NEC 2015 Annual Report Download - page 37

Continued Strengthening and Improvement of the System
NEC adopts the company with the Audit & Supervisory Board Members
(KANSAYAKU) (“A&SBMs”) to serve a double-check process: Board of
Directors supervises the business execution and the Audit &
Supervisory Board (KANSAYAKU-KAI) (“A&SB”) audits the legitimacy and
appropriateness of Director's decision-making or activities. We have
established a hybrid structure by a combination of a corporate officer
system, multiple Outside Directors, and a Nomination and Compensation
Committee comprised of Outside Directors as majority. In this way, we
separate management supervision from the business execution while
striving to ensure management transparency and soundness.
Independence Criteria for Outside Directors and Audit &
Supervisory Board Members
NEC declares that an Outside Director and an Outside Audit &
Supervisory Board Member (KANSAYAKU) who is not fallen under
any of the following description is independent of NEC.
*1 Major business partner:
1) A business partner with the total amount of transactions with NEC (consideration for
offering products/services and procurements) exceeding 2% of sales of NEC or such
business partner; or, 2) A business partner from which NEC’s annual average outstanding
borrowings exceeding 2% of total assets of NEC in any one of the past three fiscal years
*2 Organization that has received a significant amount of donation from NEC:
An organization that has received from NEC a significant amount of donation exceeding
the greater of ¥10 million, or 2% of the gross income of such organization, in any one of
the past three fiscal years
(1) Presently or at any time within the past three years, any of his or her
relative within the second degree of relationship holds or held a
position equal to or higher than a general manager at NEC or a Group
subsidiary
(2) Presently or at any time within the past three years, the person is or
was a person executing the operations (“executing person”) of a major
business partner*1, or any of his or her relative within the second
degree of relationship is or was an executing person at a major
business partner*1 (if such a person holds or held a position equal to or
higher than a position equivalent of a general manager at NEC)
(3) In any one of the past three fiscal years, the person or any of his or
her relative within the second degree of relationship has received
financial compensation of ¥10 million or more (excluding
remuneration for Directors or A&SBMs ) from NEC
(4) Presently or at any time within the past three years, the person or
any of his or her relative within the second degree of relationship
has belonged to Accounting Auditors of NEC
(5) Presently or at any time within the past three years, the person or
any of his or her relative within the second degree of relationship
has been an executing person of an organization that has received a
significant amount of donation from NEC*2
NEC believes that its corporate governance is functioning adequately
under the current system described above. However, NEC realizes the
importance of further strengthening its corporate governance in order
to focus on the “Solutions for Society” and strive to create social value
and maximize corporate value.
NEC actively incorporated concrete measures to strengthen its
governance ahead of Japan’s “Corporate Governance Code” that entered
into force in June 2015, and NEC is focusing its efforts on
enhancements and improvements of this system in order to realize more
effective corporate governance.
Enhancing the Effectiveness of the Board of Directors
For Directors and A&SBMs to be able to appropriately fill their
expected roles and responsibilities, NEC has stipulated a policy of
implementing periodical training for Directors and A&SBMs so that
they can acquire the necessary expertise and information regarding
the roles and responsibilities of Directors and A&SBMs (including
legal responsibilities), and the necessary expertise and information
regarding the company’s business. NEC takes steps for Outside
Directors and A&SBMs to deepen understanding of the NEC Group,
including tours of NEC and subsidiary business sites and exhibitions.
We will continue to provide various kinds of support.
To enhance deliberations at meetings of the Board of Directors,
Outside Directors and Outside A&SBMs are provided documents in
advance of meetings of the Board of Directors. They are also given
briefings in advance on particularly important items to be included
on the board’s agenda. In addition, the Board of Directors receives
from CFO for shareholders’ opinions obtained through IR activities,
and from CSO for issues or measures related to sustainability, and
it has opportunities to share and discuss such matters. Looking
ahead, we plan to conduct an analysis and assessment of the
effectiveness of the Board of Directors with the objective of
further enhancing their functions.
For further details on the corporate governance of NEC Corporation, please visit the following websites:
http://jpn.nec.com/profile/en/governance.html
Outside Director and A&SBMs on tour
at the OCC Corporation’s Submarine
System Plant in Kitakyushu City,
Fukuoka Prefecture
36
NEC Corporation
Annual Report 2015
Business Foundation to Support Value Creation