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Corporate Governance

Basic Philosophy

The ShinMaywa Group places top priority on conducting its business in compliance with relevant laws and regulations, social norms, and common sense, as well as on ensuring transparency and rationality in the group's management in order to improve our corporate value.

Striving to Achieve Robust Governance

In light of the style and scale of ShinMaywa's business, the company has established a board of corporate auditors and, in accordance therewith, introduced a system of executive officers. The latter is intended to strengthen management functions by transferring authority over each of the company's business operations to an executive officer, thus speeding up the decision-making process and clarifying management responsibilities. The executive officer system also aims to enhance governance by enabling directors (i.e., members of the Board of Directors) to concentrate on assessing individual business operations from a company-wide perspective as well as supervising and making decisions regarding management resource allocation.

Furthermore, ShinMaywa has set the term of office for directors and executive officers at one year in order to clarify the responsibilities of company management and better assess their performance. We also have a Management Personnel Committee, which acts as an advisory body to the president to further improve the transparency and appropriateness of management personnel affairs and compensation. The majority of the committee members are outside directors and other independent experts such as lawyers and university professors.

Currently, ShinMaywa has six directors, including two from outside the company. (The Articles of Incorporation stipulate that the company may have no more than eight directors.) The Board of Directors meets monthly to decide on matters important to the management of the company and monitor the directors' execution of their duties as appropriate.

The company also has thirteen executive officers, five of whom are managers of each of the company's divisions. The executive officers' duties are focused on carrying out the business of the various divisions. They are also members of the Management Committee, an advisory body to the president that, in principle, meets twice a month to discuss important matters related to the management of ShinMaywa.

There are also five corporate auditors, three of whom are outside auditors. In addition to attending meetings of the Board of Directors and other important in-house meetings, corporate auditors receive business reports from directors and employees and inspect documents submitted for executive approval.

The company has engaged Grant Thornton Taiyo ASG as its accounting auditor in place of Ernst & Young ShinNihon, whose contract with the company expired at the end of the 2009 annual general meeting of shareholders. A robust platform is in place to ensure accurate management information is provided to the auditor so that accounts can be audited fairly.

As part of our compliance efforts, we have established a set of Ethical Standards as guidelines for all employees to act in accordance with laws, regulations, social norms, and common sense. In addition, "ShinMaywa Ethics Day" and "Corporate Ethics Month" have been created in an effort to promote compliance awareness and ensure the company's various systems become more firmly established throughout the company. Furthermore, the company has established the CSR and Quality Assurance Division to centralize control and clarify responsibility regarding compliance activities, CSR, and quality assurance of products and services. The company, at the same time, created a framework under which the division is, in turn, evaluated, inspected, and provided with guidance and advice by the Corporate Ethics Expert Committee, which is comprised primarily of independent members from outside the company.

Moreover, ShinMaywa endeavors to eliminate compliance risks by performing internal audits and making use of the Corporate Ethics Consultation Section (a corporate ethics helpline) as means of early problem detection and self-governance.

Company’s Management System

An overview of the Company’s management system.