Fujitsu 2010 Annual Report Download - page 73

The smooth functioning of the Executive
Nomination Committee and Compensation
Committee will be extremely important for
corporate governance going forward.
——Hiroshi Mitani
execution divisions, including advice regarding management
and how to improve effectiveness.
In October 2009, Fujitsu established an Executive Nomina-
tion Committee and a Compensation Committee, and its new
management execution structure now has many younger mem-
bers. I feel that the smooth functioning of these committees will
be extremely important in terms of corporate governance.
What issues do you think need to be addressed
going forward?
Mitani: I think that more discussion is needed on which
issues will be taken up by the Board of Directors, instead of
waiting for issues to be brought
up. For example, the Board
needs to have a common
understanding of the strategic
targets, and the medium- and
long-term goals of the business
execution teams. There are
topics, like the strategic targets,
which the Board can take up more actively for discussion. The
Board of Directors must fully understand and discuss the
balance in the strategic targets and the measures taken to
achieve them. In this sense, I feel it would be good for the
Board to express a little more commitment to the strategic
targets of the business execution teams. It’s particularly nec-
essary for the Board to provide clear commitment in cases
where specific target figures are announced, which could be
considered an external pledge.
Yamamuro: The sheer size of the company causes many
concerns. For example, it’s often difficult to discern how indi-
vidual M&A proposals will fit with overall business strategies.
What do you think of the support structure for
auditing operations?
Yamamuro: I think the support structure is sufficient. How-
ever, since Fujitsu’s business is weighted heavily toward busi-
ness to business, and covers a wide range of categories, I
would like Fujitsu to provide more opportunities for those of
us outside the company to gain a deeper understanding of
the business.
Mitani: We receive detailed reports from the standing audi-
tors on Fujitsu’s Board of Auditors, so I think the structure is
sufficient to allow us to obtain any information necessary. The
company’s intranet, called Pro-
jectWeb, is also extremely useful,
as it allows us to review docu-
ments related to the Board of
Directors. I plan to offer more
advice on how to enhance the
structure further.
From the perspective of an outside auditor, how
do you think the Board of Directors performed
regarding the resignation of the former president,
Kuniaki Nozoe?
Mitani: I consider this to be an issue of risk management. Risk
management is important in a wide variety of situations, and
this was a case of risk management involving the most impor-
tant aspects of corporate governance at Fujitsu. Nozoe’s
actions in maintaining a business relationship with a certain
business group, despite warnings from advisors to sever his
relationship because it was in conflict with the Fujitsu Way,
constituted an extremely large risk in terms of corporate gov-
ernance. In this sense, it is clear that the actions of Nozoe were
not those that should be taken by the president, who must be
the highest embodiment of the Fujitsu Way. Asking for his
resignation as a preventative measure before the risk became
evident was an extremely difficult decision, and the directors
and auditors at that time, while agonizing over the decision,
made the difficult call. In a way, I think that this case demon-
strates the exceptionally good functioning of Fujitsu’s corpo-
rate governance and risk management structure. The
fundamental issue in this case was the utter lack of awareness
of risk on the part of the president. The outside directors and
auditors were kept well informed in the course of dealing with
the issue, and I sincerely hope that the public understands that
the decision was made in consideration of everyone’s opinion,
and that process produced the resulting resignation.
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FUJITSU LIMITED Annual Report 2010
Interview With Auditors