Kenwood 2006 Annual Report Download - page 18

Implementation Status of Corporate Governance
Basic corporate governance philosophies
We consider the enhancement of corporate governance in our corporate
group to be a means to increase transparency and raise efficiency in the
decision-making of the management. Therefore, we consider it one of the
most crucial management issues relating to the improvement of corporate
value. We are striving to substantiate and enhance corporate governance,
while efforts are made to improve the management organization,
operational execution organization, as well as the auditing and supervising
organization for the entire consolidated business entity.
Our corporate group is promoting activities based on our “Kenwood
Compliance Guidelines.” These guidelines are to be shared by all
personnel of the Kenwood Group in order to establish a corporation
trusted by society and which also evolves with it. The purpose of these
guidelines is to serve as a base to reinforce compliance with the law and
internal regulations and so operate honest and precise business; all
executives and employees of the group must mutually observe and
denounce behaviors that might lead to illegal, corrupt and anti-societal
conduct.
Status of implementation for corporate governance
The Board of Directors is a decision-making organization for management,
while it is also positioned as the supervisory organization for the execution
of operations. The Board meets once a month for scheduled meetings,
while extraordinary meetings are held as needed, to deliberate and resolve
basic policies of management and important matters, as well as to monitor
and supervise the status of operational executions. In order to clarify the
responsibilities of directors, and in order to make the management
organization dynamic enough to respond in a speedy manner to the
changing management environment, the term of office for directors was
designated as one year in June 2000. As of the end of June 2006, nine
directors, including three external directors, are fulfilling their roles as
directors of the Board.
A new management organization involving the executive officer system
at the core was implemented in June 2002 as part of the management
structure reform based on the “Revitalization Plan.” Intellectuals with
various values were invited to join the Board as external directors.
Clarifications were made to distinguish between the responsibilities of
management and the responsibilities of operational executions, while
aiming for a high degree of transparency in decision-making and
operational executions that are speedy and accurate.
Auditors participate in the meetings of the Board of Directors, hold
meetings of Board of Corporate Auditors, supervise the execution of duties
by Directors, and execute operations at the company and affiliates both
inside and outside Japan. Five auditors, including three external auditors,
are performing these duties as of the end of June 2006.
In March 2003 we established the Internal Auditing Division that is
responsible for conducting internal audits on the overall execution of
operations in the entire Kenwood Group and reporting to the Board of
Directors.
There are two certified accountants who performed duties regarding the
certification of an audit for the Kenwood Group, Hiroshi Kawamura and
Yasunari Kunii. Mr. Kawamura is a representative partner (continuous
auditing for two years) of Deloitte Touche Tohmatsu and Mr. Kunii is an
employee thereof (continuous auditing for five years). The auxiliary
members for auditing duties include certified accountants, assistant
accountants and other assistants, who number 16 in total.
Further, we will be promoting activities to enhance governance and
compliance, by optimizing the use of resources of our group, mainly with
our core business operations, as well as establishing a consolidated
management organization intended to conduct efficient management of
business operations. We established the “Kenwood Compliance
Guidelines,“ intended to serve as activity guidelines to be shared by all
personnel throughout the Kenwood Group, for the purpose of forming an
enterprise organization that is trusted by and evolves with society. We are
also working to ensure that these guidelines are thoroughly implemented.
Promoting CSR activities
Furthermore, we are aggressively promoting activities that emphasize the
social responsibility of the corporation, or Corporate Social Responsibility
(CSR). To this end, we established the “Kenwood Environmental Council,“
chaired by the CEO, in order to enhance the countermeasures for risks
relating to product sales and environmental measures. The “Environmental
Protection Promotion Council“ and “Green Products Promotion Council“
have both been created, and the “Company-wide PL Counsil“ was
established for the purpose of enhancing our undertakings relating to
product liability.
We submitted an affidavit declaring that we will be performing our
duties in seriously regarding the provision of corporate information in a
timely and appropriate manner at the time the regulations for the listing of
securities were amended in January 2005. We also commenced to submit
the “Confirmation Regarding the Appropriateness of the Financial Report“
to the Tokyo Stock Exchange, to indicate that there is no falsified
information in our financial report or semi-annual report. We formulated
our regulation regarding the timely disclosure of corporate information in
response to these developments and are working to ensure that the entire
Kenwood Group understands these regulations. We established the
“Information Disclosure Council,“ which is chaired by the CFO, while
auditing is conducted by our auditors and the Internal Auditing Division to
improve our organization and ensure that the disclosure of information is
timely and appropriate.
Kenwood's Subsidiaries
Election/Dismissal Election/Dismissal Election/DismissalReport
Report
Report
Report
Task of ensuring duty/Task of care of good management
Attendance/Statement of opinion
Selection/Dismissal
Selection/Dismissal
Monitor/Supervise
Audit
Execution Internal Audit
Audit
Strategic
Technologies
Development
Center
Sound Quality
Research Office
Car Electronics
Consumer Div.
Car Electronics
Multimedia Div.
Corporate
Divisions
Device Business
Div.
Home
Electronics
Div.
Speaker
System Div.
E-Business
Management
Dpt.
Consumer
Business
Management
Operation
Sound Quality
Research Office
Car Electronics
OEM Div.
Communications
Equipment Div.
Consumer Business Sector Car Electronics OEM Sector
Accounting Auditors
Compliance committee
Information Disclosure Council
Kenwood Environment Council
Company-wide PL Council
Board of Directors: 9 people (of which 3 are External Directors)
President (Representative Director of the Board) & CEO
Executive Officers Internal Auditing Division
Board of Statutory Auditors: 5 people (of which 3 are External Auditors)
General Meeting of Shareholders
( Scope of Accounting Auditors)
( Scope of Internal Audit)
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