Olympus 2015 Annual Report Download - page 26

Corporate Governance
Basic Stance toward Corporate Governance
The Olympus Group strives to realize better health and happi-
ness for people by being an integral member of society, sharing
common values, and proposing new values through its busi-
ness activities. We call this aim “Social IN” and have made
it the corporate philosophy that underlies all of our activities.
Based on this, the Company has established systems
toensure that the Olympus Group operates effectively and
efficiently and that its financial reports are appropriate and
reliable, and is pursuing ongoing improvements to these
systems. At the same time, we realize that incorporating the
diverse values and expectations of society into management is
important to fulfilling our corporate social responsibility (CSR).
For this reason, we actively communicate with a wide range
of stakeholders with the aim of fulfilling our responsibility to
society while also continuing to grow together sustainably with
it. Furthermore, the Board of Directors and other members
of management conduct periodic inspections to ensure that
all corporate officers and employees adhere to Olympus’
Corporate Conduct Charter, which is based on our corporate
philosophy. In this manner, we work to cultivate a corporate
culture that is respectful toward the rights and position of
stakeholders as well as good business ethics.
Corporate Governance Structure
Basic Corporate Governance Policies
Olympus fills the position of chairman of the Board of Directors
with a director that does not have business execution respon-
sibilities in order to establish a clear divide between business
execution and oversight functions. In addition, the Nominating
Committee and the Compensation Committee, both of which
were established voluntarily by the Company, consist of a
majority of highly independent outside directors and are also
chaired by such directors.
When selecting directors, the Company considers the
diversity of experience, knowledge, and skills of the Board of
Directors as a whole. We also secure sufficient time for meet-
ings of the Board of Directors to ensure that all directors are
able to fulfill their duties and responsibilities.
Overview of Corporate Governance Structure
The Board of Directors consists of 10 members, half of which
are outside directors. In principle, the Board of Directors meets
once per month and approves important management propos-
als made by the president, the highest authority for executive
management, while exercising appropriate oversight of busi-
ness execution. The term of directors is set at one year to
allow their performance to be evaluated on a yearly basis and
to clarify responsibility for this performance. Olympus expects
the five outside directors to apply their specialized expertise
in management by engaging in decision making and over-
sight over the Board of Directors from an independent per-
spective. Furthermore, the Board of Directors requests
reports on matters that are decided by the Executive Man-
agement Committee or by the president. In this manner, the
Company is strengthening governance from the perspectives
of sharing information and monitoring, thereby creating sys-
tems for better ensuring the soundness of management.
Olympus employs an executive officer system, which
segregates the decision-making function and supervisory
function of the Board of Directors from the business execution
function of the executive officers. In addition, the Company has
set a maximum tenure period for the president and a maximum
age for directors and executive officers. These restraints are
in place to prevent inappropriate activities from occurring
dueto extended tenures of corporate officers. The Executive
Management Committee, in principle, convenes three times
a month in order to aid the president in making important
management decisions through discussion of these matters.
This committee consists of members including the president
and heads of functional organizations. Also, audit & supervi-
sory board members and the Chief Compliance Officer (CCO)
attend meetings of this committee as observers, thereby
f urther reinforcing the oversight function for business
execution divisions.
Voluntarily Established Committees
Olympus has adopted the Company with Audit & Supervi-
sory Board system for its governance system, but has also
incorporated aspects of the Company with Nominating
Committee, etc., system by pursuing voluntary improve-
ments in governance functions through the establishment of
its independent Nominating Committee and Compensation
Committee. Furthermore, the Compliance Committee, which
is chaired by an outside director, was established as a body
to oversee and improve the compliance system.
Outside Directors and Audit & Supervisory Board Members
Olympus has strengthened the corporate governance structure
by appointing 5 outside directors, representing half of its 10
directors, and utilizing their objective standpoint, wealth of
experience, and extensive knowledge of management. Fur-
thermore, Olympus has increased the objectivity and fairness
of management oversight by appointing 2 outside audit &
supervisory board members out of the 4 audit & supervisory
board members.
Outside directors and audit & supervisory board members
receive reports from the Group’s Internal Audit Office about
internal audits at Board of Directors’ meetings. Outside audit
& supervisory board members also receive reports from both
the Internal Audit Office and the accounting auditor at Audit
& Supervisory Board meetings. In addition, outside audit &
supervisory board members meet with staff from the
Internal
Audit Office and the accounting auditor to share opinions
and otherwise coordinate their efforts. Furthermore, all 5
outside directors are independent directors and both audit &
supervisory board members are independent auditors.
Composition of Committees and Position of the Chairman
Outside directors Reason for appointment Attendance at meetings of the Board of
Directors (Met 17 times in scal 2015)
Takuya Goto* Mr. Goto was appointed so that his extensive experience and diverse knowledge as a
business manager at Kao Corporation may be applied to the Company’s management. 17/17
Shiro Hiruta* Mr. Hiruta was appointed so that his extensive experience and diverse knowledge as a business
manager at Asahi Kasei Corporation may be applied to the Company’s management. 17/17
Sumitaka Fujita* Mr. Fujita was appointed so that his extensive experience and diverse knowledge as a business
manager at ITOCHU Corporation may be applied to the Company’s management. 17/17
Motoyoshi Nishikawa*
Mr. Nishikawa was appointed so that his extensive experience and diverse knowledge as a
business manager at Nippon Steel Corporation (current Nippon Steel & Sumitomo Metal
Corporation) as well as his diverse knowledge as an attorney may be applied to the Company’s
management.
17/17
Keiko Unotoro* Ms. Unotoro was appointed so that her extensive experience and diverse knowledge acquired from
working at the Japan Fair Trade Commission may be applied to the Company’s management. 17/17
Outside audit &
supervisory board
members
Reason for appointment
Attendance at meetings of the Board of
Directors and the Audit & Supervisory Board
Board of Directors
(Met 17 times
in scal 2015)
Audit & Supervisory
Board (Met 26 times
in scal 2015)
Nobuo Nagoya* Mr. Nagoya was appointed so that his extensive experience and diverse knowledge as a certified
public accountant may be applied to the Company’s management. 17/17 26/26
Katsuya Natori*
Mr. Natori was appointed so that his extensive experience and diverse knowledge as a business
manager at Sun Microsystems, Inc., Fast Retailing Co., Ltd., and IBM Japan, Ltd., as well as his
diverse knowledge as an attorney may be applied to the Company’s management.
16/17 26/26
* Independent officers
Number of members Internal directors Outside directors Chairman (of the Committee)
Board of Directors 10 5 5 (5 independent directors) Non-executive director
Nominating Committee 3 1 2 Outside director
Compensation Committee 3 1 2 Outside director
Compliance Committee 4 — 2 Outside director
Overview of the Corporate Governance Structure
(As of June 26, 2015)
Corporate Governance Structure
Format Audit & Supervisory Board system
Adoption of executive officer system Yes
Directors 10
Of whom, outside directors 5
Term of directors 1 year
Audit & supervisory board members 4
Of whom, outside audit & supervisory
board members 2
Independent officers 7
Participation of outside directors in determination
of remuneration Yes
Board of Directors convened 17 times
Results-linked remuneration Yes
Audit
Discussions /
Proposals
General Meeting of Shareholders
Audit & Supervisory Board
2 standing and
2 outside audit & supervisory
board members
Board of Directors
5 directors
5 outside directors
Chairperson: Non-executive director
Executive Management
Committee
Chairperson: President
Observers: Auditors, CCO
President and Representative
Director
Functions divisions, business units, corporate divisions, and Group companies
Accounting Auditor
Assistance with
decision making
Cooperation Audit
Audit
Report
Cooperation
Appointment / Dismissal
Audit
Audit
Appointment / Dismissal
Election / Supervision
Cooperation Reports /
Suggestions
Appointment / Dismissal
Compensation Committee
Nominating Committee
Compliance Committee
Discussions /
Proposals
Report
CSR Committee
Internal Audit Ofce
Ofce of Audit &
Supervisory Board
49
OLYMPUS Annual Report 2015
48 OLYMPUS Annual Report 2015
Foundations Necessary for Growth