Pentax 2007 Annual Report Download - page 28

Corporate Governance
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Corporate Governance Systems
In June 2003, Hoya instituted a company-with-committees system.
By broadly devolving decision-making authority from the Board of
Directors to executive officers, the Company has set up a system
that helps executive officers improve business results by allowing
them to manage operations in a more timely and efficient manner.
At the same time, Hoya established three committees—the
Nomination Committee, the Compensation Committee and the
Audit Committee—which are distinct from the Board of Directors
and are composed of outside directors. The objectives are to
provide enhanced powers of supervision over the executive officers
and to ensure overall soundness and transparency of management.
The Board of Directors and the Three Committees
The eight-member Board of Directors comprises five outside
directors and three internal directors. To guard against the potential
for stagnation in the Board of Directors system, and to ensure
lively debate, Hoya has since 1989 been gradually reducing the
number of its directors. From a total of 17 in 1989, numbers have
fallen to the current eight. Further, to ensure that views can be
freely expressed, unconstrained by internal hierarchical structures
or personal relationships, the Company has invited outside
directors to participate in its management since 1995. Outside
directors provide managerial supervision and advice.
The Board of Directors meets every month, excluding
February and August. These meetings ensure that the outside
directors both oversee and offer advice to the executive officers in
their business activities, in an atmosphere that encourages lively
debate. Three internal directors serve concurrently as executive
officers. Authority has also been devolved from the executive
officers to the heads of each business division, who are
responsible for day-to-day business operations in their respective
areas of activity. These division heads make a detailed report to
the executive officers at monthly business reporting meetings, and
strategies for responding to each issue are discussed. Important
matters are all reported to meetings of the Board of Directors.
The Nomination Committee, Compensation Committee and
Audit Committee are all composed exclusively of outside
directors. The independence of the Committees and their
downstream organizations from the executive officers is ensured
by their decision-making authority, including the powers of
appointment and dismissal. All of the outside directors, who have
been invited from outside the Hoya Group, have plenty of
experience in management and possess international outlooks. All
of them can be expected to offer impartial and appropriate
opinions, taking the standpoint of our shareholders. At all
meetings of the Board of Directors and the three Committees,
they offer frank, genuine opinions.
● Nomination Committee
The Nomination Committee decides on the selection of
candidates for appointment as directors and executive officers,
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●Transitions in the Board of Directors
1994
1995
1999
2000
2001
2003
to present
10
8
7
6
6
8
Internal directors Outside directors
Year Total number of directors
For Hoya, corporate governance is a matter of utmost import to management. Based on its fundamental
philosophy that “companies are owned by their shareholders,” Hoya conducts its corporate management with
the goal of maximizing shareholder value. To ensure it does not operate according only to internal thinking on
management, Hoya has adopted a system of outside directors who to represent shareholders. While
strengthening its systems of corporate governance, the Company has also separated management and
execution functions to accelerate decision-making and increase management efficiencies.