Nikon 2011 Annual Report Download - page 23

Corporate Governance 21
and directors. Three independent corporate auditors from
outside the Company have been invited to sit on the Board.
Internal Control System
Nikon acknowledges that the consideration for effective
and efficient business processes and the achievement
of the accuracy of financial reports, the compliance with
relevant laws and regulations, and the preservation of
Company assets are the management’s responsibility.
Accordingly, Nikon is continually working to develop the
organizational structures and systems necessary to
achieve these objectives. Steps taken to date to enable us
to maintain and reinforce our sustainable internal control
system include revision of rules for the delegation of
authority, establishment of the Internal Audit Department
to be operated independently from other operational
departments, strengthening the management of
information resources of the entire Nikon Group and
establishment of the Internal Control Section to ensure
compliance with the Financial Instruments and Exchange
Law (J-SOX).
With business expansion in China and other areas of
Asia, an Internal Audit Section was established in August
2010 at the Chinese/Asian regional headquarters in Hong
Kong, to enhance the internal auditing functions at overseas
Group companies. During the fiscal year ending March 2012,
Nikon plans to establish an Internal Audit Section for the
Americas at the holding company in North America in order
to create an internal auditing structure covering four regions
(Japan, Europe, China/Asia and the Americas) in the world.
The Nikon Group, in a global business environment, is strengthening corporate
governance, improving its internal control systems and solidifying its relationship of
trust with stakeholders by enhancing management efficiency and transparency.
Corporate Governance Organization
Management System
Nikon manages its business through an in-house company
system that provides an integrated business structure
incorporating the Group companies. Nikon adopted the
Operating Officer system to allow management to be more
responsive to changes in the business environment. A
performance evaluation system was also brought in to
conduct a results-based evaluation and to strengthen the
relationship between performance and remuneration.
The Board of Directors and Executive Committee
The Board of Directors makes prompt decisions on matters
of importance to the Nikon Group and monitors the exercise
of duties by directors. Two independent outside directors
have been invited to sit on the Board in order to further
strengthen the supervisory function.
The Executive Committee deliberates on and resolves
major issues regarding the general operation of company
business, internal controls, and management, in accordance
with the basic management policies as determined by the
Board of Directors. This body also receives reports from
each department regarding critical matters.
Corporate Auditors and the Board of Corporate Auditors
The members of the Board of Corporate Auditors
periodically attend important meetings such as those of
the Board of Directors and the Executive Committee in order
to supervise the execution of duties by the directors, and to
perform monitoring and auditing of corporate management