Under the Committee System, the directors are primarily responsible for the oversight of management. Executive managing directors chosen by the directors conduct business operations within the scope of authority delegated by the directors.
Most members of the nomination, audit, and compensation committees are outside directors to optimize oversight and transparency. We delegated considerable authority to executive officers to accelerate decision-making. Seven of the 12 people on the board of directors are outside directors; only two are concurrently executive officers. Ten directors of the board do not serve concurrently as executive officers. The three-member nomination committee, which includes two outside directors, formulates proposals for director elections and dismissals at the meeting of shareholders.
The three-person audit committee assesses implementation by directors and executive officers and produces proposals for auditor elections and dismissals at the meeting of shareholders. The three-person compensation committee which includes two outside directors, determines remuneration policies for directors and executive officers and general remuneration.
The executive management board, group integrated risk management committee and internal controls committee deliberate and decide on important matters that the board of directors delegate to executive officers.
The Nomination Committee, Audit Committee, and Compensation Committee have been given the authority to make decisions on issues including candidates for the Board of Directors, audits concerning the business execution of directors and executive managing directors, and compensation for directors and executive managing directors, as such, management oversight is conducted by the Board of Directors.
The Nomination Committee is composed of a majority of outside directors and is responsible for decisions regarding proposals made to the annual meeting of shareholders concerning the appointment and dismissal of directors. No directors who serve concurrently as representative executive officers, including the CEO, or executive officers are members of the Nomination Committee.
Three Directors (Including two Outside Directors)
The Audit Committee is responsible for auditing the duties carried out by directors and executive officers. The Audit Committee also prepares audit reports and makes decisions regarding proposals to be submitted to the annual meeting of shareholders concerning the appointment and dismissal of independent auditors. All members of the Audit Committee are outside directors, and meet the requirements of independent directors under the Sarbanes-Oxley Act.
Three Outside Directors
The Compensation Committee is also composed of a majority of outside directors. This committee determines policy for decision making regarding compensation and related matters for directors and executive officers, and decides specific compensation and related matters for individual directors and executive officers. No directors who serve concurrently as representative executive officers, including the CEO, or executive officers are members of the Compensation Committee.
Three Directors (Including two Outside Directors)
The Commercial Code defines an outside director of a company as a non-executive director (i) who has never assumed the position of executive director, manager or employee of the company or its subsidiaries and (ii) who does not currently assume the position of executive director, manager or employee of the company or its subsidiaries.
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