Honda 2008 Annual Report Download - page 42

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Accounting Audits
KPMG AZSA & Co. provided auditing services for Honda under
the Company Law, the Financial Instruments and Exchange Law,
and the U.S. Securities Exchange Act.
A total of 52 people from KPMG AZSA & Co. provided auditing
services for Honda: three Japanese certified public accountants
(Masanori Sato, Kensuke Sodegawa, and Hideaki Koyama) and
49 assistants (10 certified public accountants, 17 assistant ac-
countants, four U.S. certified public accountants, and 18 others).
In fiscal 2008, the Company and its consolidated subsidiaries
paid a total of ¥3,042 million in fees to KPMG AZSA & Co. and
its affiliated accounting firm, KPMG, for audit certification services
under the Company Law, the Financial Instruments and Exchange
Law, and the U.S. Securities Exchange Act. In fiscal 2008, the
Company’s overseas consolidated subsidiaries paid a total of
¥137 million in fees to KPMG AZSA & Co. and its affiliated ac-
counting firm, KPMG, for non-auditing services.
Policy and Procedures for Obtaining Board of Corporate
Auditors’ Prior Consent
To ensure that the independent auditor and its affiliate involved in
audit certification services under the U.S. Securities Exchange Act
behave in accordance with all applicable laws and regulations and
maintain complete independence from the Company, they must
obtain the prior consent of the Company’s Board of Corporate
Auditors before they carry out auditing services, auditing-related
services, tax services, and other services for Honda.
The Company’s initial policy required that each contractual
agreement have a separate prior consent from the Board of Cor-
porate Auditors. In order to make the decision-making process
more efficient, however, we are enhancing procedural efficiency by
establishing categories of matters requiring comprehensive prior
consent. These categories are reviewed regularly by the Board of
Corporate Auditors.
Any matter that does not fall under one of these categories still
requires separate consent of the Board of Corporate Auditors.
Organization
As for execution of business, the Company has six regional opera-
tions around the world to develop business based on its funda-
mental corporate philosophy. These operations adopt long-term
perspectives and maintain close ties with local communities.
The Company’s three business operations—motorcycles,
automobiles, and power products—formulate the medium- and
long-term plans for their business development, and each opera-
tion aims to maximize its business performance on a global basis.
Each functional operation—such as Customer Service Opera-
tions, Production Operations, Purchasing Operations, Business
Management Operations, and Business Support Operations—
supports the other functional operations, with the aim of increas-
ing Honda’s effectiveness and efficiencies.
Research and development activities are conducted princi-
pally at the independent subsidiaries of the Company.
Honda R&D Co., Ltd., is responsible for research and devel-
opment on products, while Honda Engineering Co., Ltd., handles
research and development in the area of production technology.
The Company actively carries out research and development in
advanced technologies with the aim of creating products that are
distinctive and internationally competitive.
Business Execution Officer System
The Company has assigned a general manager from the Board of
Directors or an operating officer to each regional, business, and
functional division, as well as to each research and development
subsidiary. By ensuring swift, optimal decision making in each re-
gion and workplace, the Company is building a highly effective
and efficient business execution system.
Executive Council
The Company has established the Executive Council, consisting of
the President, Vice President, and the Senior Managing Directors
(for a total of nine members). Along with discussing in advance
the items to be resolved at meetings of the Board of Directors,
the Executive Council discusses important management issues
within the scope of authority conferred upon it by the Board of
Directors.
In fiscal 2008, the Executive Council met 29 times.
Regional Operating Boards
To enhance the independence of each regional operation and en-
sure swift decision making, regional operating boards have been
established at each regional operation to discuss important man-
agement issues in the region within the scope of authority con-
ferred upon it by the Executive Council.
Corporate Governance
Business Execution System
Annual Report 2008
40