Olympus 2005 Annual Report Download - page 25

O LYMPUS 20 05 23
CORPO RATE GO VERN AN CE AN D CO M PLIAN CE
Basic Policy
> Regarding corporate governance as an important management
issue, the O lympus Group is making concerted efforts to build an
optimal, effective, and fair management structure based o n the
“Social IN” management principle from a global perspective.
Management Organizational Structure
Directors, Board of Directors, and Exe cutive O fficer System
> Comprising 14 directors, including two outside directors, the
Board of Directors in principle meets regularly once a month to
formulate business strategies, make critical decisions, and observe
business execution. The term of office for directors is o ne year in
order to allow for annual performance evaluations and better
clarify director responsibilities.
Using an executive officer system, O lympus aims to strengthen
corpo rate governance by separating the decision-making and
business observation responsibilities of the Board of Directors
from the business execution responsibilities of the executive offi-
cers.
Auditors and Board of Auditors
> O lympus has an auditing structure comprising four auditors, of
which two are outside auditors. The Board of Audito rs meets in
principle once a mo nth, the same frequency as the Board of
Directors. O lympus has established the Internal Audit Department,
an independent o rganization under the direct control o f the pres-
ident. The Internal Audit Department regularly exchanges infor-
mation with the independent auditor to which O lympus consigns
external audits, conducts audits on the appropriateness of inter-
nal controls and management, and promptly reports the results of
its audits.
Business Company Structure
> In O ctober 2004, O lympus split off the Imaging Systems Gro up
into O lympus Imaging Corp. and the Medical Systems Group into
O lympus Medical Systems Corp. in order to reinfo rce and
advance their operations. By splitting o ff these operations, we
aim to establish a global business structure with better market
responsiveness based on business characteristics and with faster
business execution.
Performance Evaluation
> O lympus is intro ducing O lympus Value Added (O VA) as a per-
formance benchmark designed to maximize corporate value. In
using this benchmark, we are able to identify the true value of a
business by taking into consideration capital co sts and other fac-
to rs. O VA will also be used as a reference benchmark for the
selection and concentration o f businesses.
In addition, O lympus is introducing a balanced scorecard to
clarify strategic targets and performance evaluation benchmarks
for business companies such as O lympus Imaging Corp. and
O lympus Medical Systems Corp. as well as in-house companies
to use in developing their operations. The balanced scorecard
will include targets for each fiscal year and numerical objectives
related to finance, customers, business processes, and growth
potential.
Compliance Structure
> In September 2004, O lympus formulated the Corporate Conduct
Charter and the O lympus Code of Conduct to ensure that its busi-
ness activities are fair and sincere, follow a strong sense of
ethics, and strictly co mply with relevant laws and regulations.
W ith these in hand, we have created a means fo r sharing our val-
ues and code of conduct around the world. As a cross-sectional
business standard, we created O lympus International Standards
as behavior guidelines for o ur employees. In April 2004,
O lympus established the Pharmaceuticals Affairs Division in an
aim to bolster its structure in the medical field. In this move,
O lympus upgraded its regulations and standards for business
fields related to the Pharmaceuticals Affairs Law to maintain a
consistently high level o f product safety, quality, and service—
uncompromising standards for a company responsible for provid-
ing lifesaving pro ducts.
Risk Management Structure
> O lympus has set up the Risk Management Committee with the
president as its head, creating a structure for responding to risk.
W e have also created the Risk Management Bureau, where spe-
cially trained staff professionals collect information on potential
risks, evaluate them, and propose effective measures to effective-
ly prevent and the manage any such potential risks.
Corporate Governance Structure Chart
General Meeting o f Shareholders
Appointment/
dismissal
Appointment/ dismissal
Audit
Supervision and
appointment/ dismissal
of President
Audit
Audit
Board of Auditors
O perating Divisions, Corporate Center,
R&D Divisio n, and Subsidiaries and Affiliates
Board of Directors
President
DirectorsAuditors
Internal Audit
Department
Executive Management
Committee
Global Strategy
Committee
Risk Management
Committee
Accounting
Auditor Audit