Mazda 2013 Annual Report Download - page 26

Business Management System
Corporate Governance
Mazda views the enhancement of corporate governance as one of
its most important management issues, and along with statutory
bodies including the General Meeting of Shareholders, Board of
Directors, and Audit & Supervisory Board, the Company has
introduced an executive officer system to separate execution and
management functions.
This is intended to expedite decision-making by increasing the
effectiveness of the Board of Directors as a supervisory body, by
enhancing the deliberations of the Board of Directors, and by
delegating authority to executive officers.
As of June 30, 2013, Mazda’s Board of Directors is composed of
10 members, two of whom are outside corporate directors with a
high degree of independence.
Inauguration of an Outside Corporate Director System
At the shareholders’ meeting held on June 24, 2011, Mazda
appointed two outside corporate directors, inaugurating the
Outside Corporate Director System with the objective of further
increasing management soundness and transparency. The outside
corporate directors are expected to help strengthen the auditing
functions of the Board of Directors and further boost the
transparency of management by offering advice on Mazda’s
management activities based on their knowledge, experience, and
insights, and by taking part in the decision-making process.
Management Auditing
Mazda’s Audit & Supervisory Board has five members, including
three outside audit & supervisory board members who have no
business relationship or other interests with Mazda, and audits the
directors in the performance of their duties as per an annual audit
plan formulated by the Audit & Supervisory Board. Aside from
statutory attendance at the Board of Directors meetings, the audit
& supervisory board members also attend management meetings,
etc. KPMG AZSA LLC is retained under contract as Mazda’s
independent auditor.
Cooperation among Parties Responsible for Auditing
A “Three-Way Audit Meeting” of the audit & supervisory board
members (full-time), the auditing company, and the Global
Auditing Department is held four times every year, primarily to
discuss the status of progress with regard to auditing under the
Japanese Sarbanes-Oxley Act (J-SOX)* and issues related to the
auditing of business operations and accounting.
Regular meetings of the full-time audit & supervisory board members
and the Global Auditing Department are held monthly to exchange
opinions in further detail regarding issues identified in audits.
* The Japanese version of the Sarbanes-Oxley Act (original Sarbanes-Oxley Act is a
U.S. federal law)
Internal Controls
Mazda initiated a system of self-diagnosis of internal controls in
1998, and this is currently carried out at almost all consolidated
Mazda Group companies in Japan and around the world.
Departments primarily responsible for internal controls
cooperate with other related departments to provide training and
support, working to promote internal controls to ensure that
operations proceed smoothly in all departments and consolidated
Mazda Group companies.
Mazda also has in place its own framework of internal controls
conforming to the COSO Report*, a global framework for internal
controls, and the implementation standards of J-SOX. This
framework helps to ensure the validity of financial reports, the
promotion of compliance, the improvement of operational
efficiency, and the maintenance of corporate assets.
* Report outlining a comprehensive framework for internal controls, released by the
U.S. organization, Committee of Sponsoring Organizations of the Treadway
Commission (COSO)
For more information about corporate governance and CSR, please
refer to “Mazda Sustainability Report 2013.”
http://www.mazda.com/csr/download/
Mazda Internal Controls
Corporate Governance Framework
General Meeting of Shareholders
Selection/Dismissal
Reporting
Reporting Audit
Supervise
Consultation
Selection/Dismissal Selection/Dismissal
Independent Auditor
Executive Officers
Division General Managers, etc.
Executive Committee
and Other Advisory
Bodies
Board of Directors,
Directors
(10 corporate directors, of whom
two are outside directors)
Representative Directors
Audit & Supervisory Board,
Audit & Supervisory Board
Members
(Five, of whom three are outside
audit & supervisory board members)
Enhancement of IT Security
IT Security Management Regulations
Appointment of dedicated system auditors
Monitoring
Global auditing framework
Appointment of Global Auditing Department members as auditors
of Mazda Group companies, etc.
Information and Communication
Mazda Global Hotline
Audit Committee meetings with each overseas Mazda Group
company, etc.
Control Activities
Implementation of self-diagnosis on internal controls
Implementation of internal controls signoff, etc.
Risk Assessment
Self-diagnosis checklist on internal controls, etc.
Financial
Reporting Compliance
Efficacy/
Efficiency
Asset
Protection
Control Environment
The Mazda Corporate Ethics Code of Conduct
The Mazda Way, etc.
Mazda Annual Report 2013
24