Sharp 2006 Annual Report Download - page 21

SHARP ANNUAL REPORT 2006 20
behavior, and the Sharp Code of Conduct, which clarifies the
conduct expected of every employee and director of Sharp.
In order to comprehensively and systematically deal with
diverse business risk, Sharp formulated the Business Risk
Management Guideline to help identify and anticipate poten-
tial risks, minimize possible effects and react appropriately.
Sharp constantly works to strengthen its business risk man-
agement at the initiative of the CSR Promotion Department.
Introduction of plan regarding large-scale purchases of
Sharp Corporation shares (Anti-Takeover Plan)
For the purpose of protecting and increasing corporate
value and benefits for all shareholders, Sharp Corporation
introduced a plan regarding large-scale purchases of Sharp
Corporation’s share certificates or other securities (Anti-
Takeover Plan) in April 2006. The plan was formulated to pre-
vent inappropriate large-scale purchases that may be harmful
to the corporate value and benefits of all shareholders.
The Board of Directors of Sharp Corporation has estab-
lished rules regarding such purchases whereby a group of
shareholders with an intent to obtain 20% or more of the
voting rights of the company must provide the Board of
Directors with necessary and sufficient information concern-
ing the contents of the purchase in advance, while an
assessment period shall be set to evaluate the proposed
purchase. The Board of Directors shall receive advice and
counsel from the special committee consisting of experi-
enced outsiders and outside corporate auditors before
deciding whether to accept the large-scale purchase or to
take countermeasures. The Board of Directors may take
countermeasures permitted by applicable laws or the articles
of incorporation of the company in effect at the time. Specific
countermeasures and their conditions shall be chosen based
on what is deemed appropriate at the time.
Shareholders and stakeholders
Appropriate disclosure, provision of information
Internal audit function: Internal Audit Division
Internal audit
Board of Directors
Internal Control Committee
*also responsible for directing and administrating the assigned subsidiaries
Formulation of basic policies of internal control,
creation and supervision of internal control system
Deliberation and submitting of basic policies of internal control system,
basic policies of internal audit and internal audit planning, etc.
Board of Corporate Auditors, Corporate auditors
Accounting auditors
Accounting audit
Accounting/business audit
President
Business groups/
Sales and marketing groups*
Self-audit
Self-audit Self-audit
Domestic/overseas subsidiaries
Internal control promotion function: CSR Promotion Department
Formulation/operation of internal control system
Accounting/business audit
Auditors
Support, guidance
Ensure business is carried out
appropriately
Ensure business is carried out
appropriately
Functional groups
Support, guidance
Ensure business is carried out
appropriately
Business execution
Business execution
Business execution
Supervision,
creation of system
of internal control
Directors
Diagram of corporate governance/
internal control system