Fujitsu 2006 Annual Report Download - page 37

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Annual Report 2006
앮 Corporate Governance
1. Basic Stance on Corporate Governance
We believe that pursuing management efficiency while effectively
managing business risks is essential to achieving sustainable
improvement in corporate value. Recognizing that stronger cor-
porate governance is vital to realizing this goal, we have been active
in appointing outside directors to help ensure sound and transpar-
ent management. At the same time, by separating management
oversight and operational execution functions, we have promoted
faster decision-making while further clarifying management
responsibilities. The clear separation of these functions is designed
to further improve management transparency and efficiency.
We manage our Group companies based on clear distinction
between 1) companies that perform an assigned function in our
business; and 2) companies that pursue a synergistic relationship
with us based on a shared corporate strategy.
2. Status of Corporate Governance-related Policy
Implementation
(I) Management Control Organization with Respect to Busi-
ness Decisions, Operational Execution and Oversight,
and Other Corporate Governance Structures
(i) Institutional Structure and Internal Control
The Board of Directors is responsible for management oversight,
supervising the operational execution functions of two executive
organs under its authority, the Management Strategy Council
and the Management Council.
The Management Strategy Council discusses and decides
upon fundamental policies and strategy regarding business man-
agement. The Management Council makes decisions on impor-
tant matters regarding operational execution. Issues discussed by
the two councils and a summary of their discussions are reported
to the Board of Directors, which makes decisions on items of
particular importance. The Management Strategy Council gen-
erally meets once a month, while the Management Council gen-
erally meets three times a month, but meetings for either body
can be convened whenever necessary.
The auditing function is carried out by statutory auditors
(Board of Statutory Auditors), who review the Board of Directors
as well as operational execution functions, and attend important
meetings, including meetings of the Board of Directors as well as
the Management Strategy Council and Management Council.
In addition, the 10-member Board of Directors consists of
eight internal directors and two outside directors, while the five-
member Board of Statutory Auditors consists of two internal
auditors and three external auditors. To further clarify the man-
agement responsibility of directors, the term of directors was
reduced from two years to one year under a resolution adopted
at the Annual Shareholders’ Meeting convened on June 23, 2006.
(ii) Basic Stance on Internal Control Framework and Status
of Implementation
At a meeting of the Board of Directors on May 25, 2006, the fol-
lowing basic stance was adopted with respect to enhancement of
the Company’s internal control system based on Article 362,
Paragraph 5 and Paragraph 4, Section 6 of the Company Law, as
well as Article 100, Paragraphs 1 and 3 of the Company Law
Enforcement Regulations.
1. Objective
The FUJITSU Way, the core set of principles guiding the Fujitsu
Group, sets forth our goal of helping to solve customers’ prob-
lems and contributing to society through the provision of high-
quality products and services based on leading-edge technology,
as well as our determination to fulfill our corporate responsibili-
ties to stakeholders, including: customers, employees*, sharehold-
ers and investors, suppliers, business partners, local communities
and broader global society.
We believe that the concurrent pursuit of efficient manage-
ment and the proper control of business risks are essential to
achieving sustainable improvement in the corporate value of the
Fujitsu Group. Recognizing that stronger corporate governance
is vital to realizing this goal, we are constantly working to imple-
ment and advance the policies outlined below.
2. Framework to Ensure the Propriety of Fujitsu Limited
and Fujitsu Group Business Activities
(1) System to Ensure Efficient Execution of Duties by the
Board of Directors
qManagement oversight functions and operational execution
functions are separated at Fujitsu. The Board of Directors
supervises the Management Strategy Council, Management
Council and other executive organs charged with opera-
tional execution functions. Among these executive organs,
the Management Strategy Council discusses and makes
decisions on fundamental matters of business direction and
strategy. The Management Council makes decisions about
important matters relating to operational execution. Issues
discussed by the two councils and a summary of their dis-
cussions are reported to the Board of Directors, which
makes decisions on matters of particular importance.
wIn order to strengthen management oversight functions, we
actively appoint outside directors and auditors.
eThe Board of Directors clarifies matters relating to the
duties of directors with assigned business responsibilities,
corporate executive officers, and other executive-level man-
agers (all referred to hereafter as “senior managers”), as well
as the authority of other executive bodies, and sees to it that
duties are executed in accordance with the responsibilities
of each position.
rSenior managers shall make decisions regarding execution of
their duties based on appropriate decision-making procedures
in accordance with “Board of Directors Regulations,”