Annual Report 2012


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MANAGEMENTSYSTEMSTRUCTUREOFBUSINESSOPERATIONSWEAPPLYTHEEXECUTIVEOFfiCERSYSTEM,UNDERWHICHWESTREAMLINEOURMANAGEMENTTHROUGHTHETRANSFEROFAUTHORITYANDPROMPTDECISION-MAKING.BOARDOFDIRECTORSTHEBOARDOFDIRECTORSMEETSATLEASTONCEEVERYMONTH.ATTHEBOARDMEETING,OURDIRECTORSMAKEDECISIONSONBASICMANAGEMENTPOLICIES,MATTERSSTIPULATEDBYLAWSANDREGULATIONS,ANDOTHERSIGNIFICANTMANAGEMENTISSUES.THEYALSOSUPERVISETHEPERFORMANCEOFDUTIESBYEXECUTIVEOFfiCERSANDOURSTAFFMEMBERS.OFTHE13DIRECTORS,TWOAREOUTSIDEDIRECTORSSTIPULATEDBYTHECOMPANIESACTOFJAPAN.THECHAIRPERSONDOESNOTHAVETHEAUTHORITYOFREPRESENTATIONANDISNOTANEXECUTIVEOFfiCER.EXECUTIVEOFfiCERS’MEETINGTHISMEETINGISHELDTWICEAMONTH,INPRINCIPLE,ANDISATTENDEDBYEXECUTIVEOFFICERSANDAUDITORS.PARTICIPANTSHELPTHEPRESIDENT&CEOMAKEDECISIONSTHROUGHFRANKDISCUSSIONS,INADDITIONTOSHARINGINFORMATIONONIMPORTANTMATTERS.BOARDOFAUDITORSTHEBOARDOFDIRECTORSMEETSATLEASTONCEEVERYMONTH.THREEOFTHEFIVEAUDITORSAREOUTSIDEAUDITORSSPECIFIEDINTHECOMPANIESACTOFJAPAN.THEAUDITPOLICY,AUDITPLANS,ANDOTHERRELATED■CORPORATEGOVERNANCESTRUCTURE(ASOFJUNE1,2012)CORPORATEGOVERNANCEMANAGEMENTSYSTEMMATTERSAREDETERMINEDBYTHEBOARDOFAUDITORS,AIMINGFORAFAST,FUNCTIONALAUDITINGPROCESS.AMONGOTHERACTIVITIES,AUDITORSATTENDMEETINGSOFTHEBOARDOFDIRECTORSANDOTHERIMPORTANTMEETINGSANDINSPECTDOCUMENTSSHOWINGfiNALDECISIONS,AUDITINGTHEWORKOFDIRECTORSASANINDEPENDENTORGANIZATION.WEALSOAPPOINTDEDICATEDSTAFFTOASSISTAUDITORS.MANAGEMENTCONFERENCETHEMANAGEMENTCONFERENCEHOLDSDISCUSSIONSANDEXCHANGESOPINIONSEVERYWEEK,INPRINCIPLE,ANDISATTENDEDMAINLYBYSENIORMANAGINGEXECUTIVEOFFICERSANDHIGHER-LEVELEXECUTIVEOFFICERS.DEPENDINGONTHEAGENDUM,OTHERSMAYBEINVITEDTOTHECONFERENCE.INTERNALCONTROLSYSTEMTHEBOARDOFDIRECTORS,ANDTHEEXECUTIVEOFFICERSANDGENERALMANAGERSINCHARGEOFSPECIFICBUSINESSOPERATIONSUNDERTHESUPERVISIONOFTHEBOARDESTABLISHTHEFRAMEWORKOFINTERNALCONTROLS,EVALUATEITSEFFECTIVENESS,ANDENSURETHATITFUNCTIONSPROPERLY.THEINTERNALAUDITOFFICEASSISTSDIRECTORSINPERFORMINGTHEIRDUTIESWITHRESPECTTOTHEESTABLISHMENTANDMAINTENANCEOFINTERNALCONTROLSBYPROVIDINGFEEDBACKFROMINTERNALAUDITSANDSUGGESTINGIMPROVEMENTS.AUDITORSOVERSEETHEPROCESSESBYWHICHDIRECTORSBUILDANINTERNALCONTROLSTRUCTUREANDCONfiRMTHATITISFUNCTIONINGEFFECTIVELY.34ANNUALREPORT2012


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