Omron 2010 Annual Report Download - page 55

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Corporate Governance, Compliance, and Risk Management
governance system requires that the corporate auditors
meet with the president four times a year and with the
other directors once a year.
——— How are the management and supervisory roles
shared between the five internal directors?
From fiscal 1987 through fiscal 2002, Yoshio Tateisi,
Omron’s current Chairman, served as President, as well
as Chairman of the Board of Directors and Chief Executive
Officer (CEO). However, when Hisao Sakuta, who is not a
member of Omron’s founding family, was appointed
President in fiscal 2003, the Chairman took on the role of
chairing the Board of Directors, and the President took on
the role of CEO, thereby separating the two roles.
Internal directors who do not hold the position of
President or Chairman (that is, myself as Vice Chairman
and the two Vice Presidents) are not involved in business
execution. We monitor and supervise the management
of the Company from a stakeholder’s perspective as a
member of the Board. The two Vice Presidents and I
attend the Executive Council as observers in order to mon-
itor the activities of the executive officers. The purpose
of our attendance at these meetings is to avoid a situa-
tion at Board of Directors’ meetings where the President,
through his role as head of business execution, is in pos-
session of all the information while the other directors
have no information at all.
——— What functions do the external directors fulfill?
The external directors attend monthly Board of Directors’
meetings and directors’ liaison meetings. At these meet-
ings, they adopt an outside perspective from which they
monitor whether or not the directors are functioning prop-
erly as representatives of the Company’s shareholders
and all other stakeholders. The external directors also
monitor the entire process related to formulation and
implementation of management strategies, such as the
formulation of the long-term vision and medium-term man-
agement plans.
——— What do you think about the “independent offi-
cers” which must be registered from fiscal 2010?
At Omron, we consider external directors and external cor-
porate auditors to be “external officers.”
The Company’s Personnel Advisory Committee for-
mulated our in-house developed “External Officer Eligibility
Criteria” for the selection of “external officers” while refer-
ring to criteria for independence defined by a range of
institutions. We then adopted such criteria following the
passing of a resolution by the Board of Directors. According
to these criteria, an external officer cannot have been a
representative or employee of the Omron Group’s inde-
pendent auditor for a five-year period prior to nomination;
a director, auditor, executive officer and/or employee of
any principal shareholder of the Omron Group; or a director,
auditor, executive officer and/or employee of any of
Omron’s principal partners or suppliers. The Personnel
Advisory Committee then selects candidates who meet
these criteria as external officers.
In order to register each external officer as an independ-
ent officer with the Tokyo Stock Exchange, the Corporate
Governance Committee, which is composed solely of out-
side directors and corporate auditors, met and deliberated
this issue in January 2010. The Committee determined
that our “External Officer Eligibility Criteria” complied with
the Tokyo Stock Exchange’s definition of an independent
officer, and consulted the Board of Directors on the regis-
tering of all external officers as “independent officers.” At
a Board of Directors’ meeting held in February 2010, the
Board passed a resolution making all external officers inde-
pendent officers, and registered them with the Tokyo Stock
Exchange and the Osaka Securities Exchange. Details were
also disclosed in a Corporate Governance report.
——— What are your thoughts on Omron’s future sys-
tem of corporate governance?
Omron’s founder used to be the heart and unifying force
of the Company, and the role was subsequently taken over
by his family. However, in fiscal 2003 a person not related
to the Tateisi family was appointed president for the first
time. This was followed by the gradual devolution of author-
ity and rapid globalization of the Company. As a result,
overseas employees came to comprise two-thirds of
Omron’s total workforce. These changes have contributed
to a diversification in values within the Omron Group. Amid
such transformation, Yoshio Tateisi, who is Representative
Director and Chairman, declared on May 10, 2006 (on the
occasion of the Company’s anniversary) that in order to
establish steadfast corporate governance, “Omron’s heart
and unifying force should be transferred from its founder
and founding family to the Omron Principles.” Since then,
we have endeavored to enhance corporate governance
with the Omron Principles as the heart and unifying force
of the Omron Group.
Omron’s creation of a hybrid form of corporate gover-
nance is a distinct feature, as is basing our corporate
governance system on the Omron Principles that serve as
the Company’s heart and unifying force as I just mentioned.
In fact, a strong employee awareness of these principles
has become an Omron tradition.
I often use the analogy of a “lighthouse” for the Omron