Square Enix 2007 Annual Report Download - page 14

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Corporate Governance
1. Basic Perspectives on Corporate Governance
The Company has adopted the Corporate Auditor System for its
corporate governance. To strengthen monitoring functions and
further ensure transparent management, half or more of the
corporate auditors are persons outside the Company. In addition,
the Board of Directors, which focuses on managerial decisions,
is clearly separated from decision-making bodies in charge of
the execution of operations, in accordance with the objective
standards provided under the Company’s internal decision-
making authority rules. Through such measures, the Company
seeks to optimize the efficiency of managerial decisions and the
execution of operations.
2. Implemented Measures
(1) Management and other corporate governance
structures for decision-making, execution of
operations and auditing
The Company’s Board of Directors consists of five directors
(including one outside director). The Company has four
corporate auditors, (all of whom are outside, including one
standing corporate auditor). The term for directors is one year,
the same as for companies using the Committee System.
The Company has an Auditing Division, which performs a
stand-alone internal audit function and reports directly to the
president. Auditing Division performs regular checks and
evaluations of internal control structures, including those of
Group companies, taking priorities and risks into account,
while communicating with the Board of Auditors and the
independent audit firm. The Auditing Division provides reports
and advice directly to the president.
The Board of Directors meets, in principle, once a month and
enhances mutual checking through vigorous discussion and
exchanges of opinions among the directors, including the outside
director.
The Board of Auditors also meets once a month, in principle,
and conducts accounting and operational audits based on the
audit plans. The corporate auditors attend Board of Directors’
meetings and audit directors’ execution of duties.
Regarding the utilization of outside independent professionals,
the Company consults with several outside counsels, as needed,
on significant legal issues and affairs. The Company retains
Ernst & Young ShinNihon as its statutory audit firm under the
Companies Act and the Securities Exchange Law to perform
independent third-party accounting audits and fully cooperates
with them to ensure the smooth performance of their duties.
The following certified public accountants (CPAs) conducted
audit operations for the Company during fiscal 2006.
●CPAs performing the audit
Partners: Koichiro Watanabe, Norimasa Yaguchi, Kenichi Shibata
●Personnel providing audit assistance
13 CPAs and 17 assistant CPAs
●Remuneration to Directors and Auditors
Remuneration paid to directors totaled ¥234 million, of which
¥6 million was paid to the outside director.
Remuneration paid to corporate auditors totaled ¥31 million,
of which ¥12 million was paid to outside corporate auditors.
●Compensation to Independent Audit Firm
Compensation paid to Ernst & Young ShinNihon for contracted
services prescribed by Article 2, Paragraph 1, of the Certified
Public Accountants Law amounted to ¥47 million.
(2) Personal, financial, business or other relationships
constituting conflicts of interest between the
Company and its outside director and outside
corporate auditors
There are no such relationships to be specified.
1. Basic Perspectives on Corporate Governance
2. Implementation Status of Corporate Governance
Measures
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