NEC 2010 Annual Report Download - page 28

NEC also provides support to Outside Directors in order to
facilitate their understanding of the NEC Group, such as
by organizing tours of business sites and exhibitions of
NEC and its subsidiaries.
Furthermore, since June 2004 the term of Directors has
been set at one year in order to clarify their responsibility
for management every fiscal year.
EXECUTIVE COMMITTEE AND BUSINESS
PROGRESS COMMITTEE
The Executive Committee, which comprises around 20
corporate officers, discusses important NEC Group man-
agement issues such as management policies and strate-
gies. This committee extensively discusses matters of
particular importance prior to putting them forward to the
meetings of the Board of Directors for approval. In doing
so, the committee enhances the deliberations and ensures
appropriate decision making.
Meanwhile, the Business Progress Committee com-
prises corporate officers, executive general managers of
business units and other members. This committee delib-
erates and reports on matters related to the status of the
NEC Group’s business execution, such as monitoring
progress with respect to meeting budgets adopted by the
Board of Directors, with the aim of sharing management
information and promoting execution efficiency.
COMPENSATION COMMITTEE
NEC has established the Compensation Committee, which
consists of five members, including three outside members,
one of whom is the chairperson. This committee deliberates
on the remuneration system and level of compensation for
Directors and corporate officers from an objective perspec-
tive. The Compensation Committee reports the results of its
deliberations to the Board of Directors.
BOARD OF CORPORATE AUDITORS
(CORPORATE AUDITORS)
NEC has appointed Corporate Auditors and established
the Board of Corporate Auditors pursuant to the Company
Law of Japan. NEC has five Corporate Auditors, including
three Outside Corporate Auditors. Furthermore, the Board
of Corporate Auditors holds regular meetings once a
month and extraordinary meetings as necessary, decides
on audit policies, standards, and other matters, and
receives status reports on audits and on other matters
from each Corporate Auditor.
Furthermore, NEC appoints as Corporate Auditors the
personnel who have the knowledge and experience
necessary for audits, such as considerable expertise in
finance and accounting or experience as an attorney at
law, and strengthen the auditing functions of the Corporate
Auditors. The Corporate Auditors who have considerable
expertise in finance and accounting are as follows:
Kenji Seo Experience as former General Manager of
the Corporate Finance and IR Division
and the Affiliated Company Division of
NEC Corporation and engagement in
financial affairs for many years
Satoshi Itoh Extensive auditing experience as a Certified
Public Accountant for many years
NEC appoints Outside Corporate Auditors of independence
who will have no conflicting interests with NEC’s general
shareholders, in order to ensure that audits are conducted
from a neutral and objective perspective.
The full-time Corporate Auditors strive to establish a
governance structure for the entire NEC Group by cooper-
ating with full-time Corporate Auditors of subsidiaries.
The Corporate Auditors are taking steps to strengthen
cooperation with the internal auditing division. These steps
include receiving reports and exchanging opinions with the
internal auditing division on audit results regularly or as
necessary, as well as receiving reports from the same
division on the status of the “NEC Helpline,” a compliance
hotline for employees and contractors to report issues
concerning possible breaches of corporate ethics, compli-
ance and other similar matters. The Corporate Auditors
are also stepping up cooperation with the Accounting
Auditors, such as by receiving briefings on financial audits
covering status reports on their audits and audit plans, as
well as on audits of the internal control systems based on
the Financial Instruments and Exchange Law, and
exchanging opinions on their audits.
NEC has established the Corporate Auditors Office with
approximately 5 corporate staff members to assist with
the Corporate Auditors’ audit activities.
CORPORATE AUDITING BUREAU
(INTERNAL AUDITING DIVISION)
NEC has established the Corporate Auditing Bureau as an
internal auditing division reporting directly to the President
of NEC. This bureau mainly consists of approximately 50
corporate staff members with expertise in internal auditing.
The Corporate Auditing Bureau performs audits of the
NEC Group in cooperation with the internal auditing sec-
tions of NEC subsidiaries to ensure legal, appropriate and
efficient execution of business activities, and identifies
issues and proposes improvements.
The Corporate Auditing Bureau is taking steps to
strengthen cooperation with the Accounting Auditors by
reporting on audit results and exchanging opinions with
them regularly.
ACCOUNTING AUDITORS
In fiscal 2010, the independent audit of NEC was per-
formed by three certified public accountants of KPMG
AZSA & Co.: Hideki Amano, Yasushi Hamada and
Masafumi Tanabu. The independent audit was assisted by
29 certified public accountants, 59 assistant accountants
and 20 other individuals.
* Effective from July 1, 2010, KPMG AZSA & Co. became KPMG AZSA LLC,
due to a change in the category of audit corporation.
RELATIONSHIPS WITH OUTSIDE DIRECTORS AND
OUTSIDE CORPORATE AUDITORS
NEC conducts business transactions with Sumitomo Life
Insurance Company, for which the Chairman,
Representative Director is Shinichi Yokoyama, who is an
Outside Corporate Auditor of NEC, such as sales of NEC’s
products and provision of services including, without
limitation, system construction, operation and maintenance.
27 NEC Corporation
Annual Report 2010