports the results of audits to Directors, Auditors
and administrators responsible for organization under audit.
Audits
by Auditors
Auditors conduct audits in conformity with the laws,
regulations, articles of incorporation and guidelines on internal control
set forth by the Board of Auditors in order to ensure effectiveness of
audits.
Auditors also receive regular reports on audit plans and audit results
from accounting auditors, in addition to mutually cooperating with them
by witnessing a portion of their audits. Moreover Auditors conduct an
exchange of information and opinions with the division of internal auditing,
as necessary.
Audit
of Accounts
The Company has signed an audit contract with Ernst & Young
ShinNihon. In this fiscal year, three certified public accountants of
the firm, Mr. Kazumasa SAHARA, Mr. Eiji ITO and Ms. Michiko CHIBA are
engaged in the procedures of accounting audits with eight other certified
public accountants and eight assistant accountants.
Note: The number of years of continuous auditing service is not indicated
above since all the three certified public accountants have worked for
the Company not more than seven years.
Relationships
between External Directors and External Auditors
External
Directors
The Company does not assign external Directors.
External
Auditors
Of the two external Auditors (as of the end of current
consolidated accounting fiscal year), one is a former director of financial
institution with which the Company has dealings and the other is an attorney.
The Company does not have any personal, financial and/or business relationships
nor other interests with the external Auditors.
Remuneration
for Officers
Remuneration paid to the Directors and Auditors
| Directors |
|
17 members |
|
671 million yen |
|
| Auditors |
|
4 members |
|
90 million yen |
|
The
amount paid to Directors does not include the employee salary portion
of the remuneration paid to Directors who have status as employees.
The
amount includes the 54 million yen in Directors’ bonuses for the
current fiscal year.
Remuneration
for Audit
The following remuneration are paid to Ernst & Young
ShinNihon, the auditing firm of the Company:
Amount
of remuneration based on duties as specified in Section 1 of Article
2 of the Certified Public Accountan.
Law 41 million yen
Amount
of other remuneration other than I -
Law 1 million yen
Summary
of limited liability agreement concluded with external Auditors
Agreements for limiting liabilities to the level set
forth by the laws and regulations pursuant to Article 427 (1) of the
Corporate Law are concluded between Nissui and each external Director.
Quorum
of Directors
It is set forth in the Articles of Incorporation that
the number of Nissui’s Directors shall be 20 or less.
Requirement
of resolution to select Directors
Nissui defines in the Articles of Incorporation that
a resolution for selecting Directors shall be passed by a majority of
voting rights held by shareholders attending the shareholders’s
meeting who can exercise voting rights and when one-thirds or more of
the voting rights are held by them.
Matters
subject to resolution at the General Meeting of Shareholders which can
be resolved at the Board of Directors meetings
To ensure adaptive capital policies and profit distribution
policies, the Company sets forth in the Articles of Incorporation that
matters defined in each paragraph of Article 459 (1) of the Corporate
Law, such as dividends from retained earnings, shall be defined through
resolutions at the Board of Directors meetings, instead of resolutions
at the shareholders meetings, unless otherwise provided elsewhere in
the laws and regulations.
The
Company defines in the articles of incorporation that treasury stocks
can be acquired through a resolution at the Board of Directors meeting
to ensure performance of mobile capital polices, pursuant to the regulations
of Article 165 (2) of the Corporate Law.
Requirement
of special resolution at a shareholder’s meeting
The Company defines in the articles of incorporation
that resolutions set forth in Article 309 (2) of the Corporate Law must
be approved by at least two-thirds (2/3) of the voting shares represented
at the shareholder’s meeting where shareholders holding one-third
(1/3) or more of the votes entitled to be cast are present, in order
to ensure smooth management of shareholder’s meetings by relaxing
the quorum requirement.
Reference: Diagram
