Square Enix 2006 Annual Report Download - page 14

SQUARE ENIX CO., LTD.
Corporate Governance
1. Basic Perspectives on Corporate Governance
The Company has adopted a statutory auditors system.
To strengthen monitoring functions and further ensure
sound management, half of the statutory auditors are
from outside. Also, in line with Company standards and
guidelines on decision authority, the Board of Directors,
which focuses on enterprise-level management decisions,
and decision-making committees related to business exe-
cution are clearly divided. Through these measures the
Company is undertaking efforts to optimize and make
more efficient managerial decisions and execution of
operations.
2. Implemented Measures
(1) Management and other corporate governance
systems regarding decision making, execution
and monitoring of business operations
The Company has six directors (one outside) and four
statutory auditors (two outside and one standing statu-
tory auditor). The term for directors is one year-the same
as in the “Company with Committees” system-and half
of the statutory auditors are from outside.
There is also a stand-alone internal audit staff whose
responsibilities include communicating with the Board of
Auditors and the independent audit firm and performing
regular checks and evaluations of the internal manage-
ment structure, including Group companies-taking into
account priorities and risks. The staff then reports and
offers advice directly to the president.
The Board of Directors meets at least once a month
and enhances mutual checking by vigorous discussions
among the directors, including one outside director.
The Board of Auditors also meets at least once a
month, and performs account and operation auditing
based on audit policies. The auditors also attend the
Board of Directors’ meetings and audit the directors’
exercise of duties.
Regarding the utilization of outside independent
professionals, significant legal issues and events are
consulted with several outside counsels as needed.
Accounting issues are reviewed by an independent audit
firm, ChuoAoyama PricewaterhouseCoopers, under
the Commercial Code of Japan and the Securities and
Exchange Law.
In this fiscal year, certified public accountants in charge
are as follows:
•Certified Public Accountants
Partner staff: Shigeo Kobayashi, Yasuhisa Yajima
•Supporting staff
Certified public accountants: 7; Assistants: 4;
Others: 2
Remuneration for Directors and Auditors
Remuneration for directors stood at ¥332 million
(including ¥6 million for an outside director).
Compensation for auditors came to ¥30 million
(including ¥12 million for outside auditors).
Compensation for Independent Audit Firm
The Company has paid compensation of ¥57 million
to ChuoAoyama PricewaterhouseCoopers for auditing
as defined in the Certified Public Accountants Law
Article 2 No. 1.
(2) Personal, financial or business relationships and
any conflict of interest between the Company
and independent directors/auditors
No items specified.
(3) Basic policy on building an internal control system
On May 8, 2006, the Board of Directors passed a resolu-
tion concerning the “basic policy on building an internal
control system.” Since then, the Company has been
maintaining and promoting this policy to reinforce its
auditing and supervisory functions. In addition to ensur-
ing that the execution of business operations complies
with laws, regulations and the Company’s articles of
incorporation, this policy
also promotes enhanced efficiency in the directors’ exer-
cise of duties.