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 (PDF328KB) (hereinafter referred to as "the Guidelines")" as a policy for enhancing our corporate governance.
2. Overview of Corporate Governance System
We adopted the current corporate governance system (in the organizational form of Company with the Audit & Supervisory Board), believing that the effectiveness of auditing Directors’ execution of duties is secured by institutionally maintaining the independence of the Audit & Supervisory Board and its Members from the Board of Directors, while ensuring their cooperation with Accounting Auditors and Auditing Department. Furthermore, to complement the supervisory function of the Board of Directors, the Company established Nominating/Compensation Committee. The Committee consists of at least five members (where Outside Directors comprises a majority) who are chosen among Directors by resolution of the Board of Directors; and the Committee Chair is, in principle, selected from Outside Directors by the Committee members.
Corporate Governance Organization Chart
Monitoring and Supervising
Board of Directors
Given its fiduciary responsibility and accountability to shareholders, the Board of Directors 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 of Directors 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;
- Determination of capital allocation policy-related matters;
- Appointment and dismissal of the Management team members(including identification of the skills set necessary for Board of Directors as a whole), and determination of their remuneration(including delegation of such roles 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.
For further details, please refer to “Board of Directors” of Chapter 3, Section 2 of the Guidelines (Guidelines on Corporate Governance (PDF)).
At present, the Board of Directors consists of 11 Directors, 5 of whom are Outside Directors (all of them are registered at the Tokyo Stock Exchange as independent officers). The Board of Directors is chaired by non-executive Chairperson of the Board who does not have representative rights. The Audit & Supervisory Board consists of 6 Members, 3 of whom are Outside Members (all of them are registered at the Tokyo Stock Exchange as independent officers). The Outside Officers of the Company have extensive experience in financial institutions, trading companies, and business corporations or expert knowledge and experience in such areas as laws, finance/accounting, and industrial policies, etc. The Board of Directors, in making decisions, respects Outside Directors’ opinions and suggestions from diverse viewpoints based on their experience.
Effectiveness of the Board of Directors
Our Company has conducted the effectiveness of the Board of Directors every year and we disclose the overview.
We established the Nominating/Compensation Committee, which has functions of both Nomination Committee and Remuneration Committee. The Committee has deliberations on the nomination of Directors and other officers and their remuneration, etc., aiming at ensuring the objectivity and transparency concerning such matters, and strengthening corporate governance. The Committee consists of at least 5 members (the majority being Outside Directors) appointed by resolution of the Board of Directors; and the Committee Chairperson is chosen, basically among Outside Directors, by the Committee members. As of the submission date of this Report, the Committee has 7 members; namely, Osamu Tsukamoto (Outside Director), Takashi Tsukamoto (Outside Director/Committee Chair), Yoshiro Miyokawa (Outside Director), Yukiko Yabu (Outside Director), Tamotsu Saito (Outside Director), Mitsuyoshi Shibata (Director/Chairperson of the Board), and Keiichi Kobayashi (Representative Director & President).
For further details, please refer to “Nominating/Compensation Committee” of Chapter 3, Section 3 of the Guidelines (Guidelines on Corporate Governance (PDF)).
Audit & Supervisory Board
The 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).
For further details, please refer to “Audit & Supervisory Board Members and Audit & Supervisory Board” of Chapter 3, Section 4 of the Guidelines (Guidelines on Corporate Governance (PDF)).
Our business consists of 12 operating divisions; and business divisions were established for directing and overseeing multiple operating divisions which are closely related to each other. As for our business execution, under the control of President being the chief executive, operations are directed by General Managers of such business divisions as Communications Solutions Division, Energy Infrastructure Division, Electronics Component Material Division, Functional Products Division and Automotive Products Division. In addition, we have divisions to perform such head office functions as developing and implementing our business strategies/management plans, establishing and maintaining corporate governance, risk management, and other management systems, and conducting marketing and sales activities; and General Managers of respective divisions lead such functions. These General Managers, in the capacity of executive officers, serve as members of the Management Committee, which is the highest decision-making body of business execution. The Management Committee deliberates and determines major operational matters. Furthermore, the Committee members report the status of business execution on a quarterly basis to ensure effective communications among the executive officers, thus achieving integrated business execution. Furthermore, the status of business execution is reported to the Board of Directors on a quarterly basis.
3. Reinforcing Internal Control
We establish, develop and operate its internal control for the purpose of efficient execution of responsibilities, compliance, risk management, information management and group company management.
For further details, please refer to "Systems for ensuring compliance of directors' execution of duties with laws, regulations and the Articles of Incorporation and soundness of other operations" (PDF 197MB).