1．Basic Views and Guidelines on Corporate Governance
Basic Views on Corporate Governance
Based on the "Furukawa Electric Group Corporate Philosophy", we enhance our management performance responding appropriately to changes in the business and market environment by prompt business decision making as well as with transparency and fairness. At the same time, we ensure sound management by developing and establishing an effective internal control system. With these, we will expand and develop our business on a sustainable basis and increase our corporate value. Furthermore, we seek to strengthen and enhance our corporate governance, in accordance with the followings:
- We secure the rights and equal treatment of shareholders;
- We consider interests of stakeholders including shareholders, and cooperate appropriately with them;
- We ensure appropriate information disclosure and transparency;
- Given its fiduciary responsibility and accountability to shareholders, the board of directors carries out effective oversight of management from objective standpoint, respecting the independent directors' role for the oversight;
- We engage in constructive dialogue with shareholders who have investment policies in accordance with interests of mid- to long-term shareholders.
Guidelines on Corporate Governance
Based on "Basic Views on Corporate Governance", we adopted "Guidelines on Corporate Governance" as a policy for enhancing our corporate governance.
2. Overview of Corporate Governance System
We adopt the "Audit and Supervisory Board" type of governance organization under the Japanese Companies Act taking account of the importance of maintaining the independence of the statutory audit function. And we have a "Nominating/Compensation Committee", which consists of majority of committee members and is chaired by outside director to complement oversight function of the board.
Corporate Governance Organization Chart
Oversight and Supervising
Board of Directors
Given its fiduciary responsibility and accountability to shareholders, the board is responsible for promoting sustainable corporate growth and the increase of corporate value over the mid- to long-term and enhancing earnings capability and capital efficiency. The board oversights and determines the matters listed below:
- Determination of corporate governance-related matters;
- Establishment and amendment of business strategies and oversight of execution of such strategies and plans by management;
- Setting capital allocation policy;
- Appointment and dismissal of executives including representative director and corporate vice president, and determination of the remuneration of them (including delegating these to Nominating/Compensation Committee);
- Establishment of an internal control system relating to compliance and financial reporting and risk management systems, and oversight of them;
- Decision on important business matters;
- Others prescribed by the applicable laws and regulations etc.
At present, the board consists of 12 directors with 5 outside and independent directors in order to enhance transparency in decision-making and strengthen its oversight functions over the management taking outside directors' advice and opinion.
Outside directors have rich management experiences in financial institutions, trading companies or manufacturing companies, and expertise in the field of legal, finance/accounting or industrial governmental policy etc., in addition to the knowledge of our business area. The board respects their views and opinions based on their variety of experiences in making its decision.
We established the Nominating/Compensation Committee, replacing the former Compensation Committee in May 2015.
The committee's aim is to enhance our corporate governance securing the objectivity and transparency as to nominating and compensation for directors etc. The committee consists of 5 or more members, majority of which shall be outside directors, appointed from directors by board resolution. In principle, the chairperson of the committee is selected from among the outside directors by mutual election of the committee members.
At present, the committee consists of 7 members (5 outside directors).
Audit & Supervisory Board
Audit & Supervisory Board and each its member auditor collect information about management under statutory investigation authority and report and express their views to the board meetings and the management from an independent and objective standpoint as a fiduciary to shareholders.
Auditors ensure coordination with internal audit department through regular meetings, and report the policy, plan and result of auditing to the board regularly.
Full-time auditors attend the meetings such as Management Committee which decides major business matters, and they report information obtained from these audit activities to the non-Full-time and outside auditors.
We strengthen our audit function by appointing an assistant staff to the auditors who is dependent of management.
At present, the Audit & Supervisory Board consists of 6 members (3 members are outside and independent).
President is responsible for management of our whole business operation as a chief executive under the board’s oversight.
Our business consists of 12 business divisions, and General Managers of each division are responsible for leading each business operation including subsidiaries and affiliated companies management.
We also appoint General Managers of Communications Solutions Division, Energy Infrastructure Division, Electronics Component Material Division, Functional Products Division and Automotive products Division in order to supervise closely related business divisions.
In addition, we appoint General Manager of Global Marketing Sales Division that are responsible for our group’s sales and marketing entirely, and General Managers of Corporate Divisions that are responsible for planning group strategy and assisting operation.
These officers are members of the Management Committee, which is the highest decision-making body of business operation.
Management Committee, held 3 times a month basically, deliberates and determines major operational matters. Further, their business affairs and operation are quarterly reported to the Committee to foster common understanding of company business among them and integrated business operation as a whole.
These business affairs and operation are also quarterly reported to the board.
3. Reinforcing Internal Control
Furukawa Electric establishes, develops and operates its internal control for the purpose of efficient execution of responsibilities, compliance, risk management, information management and group company management.