Konica Minolta 2007 Annual Report Download - page 33

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while executive officer compensation packages consist of
three components, “fixed compensation”, “performance-
based compensation” as a short-term incentive and “stock
remuneration-type stock options” as a long-term incentive with
the Group’s compensation policy standard being a 60:20:20
mix of those three type of compensation. As the Group believes
that it is important to clarify the degree and nature of the
performance-based compensation in the compensaiton policy,
Konica Minolta discloses more information in its business
reports than is required by Japan’s Company Law regarding the
structure of executive compensation and the total amount of
each type of compensation.
The Audit Committee reviews directors’ and executive
officers’ decisions for legality and appropriateness, reviews
internal control systems and reviews and determines the
selection of accounting auditor. The Audit Committee Office
specifically assigned to support the Audit Committee has been
established as a necessary support function for the committee
to properly execute its duties, and in addition to functioning as
the secretariat for the Audit committee, performs its duties
under the direction of the committee.
Each executive officer in charge of the Corporate Audit
Division, Risk Management Committee, and Compliance
Committee that are an integral part of the Group’s system of
internal controls is to report on a regular basis to the Audit
Committee, and is required to report in a timely manner to the
committee on any issues of pressing importance and the status
of work on these issues, or as required by the Audit Committee.
The designated audit members elected by the Audit Committee
can attend Executive Meetings or other management meetings
when necessary, and can request the executive officers in
charge of the Corporate Audit Division, Risk Management
Committee, and Compliance Committee to conduct research or
prepare reports.
While Konica Minolta Holdings, Inc. has established an Audit
Committee, subsidiaries including business and common function
companies have established their own company auditors.
The Audit Committee, Corporate Audit Division and auditors
in business and common function companies work to improve
audit efficiency and effectiveness while maintaining their
independence and communications.
In order to support an enhanced corporate governance
function, a Board of Directors Office has been established to
provide support for the Board of Directors as well as the
Nominating Committee and the Compensation Committee. In
addition, the Board of Directors Office supports the Company’s
outside directors by providing them with regular information
updates, pre-meeting explanations of Board agenda items, and
conducting secretarial work including arranging informal
meetings with the Chairperson of the Board as well as the
President and visits to the Group’s domestic and overseas
operational sites.
The objective of Konica Minolta’s compliance efforts is to
ensure compliance with laws, regulations, corporate ethics and
internal regulations in all of its business activities. In order to do
this, the Group has created the Konica Minolta Group Conduct
Guidelines. Through these guidelines, the Group is working to
enhance corporate value and to ensure the trust of all of its
stakeholders. In addition to the appointment of a compliance
officer, the selection of a support and promotion department and
the establishment of a Compliance Committee, the Group has
established a help line as a contact point for consultations
regarding compliance issues for the entire Group.
Konica Minolta has established a J-SOX Project Team and has
begun preparations for the introduction in Japan of the
“Financial Products Exchange Law” from April 2008.
Preparations are executed in four phases for the establishment
of an internal control system for all Group companies that are
subject to consolidation. In addition, the Group is working to
create a system to prevent mistakes in the preparation of
financial statements as well as in the financial disclosures
themselves and to ensure their appropriate disclosure.
Through these activities, Konica Minolta intends to realize
a highly transparent corporate governance structure and to
enhance corporate as well as shareholder value in the process.
J-SOX Project Team Action Plan
Phase 1 Create a comprehensive plan
(completion by March 2007)
Phase 2
Create documentation for internal
control system (implement in fiscal year
ending March 2008)
Phase 3 Evaluate status of preparations and
operations
Phase 4 Further improvement
Complete a robust system by the end of March 2008