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Non-financial (ESG) Information

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1 Corporate Governance


Basic Stance

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 quickly changing global marketplace. It is also essential to promoting CSR management that is essential for sustainable growth on an ongoing basis. We are working to strengthen our corporate governance in accordance with this belief.

Promotion Structure

DENSO Corporation has adopted a corporate auditor system. In addition to statutory bodies such as the General Meeting of Shareholders, Board of Directors, Board of Audit and Supervisory Board Members and Accounting Auditor, DENSO Corporation has developed various internal control mechanisms. For rapid decision making and the execution of our operations, we have adopted an executive officer system that separates and clarifies the roles of the Board of Directors that is charged with management (decision making / oversight) and the senior managing directors and managing officers who are responsible for business execution.

Corporate governance system

Overview of Corporate Governance SystemAs of June 20, 2014

Format Audit & Supervisory Board system
Number of directors 14
Number of outside directors 2
Term of directors 1 year
Number of Audit and Supervisory Board members 5
Number of outside Audit and
Supervisory Board members
Number of meetings of Board of Directors 13
Policy regarding incentives for directors Stock option system
Number of independent officers 4
Remuneration disclosure Disclosure of total figure
Retirement benefit allowance system for
Audit and Supervisory Board members

※Total for the period from April 2013 to March 2014

Director Remuneration

Monthly remuneration has been set within the range of the maximum amount of total compensation (Directors: ¥80 million a month; Audit and Supervisory Board members: ¥15 million a month) determined by resolution at a General Shareholders' Meeting. Upon receipt of the Board of Director's authority, the representative director decides the monthly remuneration of each director on the basis of Company-set criteria, the remuneration of each Audit and Supervisory Board members being decided following consultation with the auditor.

Following approval by resolution at an Ordinary General Shareholders' Meeting, a number of stock options are granted to directors by rank. However, since it was difficult to offer stock options as an incentive following the chaos in the markets, the stock options granted up to and including fiscal 2010 were continued until the end of the period in which they could be exercised, and stock options not granted from fiscal 2011 onward. Following its resolution at an Ordinary General Shareholders' Meeting, bonuses to be paid to the Board of Directors receives approval. The amount of bonus for each director, which takes into account the level of contribution directors have made to the Company, is then determined by the representative director upon receipt of the Board of Directors' authority.
At the Board of Directors' meeting held on May 12, 2014, a resolution was passed abolishing the payment of bonuses to auditors to further strengthen auditor independence with regard to management.

Compensation of Directors

Compensation of Directors and Audit and Supervisory Board members for fiscal 2014 is as follows.

Position Total
(¥ million)
Total compensation by type (¥ million) Directors /
Audit and
Base Stock
Base Retirement
Directors 989 573 416 16
Audit and
96 58 38 2
32 23 9 3

2 Compliance


Basic Stance

We believe that key actions to earn the trust and understanding of society pertain to the DENSO Group's observance of all applicable national and regional laws and all Group associates' fair and faithful conduct with the highest ethical standards. We see compliance as not only the observance of laws but also a responsibility to meet the expectations of stakeholders. In this sense, we consider it to be the cornerstone of all conduct.

Based on this recognition, in 2006 we adopted the Code of Conduct for DENSO Group Associates, which clearly indicates the standards of conduct for each and every associate. While developing the Code of Conduct for DENSO Group Associates, we consulted the United Nations Universal Declaration of Human Rights, United Nations Global Compact, OECD Guidelines for Multinational Enterprises, and the Charter of Corporate Behavior formulated by Nippon Keidanren (Japan Business Federation). Since the Code was adopted, we confirm the Code in training and workplace activities and utilize it for raising CSR awareness of associates.

Overseas Group uses a regional version of the Code of Conduct for DENSO Group Associates formulated by their regional headquarters in accordance with national and regional laws and customs.

Key Items in the Code of Conduct for DENSO Group Associates

I. Your conduct as a member of the DENSO Group
Recognizing your role in society / Integrity as the foundation of trust / Compliance with laws and ethical principles
II. Creating a vibrant workplace
Understanding DENSO's philosophy and values and pursuing personal development / Respecting human rights, ensuring open communication and respecting the privacy of others / Maintaining mental and physical health and maintaining a healthy workplace / Maintaining order and ethics in the workplace / Maintaining a clear distinction between public and private matters
III. Earning trust and meeting the expectations of customers
Remembering to express appreciation, providing ureshisa (consideration) and yasashisa (fulfillment), and providing timely and sincere solutions / Transactions based on free and fair competition
IV. Building win-win relationships with our suppliers
Adherence to laws related to competition such as antitrust laws and subcontracting laws as well as the contract conditions of agreements with suppliers and affiliated service stores / Respecting intellectual property rights
V. Living up to the trust and expectations of our shareholders
Managing corporate assets effectively and preventing risk / Practicing proper accounting / Managing inside information
VI. Upholding the best interests of society
Pursuing eco-friendly practices / Serving as a member of your community / Taking a forceful stand against anti-social organizations and ensuring moderate relationships with governmental authorities / Serving as a member of the automotive industry

3 CSR Promotion System


Basic Stance

In our corporate philosophy, we describe our mission as "contributing to a better world by creating value together with a vision for the future."
Cooperating, collaborating, and sharing values with our many stakeholders are indispensable to achieving this mission based on corporate behavior that earns the trust and support of society. To ensure that all Group companies conducting business worldwide put this philosophy into practice, we adopted the DENSO Group Declaration of Corporate Behavior in April 2006, making clear our responsibility to stakeholders. We have placed corporate social responsibility (CSR) at the core of our management and are working to contribute to building a sustainable society through our business activities.

Promotion Structure

In 2006, we established the CSR Promotion Meeting (secretariat: CSR Promotion Center), which is chaired by the president and in which the basic policies behind CSR activities are discussed and examined. The meeting is held twice yearly to set the direction for and make decisions on CSR management and to confirm the progress of CSR-related activities.

To lead the way in promoting CSR at workplaces and Group companies, we select one CSR leader at each department and company in line with efforts to permeate and firmly establish CSR.

Promotion structure

4 Risk Management


Basic Stance

In keeping with the global expansion of business, the DENSO Group is striving to strengthen risk management as part of its internal control system to help minimize risk. Specifically, emergence of circumstances with the potential to cause damage to corporate management are classified as risks (situations in which risks have not yet been realized) and crises (emergency situations in which risks have already been realized). For the former, efforts focus on nipping risks in the bud before they have the chance to manifest themselves; for the latter, DENSO strives to make an initial response and response for restoring business operations in a prompt and appropriate manner.

Promotion Structure

We selected 55 risk items with the potential to impact life, credit, business activities, or property; and designated a responsible department for each. Activities for ongoing improvement in the risk management system and structure and permeation of risk management are now the domain of the CSR Promotion Meeting, while the Risk Management Meeting deals with initial response when a crisis or emergency situation arises. We also form specialized contingency organizations depending on the extent of the situation and degree of urgency, which facilitates agile response to minimize damage.

We integrated the traditional roles of the general risk manager into those of the CSR leader at domestic and overseas companies subject to our managerial consolidation rules as well as Group companies in which DENSO Corporation is the largest shareholder, and appointed risk managers for each risk item under that umbrella. We are constantly working to upgrade our risk management based on support from key functional departments and overseas regional headquarters.