Olympus 2008 Annual Report Download - page 26

The Board of Directors
and Corporate Officer Systems
> The Board of Directors consists of 15 members, including
three outside directors. In principle, the Board of Directors
meets once per month to make timely decisions regarding
business strategies and other important management
matters and to conduct appropriate oversight of business
execution. Directors are appointed to one-year terms of
office, and the performance of each director is evaluated
annually in order to clearly identify responsibilities. In
addition, in order to enhance eligibility and expertise as a
director, all except outside directors regularly participate
in seminars outside the Company. Furthermore, Olympus
established an Executive Management Committee, which
in principle convenes three times per month, to act as a
body in support of the President’s decision-making.
To further strengthen corporate governance, Olympus
also adopted an executive officer system that separates
the Board of Directors’ responsibilities for decision-
making and oversight of execution of duties from executive
officers’ responsibilities for business execution. The
number of executive officers stands at 28.
Outside Directors
and Their Principal Activities
> Under Japan’s Corporation Law companies with an auditor
system are not required to have outside directors on their
boards of directors. Olympus, however, appointed Messrs.
Rikiya Fujita, Masanobu Chiba and Junichi Hayashi to
serve as its independent outside directors for the purpose
of introducing objective points of view in its management
and further reinforcing the auditing function in its busi-
ness operations. As a doctor of medicine Rikiya Fujita
brings a wealth of knowledge and expertise mainly to the
Medical and Life Science Businesses; Masanobu Chiba
has extensive knowledge and expertise from his career
as a director at Nikkei, Inc. and its group companies; and
Junichi Hayashi offers vast experience from his career in
the securities industry and broad knowledge and expertise
as a director of an investment consulting company.
Outside directors participate in Olympus’ Board of
Directors’ meetings and will act as members of the Special
Committee, which gives advice to the Company from
a position independent of Olympus’ top management
should a large-scale acquisition (over 20%) of shares be
proposed.
Auditors, Board of Auditors
> Olympus adopted an auditor system, which requires the
appointment of three or more auditors, at least half of
whom are to be from outside the Company, and the estab-
lishment of a Board of Auditors. At the present time, there
are four auditors, including two outside auditors. Auditors
are appointed for four-year terms.
The major functions of the Board of Auditors include
auditing management’s daily activities, such as director
performance. In order to fulfill this duty, the Board of
Auditors meets in principle once per month. At Board of
Auditors’ meetings, auditors make reports and exchange
opinions regarding the accomplishments of the Board
of Directors. Together with this, the Board of Auditors
exchanges views with the President four times per year
and with all other directors excluding outside directors
and executive officers once a year. Auditors participate in
important meetings, including Board of Directors’ meet-
ings, and periodically exchange opinions with executive
officers, major subsidiaries’ auditors, accounting auditors
and the Internal Audit Department to ensure auditing
efficiency.
Outside auditors participate in the Board of Directors’
meetings and will act as members of the Special
Committee, which gives advice to the Company from
a position independent of Olympus’ top management
should a large-scale acquisition (over 20%) of shares
be proposed. In addition, outside auditors deepen their
awareness of Olympus’ source of value creation through
visits to plants and research centers.
Accounting Auditors
> Olympus entered into a contract with KPMG AZSA &
Co. concerning audits based on the Company Law and
accounting audits based on the Financial Instruments and
Exchange Law. The independent auditor is approved by the
General Meeting of Shareholders. CPAs of the Company’s
independent auditors are periodically replaced. Overseas,
Olympus mainly requests that KPMG carry out accounting
audits in accordance with generally accepted accounting
principles in each country.
24 OLYMPUS 2008