Fujitsu 2012 Annual Report Download - page 83

management, as well as makes decisions on important matters regarding business execution. Issues discussed by the Management Council and
a summary of its discussions are reported to the Board of Directors, which makes decisions on items of particular importance. In principle, the
Management Council meets three times a month, but meetings may be convened whenever necessary.
The company has a Board of Auditors that performs the auditing function. The auditing function is carried out by auditors, who review the
Board of Directors as well as business execution functions and attend important meetings, including meetings of the Board of Directors as well as
the Management Council. The Auditing Support Division provides support for the audits by the auditors, and in order to promote the indepen-
dence and effectiveness of the auditing, the company holds discussions with auditors prior to selecting candidates for positions in the division.
Personnel with the appropriate qualifications are selected as division staff candidates, and as a general rule, as full-time staff.
The Board of Directors has 12 members, comprising eight internal directors and four outside directors, and the Board of Auditors has five
members, comprising two internal auditors and three outside auditors. In order to better define the management responsibility of the directors,
their terms were reduced from two years to one year in accordance with a resolution at the June 23, 2006 Annual Shareholders’ Meeting.
In addition, the Corporate Internal Audit Unit (with 64 members) serves as an internal audit group. This unit audits the internal affairs of the
entire Fujitsu Group in cooperation with the internal audit groups of each Group company. The Corporate Internal Audit Unit reports once a
month as a rule to the statutory auditors on the audit plans and results of internal audits, including matters relating to group companies, and
makes regular reports (once every quarter as a rule) to the Board of Auditors and the accounting auditors. The Corporate Internal Audit Unit
includes a significant number of employees with specialist internal auditing knowledge, including Certified Internal Auditors (CIA), Certified
Information Systems Auditors (CISA), and Certified Fraud Examiners (CFE).
The accounting auditor, Ernst & Young ShinNihon LLC, reports to the Board of Auditors concerning the audit plan and results. The accounting
auditor also conducts exchange of opinions when needed and carries out coordinated audits of business operations. The four certified public
accountants associated with Ernst & Young ShinNihon LLC who performed the accounting audit were Yasunobu Furukawa, Yuichi Mochinaga,
Takao Kamitani, and Tsuyoshi Saita. In addition, they were assisted by a further 34 certified public accountants, 31 accounting assistants, and
another 33 persons, all associated with Ernst & Young ShinNihon LLC.
The Fujitsu Way Promotion Council promotes internal control relating to the Fujitsu Way and financial reporting in the Fujitsu Group and
forms the core of operations to upgrade and evaluate internal control for the Group. During internal control audits by the accounting auditor and
statutory auditors, the Fujitsu Way Promotion Council holds regular meetings to provide and explain information as required. The council also
provides and explains information to assist the Corporate Internal Audit Unit in performing internal audits.
The company established an Executive Nomination Committee and Compensation Committee in order to ensure the transparency and objec-
tivity of the process for choosing candidates for the Board of Directors, determining their compensation and ensuring that the compensation
system and levels are appropriate. The Executive Nomination Committee takes into consideration the current business climate and anticipated
trends, and makes recommendations on candidates (draft) for the Board of Directors, choosing candidates having objectivity in making manage-
ment decisions, foresight and perceptiveness, and a superior character. The Compensation Committee is tasked with making recommendations
on executive salaries and methods for calculating bonuses linked to financial performance, taking into consideration compensation levels at
other companies with similar business activities, business scale, and other factors. The aim of this activity is to retain superior management
talent, and provide effective incentives for improving the company’s financial performance.
3. Reasons for Selecting the Current Corporate Governance Structure
The current structure clarifies the management responsibility of members of the board, who, after their election at the annual meeting of share-
holders, become involved in making decisions about important matters concerning the management of the company. Furthermore, the current
structure maintains the robustness and efficiency of governance by having the dual features of (1) the mutual monitoring by the members of the
board, and (2) the audits by the auditors. At the time of the introduction in Japan of the corporation-with-committees governance system,
Fujitsu was using the corporation-with-auditors system, and since the auditors were performing the auditing function effectively, we have contin-
ued to use the system.
The company maintains the robustness of its governance system by having an effective auditing function in which auditors who are indepen-
dent of the management perform objective audits, by actively appointing outside directors, and by having established the Executive Nomination
Committee, Compensation Committee and an internal audit organization. Finally, to further improve efficiency, we have established a Man-
agement Council, which has accelerated decision-making and management execution.
III. Implementation of Policies Regarding Shareholders and Other Stakeholders
1. Initiatives to Enliven Annual Shareholders’ Meetings and Facilitate Voting
Supplemental Information
Distribute invitation notices to Annual
Shareholders’ Meeting early
To give shareholders sufficient time to exercise voting rights, we make efforts to send invitation
notices three weeks prior to the Annual Shareholders’ Meeting.
Schedule Annual Shareholders’ Meeting to avoid
busiest days of overlap with other corporations’
annual meetings
To facilitate the attendance of as many shareholders as possible, since the Annual Sharehold-
ers’ Meeting held in June 2001 we have scheduled our Annual Shareholders’ Meeting to avoid
the busiest days of overlap with other corporations’ annual meetings.
081
FUJITSU LIMITED ANNUAL REPORT 2012
Responsibility