Fujitsu 2011 Annual Report Download - page 74

ON STRENGTHENING CORPORATE GOVERNANCE
Q: As Chairman of the Board and a member of the Exec-
utive Nomination and Compensation Committee,
what are your thoughts on corporate governance?
A company such as ours with global business operations
requires transparency. In particular, our proportion of foreign
investors, who take governance issues extremely seriously, has
reached 36% as of March 31, 2011. To further expand our
business globally, and to win greater trust from shareholders
and customers, it’s important for us to make further improve-
ments in corporate governance.
Q: What measures are you taking to enhance corporate
governance?
In 2009 we established the Executive Nomination and Com-
pensation Committee to enhance transparency and objectivity
in the director selection process and to determine appropriate
executive compensation systems and levels. This committee
has held discussions on Board of Directors’ structure, and the
executive compensation system, and based on the findings it
has submitted to the Board, we have strengthened our man-
agement oversight function and revised our policy regarding
payment of executive compensation.
Q: What specific measures did you take to strengthen
management oversight?
We are further bolstering management oversight through
outside directors and auditors. In terms of the Board of Direc-
tors’ structure, we added an additional outside director for a
total of four outside directors out of a total of 11 Board mem-
bers. We have also strengthened oversight by increasing the
number of statutory auditors with the selection of one outside
auditor to that position.
Q: In your Management Direction Briefing you indicated
a target of 40% in overseas sales. Isn’t a foreign
director necessary?
The Executive Nomination Committee is constantly discussing
appropriate candidates. Our Corporate Senior Vice President
Rod Vawdrey, while not a director, heads the Global Business
Group. Also, directors Yoko Ishikura and Ryosei Kokubun both
have insight rooted in a global perspective and contact net-
work, and they provide many types of advice in their roles as
outside directors.
Q: What reforms have you made to executive compensa-
tion, and what are the aims of these changes?
We revised our executive compensation policy in order to retain
exceptional personnel to manage a global ICT corporation such
as the Fujitsu Group, to strengthen the connection between
business performance and shareholder value, and to enhance
transparency in the compensation system. From the previous
system of base salary plus bonuses, we adopted a structure
comprising base compensation paid in fixed monthly amounts
in accordance with position and responsibilities, stock-based
compensation as a long-term incentive that also emphasizes a
connection to shareholder value, and bonuses linked to short-
term business performance. Stock-based compensation is paid
for purchases of the company’s own shares, which must be
made through the Director Stock Ownership Plan, and held for
the duration of the director’s term. Bonuses are indexed to
consolidated operating income and consolidated net income.
We believe that these changes will enhance awareness among
directors of our stock price and profits, and help to further
increase shareholder value.
Michiyoshi Mazuka
Chairman
In addition to enhancing management transparency, Fujitsu will seek to raise shareholder
value by spurring even greater awareness of stock price and profits among directors.
FUJITSU LIMITED ANNUAL REPORT 2011072