Honda 2009 Annual Report Download - page 42

The Board of Directors consists of 21 directors, including two out-
side directors. The Board deliberates important matters related to
business execution and other items designated by law based on its
established deliberation standards, assesses business risk, and
then makes decisions on such matters after due consideration. The
Board also controls and supervises the execution of management.
During the fiscal year under review (April 1, 2008, to March 31,
2009), the Board of Directors met 10 times.
The Board of Corporate Auditors consists of five corporate auditors,
including three outside corporate auditors. In accordance with the
Company’s auditing standards, auditing policies, apportionment of
responsibilities, and other such matters as determined by the Board
of Corporate Auditors, each corporate auditor audits the directors’
execution of duties. Corporate auditors accomplish these audits
through various means, including attending meetings of the Board of
Directors and inspecting the state of the Company’s assets and lia-
bilities. In addition, a Corporate Auditors’ Office was established to
provide direct support to the Board of Corporate Auditors.
The Company maintains Standards for Reporting to Corporate
Auditors to ensure that relevant matters are reported to corporate
auditors in a timely and accurate manner. The standards require reg-
ular reports to be submitted to corporate auditors on the business
conditions of the Company and its subsidiaries, the maintenance
and operation of internal control systems, and any other matters
that would have a substantial impact on the Company or its sub-
sidiaries. In addition, corporate auditors are required to attend Ex-
ecutive Council and other important meetings. In fiscal 2009, the
Board of Corporate Auditors met 13 times.
The Board of Corporate Auditors has certified Hideki Okada, a
corporate auditor of the Company, as an “audit committee financial
expert,” as set out in the rules of the Securities and Exchange
Commission pursuant to Section 407 of the U.S. Sarbanes-Oxley
Act of 2002. As stipulated in Item 8, Article 121, of the Company
Law Enforcement Regulations, Hideki Okada has substantial
knowledge related to finance and accounting.
Candidates for directors are decided by resolution of the Board of
Directors. Candidates for corporate auditors are decided by resolu-
tion of the Board of Directors, subject to the agreement of the
Board of Corporate Auditors.
As for the execution of business, the Company has six regional op-
erations 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, auto-
mobiles, and power products––formulate the medium- and long-
term plans for their business development, and each operation
aims to maximize its business performance on a global basis. Each
functional operation––such as Customer Service Operations,
Production Operations, Purchasing Operations, Business Support
Operations, and Business Management Operations––supports
the other functional operations, with the aim of increasing Honda’s
effectiveness and efficiencies.
Research and development activities are conducted principally
at the independent subsidiaries of the Company.
Honda R&D Co., Ltd., is responsible for research and develop-
ment on products, while Honda Engineering Co., Ltd., handles re-
search and development in the area of production technology. The
Company actively carries out research and development in ad-
vanced technologies with the aim of creating products that are dis-
tinctive and internationally competitive.
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.
The Company has established the Executive Council, consisting of
the President, Vice President, and the Senior Managing Directors.
Along with discussing in advance the items to be resolved at meet-
ings of the Board of Directors, the Executive Council discusses im-
portant management issues within the scope of authority conferred
upon it by the Board of Directors.
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.
■ Board of Directors ■ Organization
■ Board of Corporate Auditors
■ Business Execution Officer System
■ Executive Council
■ Regional Operating Boards
■ Decisions Regarding Director Candidates
Annual Report 2009
40
Corporate Governance