Canon 2008 Annual Report Download - page 19

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17
Basic Po
l
icy an
d
Corporate Governance Structure
Canon recognizes that strengthening management supervision
functions and maintaining management transparency are vital to
improving its corporate governance structure and raising corporate
value. Canon’s basic
g
overnance structure comprises the General
Meetin
g
o
f
Stockholders, the Board o
f
Directors and the Board o
f
Corporate Au
d
itors. Furt
h
ermore, t
h
e Executive Committee an
d
mana
g
ement committees are
d
e
d
icate
d
to a
dd
ressin
g
k
e
y
issues.
All of these bodies work to
g
ether to ensure the appropriate man
-
agement of the Group through an independent internal auditing
structure centered on the Cor
p
orate Audit Center and an informa
-
tion disclosure system for management activities
.
B
oa
r
d
of
Dir
ecto
r
s
Important business matters are discussed and rati
fi
ed durin
g
meetin
g
s o
f
the Board o
f
Directors and Executive Committee,
which are attended, in principle, b
y
all directors. As o
f
December
31
,
2008
,
the Board consisted of 25 directors. In order to realize a
more streamlined and effi cient management decision-making
process, Canon
h
as not a
d
opte
d
an outsi
d
e
d
irector system. T
h
e
main reason why directors are chosen from among Canon person-
nel is that they have followed the same codes of behavior and have
been sub
j
ect to close scrutin
y
within the Group over man
y
y
ears
.
Executive Offi cer S
y
ste
m
On April 1, 2008, Canon adopted an executive o
ffi
cer s
y
stem.
Takin
g
into consideration the
g
rowth in the scope of its
scale of operations, Canon recognizes the need to bolster its
management execution structure. T
h
e Company is en
d
eavoring
to realize more fl exible and effi cient management operations by
maintaining an appropriately sized organization of directors and
promotin
g
capable human resources with accumulated execu
-
tive knowled
g
e across speci
fi
c business areas. To this end,
Canon will
g
raduall
y
increase the number o
f
executive o
ffi
cers
and
f
urther solidi
fy
its mana
g
ement s
y
stems.
Executive offi cers are appointed and dischar
g
ed b
y
the
Board of Directors and have a term of offi ce of one year. The
number of executive offi cers was 10 as of A
p
ril, 2009
.
A
u
d
iting System
The Compan
y
has
fi
ve corporate auditors, includin
g
three outside
auditors who have no personal or business a
ffi
liations with Canon.
Auditors’ duties include attendin
g
meetin
g
s o
f
the Board o
f
Direc
-
tors, Executive Committee an
d
various mana
g
ement committees,
listenin
g
to business reports from directors, carefull
y
examinin
g
documents related to important decisions and conducting strict
audits o
f
the Group’s business and assets. Corporate auditors also
work closel
y
with accountin
g
auditors and the Corporate Audit
Center
,
which
,
with 58 members as o
f
December 31
,
2008
,
monitors comp
l
iance, ris
k
mana
g
ement an
d
interna
l
contro
l
s
y
stems an
d
provi
d
es assessments an
d
recommen
d
ations.
I
nterna
l
Contro
l
Committee
The Internal Control Committee, established in 2004, ensures the
reliability of fi nancial reporting. It also conducts reviews of the
Group’s internal controls in order to gauge the true e
ffi
ciency o
f
business operations, supports compliance with all related laws and
internal re
g
ulations and implements sound internal controls. In
response to t
h
e Sar
b
anes-Ox
l
e
y
Act, inc
l
u
d
in
g
Section 404 t
h
at
came into force durin
g
2006, Canon continues to reinforce inter
-
na
l
contro
l
systems an
d
imp
l
ement a
ll
appropriate measures.
In or
d
er to strengt
h
en interna
l
contro
l
s, Canon con
d
ucts
com
p
rehensive evaluations of internal controls across areas that
include accounting, management oversight, legal compliance, IT
systems and the promotion o
f
corporate ethics. As o
f
December
31, 2008, internal control over
fi
nancial reportin
g
has been as
-
sessed as e
ff
ective b
y
the mana
g
ement and the independent
re
g
istered public accountin
g
fi
rm. (Please re
f
er to pa
g
es 95 and 97)
Other Cor
p
orate Governance Committee
s
Canon’s management committees are integra
l
to its overa
ll
governance system. Key among these are the Corporate Ethics
and Compliance Committee, which discusses and approves
compliance and corporate ethics policies, and the Global Legal
A
ff
airs Coordination Committee, which anal
y
zes trends in le
g
al
developments and works to raise the level o
f
emplo
y
ee
awareness re
g
ardin
g
important le
g
al issues
f
acin
g
the Group.
Compliance training via e-learning is conducted
f
or employees at
Ca
n
o
n
U
.
S
.A.