DENSO believes that establishing a corporate governance system designed to strengthen Group competitiveness is the key to maintaining and improving long-term corporate performance in a rapidly changing global marketplace. In addition to establishing statutory corporate bodies, DENSO Corporation has developed various governance mechanisms. At the same time, we are implementing highly sound, efficient, and transparent management by continuously providing shareholders and other investors with information on the state of our business.
Formulation of Basic Policies on Corporate Governance
In June 2015, DENSO formulated the Basic Policies on Corporate Governance based on Japan's Corporate Governance Code, which aims for transparent and efficient corporate management.
Corporate Governance System and Principal Organizations
DENSO Corporation has adopted a corporate auditor system. In addition to statutory bodies such as the General Shareholders' Meeting, the Board of Directors, the Board of Corporate Auditors, and the Accounting Auditor, DENSO Corporation has developed various governance mechanisms.
Additionally, through a corporate officer system that divides and clarifies the roles between members of the Board, who are responsible for management (decision-making and supervision), and Senior Executive Directors and Executive Directors, who are responsible for the execution of business operations, DENSO Corporation is streamlining the number of members of the Board and is realizing speedy decision-making and business operations.
Under this system, Senior Executive Directors and Management Officers serve concurrently as members of the Board to ensure balance in terms of knowledge, experience, and abilities throughout the Board of Directors as a whole. In addition, DENSO Corporation sets the term of office for members of the Board at one year with the aim of building a flexible management structure that responds to changes in the management environment and to further clarify management responsibilities during the business year.
Corporate Governance System
Board of Directors
The Board of Directors acts as the decision-making body for management policies and important operational issues. Decisions are carried out with the majority of directors in attendance and by a majority of their voting rights. Instructions deriving from decisions made concerning legal matters and important issues that relate to the entire Group are implemented through the Executive Meeting, and individual directors carry out the necessary actions in their areas of responsibility by issuing instructions to Senior Executive Directors, managing officers, or department managers.
Results for meetings convened in fiscal 2017
|Number of times convened||15 times|
|Attendance rate||Members of the Board: 99%
Senior Executive Director Meeting
The Senior Executive Director Meeting is a deliberative body charged with discussing issues to be decided by the Board of Directors and other important issues that have a bearing on overall corporate management (corporate business plans, investment issues, important transaction formats and collaborative projects, and other important management matters) and gives direction to corporate policy. Results of the Meeting's deliberations are reported to the Board of Directors for final decision-making. In fiscal 2017, the Senior Executive Director Meeting convened 29 times.
In regard to the independence of outside Board members and outside auditors, DENSO presumes that Board members and auditors satisfy the independence criteria prescribed by Financial Instruments and Exchange Act and requires that they possess a wealth of knowledge and experience in specialized domains such as corporate management and legal affairs and accounting, and can proactively offer suggestions, proposals, and opinions on DENSO's management issues.
|Independent officers||4 persons (outside board members: 2 persons, outside auditors: 2 persons)|
Management Oversight Functions
Two standing corporate auditors and three external auditors with dedicated staff are responsible for monitoring the execution of duties by directors as well as the business operations and financial conditions of DENSO Corporation and its domestic and overseas subsidiaries.
Under the Company's audit system, in addition to corporate auditors, who implement legally mandated functions, specialized internal audit departments have been established in key Group companies in Japan and overseas. These departments conduct ongoing on-site audits not only of legal compliance but also of the appropriateness of management and operational procedures. Aside from attending important meetings such as Board of Directors' meetings, corporate auditors fulfill their management oversight function by auditing directors' business execution through information exchange with internal audit departments, departments related to internal controls, and the Accounting Auditor.
Development and Reinforcement of Internal Controls
With the aim of undertaking fair and efficient business operations, we formulated the DENSO Basic Policies for Internal Control. We have stipulated basic policies for control as well as various rules and systems in areas that form the basis of our management, such as the code of conduct, management systems, risk management, and compliance. We make revisions and changes when necessary after undertaking regularly scheduled annual verifications of the status of implementation.
DENSO Corporation will continue to make efforts to build an optimal governance structure that considers changes in the business environment inside and outside the Company.