Yamaha 2006 Annual Report Download - page 39

Yamaha Annual Report 2006 39
Enhancing corporate governance
Yamaha regards strengthening its corporate
governance systems to be one of its most
important issues to realize transparent, high-
quality management. To achieve this, Yamaha
introduced the Executive Officer System and
set up a Companywide Governance
Committee and an internal auditing system.
Yamaha has also adopted the corporate
auditor system to ensure the necessary
environment for effective daily business
auditing and to increase the effectiveness of
corporate governance systems.
Yamaha’s Board of Directors has overall
responsibility for formulating strategies of the
Yamaha Group, monitoring of and providing
guidance on business execution in each division,
and performing other managerial functions.
On June 27, 2006, Yamaha shifted to a
system in which five directors manage
groupings of business divisions and staff
divisions. The director in charge of each group
is responsible for its performance and for
evaluating the results of the divisions under
his/her control. Having directors in charge
of each group enables the effective sharing
of information on each group via Board of
Directors Meetings and Management Meetings,
thereby ensuring swift response to management
issues. As a general rule, executive officers
have been appointed to divisions responsible
for undertaking key management initiatives in
order to strengthen consolidated group
management and enhance business execution.
This helps clarify operating responsibilities for
each division and improve business efficiency.
Yamaha has formed the Companywide
Governance Committee, comprising the
Compliance Committee, the CSR Committee
and the Corporate Officer Personnel
Committee, to promote consistent practices
across-the-board.
The Compliance Committee deliberates
and decides on items concerning compliance
with laws, social norms and internal regulations
in business activities and enhancement of
ethics. The CSR Committee promotes
voluntary activities that contribute to society
with the objective of pursuing achievement of
autonomously established standards beyond
those required by law. The Corporate Officer
Personnel Committee is responsible for
discussing the selection of candidates for
the positions of director, auditor and executive
officer and thereby increasing the transparency
and fairness of the process for selection. It is
also responsible for considering programs for
nurturing future candidates for management
positions and management compensation system.
Developing internal control systems
Yamaha pursues the optimum in corporate
governance in order to enhance corporate and
brand value. At the same time, efforts are
made to improve the quality of internal control
systems as a means to enhancing the
effectiveness of business activities, the reliability
of accounting and financial information, and
compliance with laws and regulations, as well
as safeguarding assets and strengthening risk
management. The internal control project was
inaugurated in April 2006 to investigate the
effectiveness of existing internal control
systems and promote their systematic
redevelopment.
Compliance
The Compliance Committee was established in
2003 not only to enforce compliance but also to
set standards of behavior in line with social
norms, corporate ethics and internal regulations.
A Compliance Guide has been created to define
and explain operating rules. Yamaha also
conducts compliance training to convey its
stance on compliance to all employees. A
Compliance Help Line has been created to
further ensure compliance. A Compliance Code
of Conduct was revised in April 2006 to further
strengthen compliance throughout the group, in
both directors and employees.