NEC 2011 Annual Report Download - page 31

NEC appoints as outside directors the personnel who
will have no conflicting interests with NEC’s general
shareholders and who have experience of corporate
management and deep insight for the purpose of
(i) strengthening the supervisory functions over business
execution; (ii) obtaining a broad range of advice on
corporate management; and (iii) enhancing accountability
for management.
Aiming to ensure that these roles and functions
expected of outside directors are properly fulfilled, NEC
has been working to enhance deliberations by the Board
of Directors through such means as briefing outside
directors in advance on particularly important proposals to
be put forward to the meetings of the Board of Directors.
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
management issues such as management policies and
strategies. 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
comprises corporate officers, executive general managers
of business units and other members. This committee
deliberates 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.
NOMINATION AND COMPENSATION COMMITTEE
NEC has established the Nomination and Compensation
Committee to enhance transparency of personnel matters
of directors and corporate auditors and remuneration of
directors and corporate officers. The committee consists
of five members, including three outside directors. This
committee deliberates on (i) personnel matters for
directors, representative directors and corporate auditors,
the chairman of the Board, and the president and (ii) the
remuneration system and level of compensation for
directors, representative directors and corporate officers
from an objective perspective. The 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, three of
whom are 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:
Takao Ono Experience as former General Manager of
the Corporate Controller Division, the
Corporate Finance and IR Division and the
Internal Control Division, and Director in
charge of accounting, corporate finance
and internal control over financial reporting
Satoshi Itoh Extensive auditing experience as a
Certified Public Accountant for many years
Hideo Yamada Experience in teaching and research in
the fields of corporate finance and
accounting at universities and other
institutions as an expert in corporate
management strategy
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
cooperating 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,
compliance and other similar matters. In addition, the
corporate auditors cooperate with the outside directors,
mainly by exchanging opinions on audits. 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 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
sections 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.
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NEC Corporation
Annual Report 2011