Olympus 2014 Annual Report Download - page 25

Audit
Discussions /
Proposals
Corporate Governance
Basic Policy on Corporate Governance
The Olympus Group strives to realize better health and
happiness for people by being an integral member of
society, sharing common values, and proposing new values
through its business activities. We call this aim “Social IN”
and make it the core philosophy that underlies all of our
activities. In accordance with this philosophy, the Board
ofDirectors seeks to develop, operate, and continuously
improve the corporate governance structure to ensure the
appropriateness and reliability of fi nancial reporting and the
effectiveness and effi ciency of business operations.
Corporate Governance Structure
The Board of Directors consists of 13 members, including
a majority of 8 outside directors. In principle, the Board of
Directors meets once per month and strives to make timely
decisions regarding the Company’s business strategies
and other important management matters and to exercise
appropriate oversight of business execution. A corporate
offi cer other than the president (the chairman of the board)
chairs meetings of the Board of Directors. Olympus expects
the 8 outside directors to apply their specialized expertise in
management by engaging in decision making and oversight
over the Board of Directors from an independent perspec-
tive. Furthermore, the Board of Directors requests reports on
matters that are decided by the Executive Management
Committee or by the president. In this manner, the Company
is strengthening governance from the perspectives of
sharing information and monitoring, thereby creating
systems for better ensuring the soundness of management.
Olympus has adopted an executive offi cer system, which
segregates the decision-making function and supervisory
function of the Board of Directors from the business execution
function of the executive offi cers. In addition, the Company
has set a maximum tenure period for the president and a
maximum age for directors and executive offi cers. These
restraints are in place to prevent inappropriate activities from
occurring due to extended tenures of corporate offi cers.
Outside Directors and Audit & Supervisory Board Members
Olympus has strengthened the corporate governance
structure by appointing 8 outside directors, representing
a majority of its 13 directors, and utilizing their objective
standpoint, wealth of experience, and extensive knowledge
of management. Furthermore, Olympus has increased
the objectivity and fairness of management oversight by
appointing 2 outside audit & supervisory board members
out of the 4 audit & supervisory board members.
Olympus has designated 7 outside directors,
representing a majority of the members of the Board
of Directors, and 2 outside audit & supervisory board
members as independent offi cers pursuant to the rules for
listed companies stipulated by the Tokyo Stock Exchange.
Strengthening of Audit and Supervisory Functions
Olympus is a company with the Audit & Supervisory
Board system. Two of the four audit & supervisory board
members are outside audit & supervisory board members.
One of the two standing audit & supervisory board
members was recruited from outside Olympus to guaran-
tee the strength of supervisory functions. Olympus has
established the Corporate Auditors’ Offi ce to support audit
& supervisory board members and assigned full-time
employees to assist with their work. In principle, the Audit
& Supervisory Board, like the Board of Directors, meets
once per month.
In accordance with the Rules of the Audit & Supervisory
Board and the Audit & Supervisory Board Members’ Audit
Standard, the audit & supervisory board members attend
important meetings, including Board of Directors’ meetings,
and periodically exchange opinions with directors and exec-
utive offi cers. In principle, they exchange opinions with the
representative director four times per year.
Composition of Committees and Position of the Chairman
Outside Directors Reason for appointment Attendance at meetings of the Board of
Directors (Met 19 times in  scal 2014)
Takuya Goto(*)Mr. Goto was appointed so that his extensive experience and diverse knowledge as a business
manager at Kao Corporation may be applied to the Company’s management. 19/19
Shiro Hiruta(*)Mr. Hiruta was appointed so that his extensive experience and diverse knowledge as a business
manager at Asahi Kasei Corporation may be applied to the Company’s management. 19/19
Sumitaka Fujita(*)Mr. Fujita was appointed so that his extensive experience and diverse knowledge as a business
manager at ITOCHU Corporation may be applied to the Company’s management. 19/19
Motoyoshi Nishikawa(*)
Mr. Nishikawa was appointed so that his extensive experience and diverse knowledge as a business
manager at Nippon Steel Corporation (current Nippon Steel & Sumitomo Metal Corporation) as well
as his diverse knowledge as an attorney may be applied to the Company’s management.
19/19
Hikari Imai(*)
Mr. Imai was appointed so that his extensive experience and diverse knowledge as a business
manager at Merrill Lynch Japan Securities Co., Ltd., and RECOF Corporation may be applied to
the Company’s management.
19/19
Kiyotaka Fujii(*)
Mr. Fujii was appointed so that his extensive experience and diverse knowledge as a business
manager at Cadence Design Systems, Japan, SAP Japan Co., Ltd., LVJ Group K.K., Eastgate
Group,Inc., Better Place Japan Co., Ltd., and Hailo Network Japan Co., Ltd., may be applied to
theCompany’s management.
19/19
Keiko Unotoro(*)Ms. Unotoro was appointed so that her extensive experience and diverse knowledge acquired from
working at the Japan Fair Trade Commission may be applied to the Company’s management. 15/15
Masaru Kato Mr. Kato was appointed so that his extensive experience and diverse knowledge as a business
manager at Sony Corporation may be applied to the Company’s management. Appointed from fi scal 2015 (June, 2014)
Outside Audit &
Supervisory
Board members
Reason for appointment
Attendance at meetings of the Board of
Directors and the Audit & Supervisory Board
Board of Directors
(Met 19 times in  scal 2014)
Audit & Supervisory Board
(Met 33 times in  scal 2014)
Nobuo Nagoya(*)Mr. Nagoya was appointed so that his extensive experience and diverse knowledge as a certifi ed
public accountant may be applied to the Company’s management. 19/19 33/33
Katsuya Natori(*)
Mr. Natori was appointed so that his extensive experience and diverse knowledge as a business
manager at Sun Microsystems, Inc., Fast Retailing Co., Ltd., and IBM Japan, Ltd., as well as his
diverse knowledge as an attorney may be applied to the Company’s management.
17/19 28/33
* Independent offi cers
Number of Members Internal Directors Outside Directors Chairman (of the Committee)
Board of Directors 13 5 8 (7 independent directors) Chairman
Nominating Committee 3 1 2 Outside Director
Compensation Committee 3 1 2 Outside Director
Compliance Committee 5 — 3 Outside Director
Overview of the Corporate Governance Structure
(As of June 26, 2014)
Major Management Decisions Made in Fiscal 2014
Format Audit & Supervisory Board system
Adoption of executive offi cer system Yes
Directors 13
Of whom outside directors 8
Term of directors 1 year
Audit & supervisory board members 4
Of whom outside audit & supervisory
board members 2
Independent offi cers 9
Participation of outside directors in determination
of remuneration Yes
Board of Directors convened 19 times
Results-linked remuneration Yes
Decisions Details
Establishment of Sony Olympus Medical Solutions Inc. Establishment of Medical Business joint venture company as part of business and
capital alliance with Sony Corporation
Introduction of stock option system for corporate offi cer compensation Provision of stock options to directors, excluding outside directors, and executive offi cers
Issuance of new shares through public offering and disposal of treasury stock Procurement of capital to extent of ¥112.6 billion from overseas markets
Dissolution of Olympus Biotech Corporation Withdrawal from biologics business
Corporate Governance Structure
General Meeting of Shareholders
Audit & Supervisory Board
2 standing and
2 outside audit & supervisory
board members
Board of Directors
• Decisions on important matters
• Supervision of execution of duties
5 directors
8 outside directors
Chairperson: Chairman of the board
Executive Management Committee
• Assisting the president with decision
making through discussions
on important matters
Chairperson: President
Observers: Chairman, Auditors
Group Internal Audit Of ce President and Representative
Director
Business divisions, corporate divisions, and Group companies
Accounting Auditor
Assistance
with
decision
making
Cooperation Audit
Audit
Report
Cooperation
Appointment / Dismissal
Audit
Audit
Appointment / Dismissal
Election / Supervision
Cooperation Reports /
Suggestions
Appointment / Dismissal Nominating Committee
Nomination of candidates for chairman,
president, directors, and audit &
supervisory board members
Compensation Committee
Compliance Committee
Discussions /
Proposals
Report
CSR Committee
47
OLYMPUS Annual Report 2014
46 OLYMPUS Annual Report 2014