Sharp 2012 Annual Report Download - page 35

Annual Report 2012 33
Corporate Governance
Remuneration to Directors and Corporate Auditors
in Fiscal 2011
Classification Total Amount of
Remuneration
Directors
(excluding outside directors) ¥439 million
Corporate auditors
(excluding outside corporate auditors) ¥28 million
Outside directors/auditors
(2 outside directors and ¥71 million
4 outside corporate auditors)
Notes:
1. The amount above includes remuneration corresponding to fiscal 2011 for one
outside corporate auditor who resigned the position as of the conclusion of
the 117th Ordinary General Meeting of Shareholders held on June 23, 2011.
2. No bonuses to directors/auditors were paid in fiscal 2011.
3. Remuneration does not amount to ¥100 million or more for any party.
Ongoing Development of
the Internal Control System
In May 2006, the Board of Directors passed a resolution
to adopt a basic policy related to the development of sys-
tems necessary to ensure the properness of business
(Basic Policy for Internal Control), which was partially
amended in April 2012. This amended policy forms the
basis for Sharp’s ongoing development and implementa-
tion of its internal control system. The Internal Control
Committee, which is an advisory body to the Board of
Directors, deliberates on basic policies regarding internal
controls and internal audits, and the state of develop-
ment and implementation of initiatives related to the
internal control system, then reports on and discusses
important matters with the Board of Directors. The
department promoting internal controls on a company-
wide basis oversees the internal controls of the business
execution departments. Meanwhile the Internal Audit
Division makes concrete proposals on how to improve
business operations and reinforces internal controls by
checking the validity of business execution as well as the
appropriateness and efficiency of management.
To enhance compliance throughout the group, Sharp
introduced the Sharp Group Charter of Corporate Behav-
ior, a set of principles to guide corporate behavior, and
the Sharp Code of Conduct, which clarifies the conduct
expected of all directors, auditors, executive officers
and employees of Sharp. Sharp ensures that these
guidelines are thoroughly observed by posting them on
the Web and carrying out position-specific training pro-
grams. Based on the basic rules of compliance, Sharp
has also set up a Compliance Committee and is devel-
oping a company-wide compliance promotion system.
Meanwhile, Sharp is implementing thorough measures
to prevent compliance breaches by distributing a Sharp
Group Compliance Guidebook to all employees and
implementing training based on the guidebook.
In order to comprehensively and systematically
deal with diverse business risk, Sharp formulated the
Business Risk Management Guideline to achieve pre-
vention of and swift responses to risk.
Plan Regarding Large-Scale Purchases of Sharp
Corporation Shares (Takeover Defense Plan)
In order to protect and enhance the corporate value
and common interests of shareholders of a manufac-
turing firm such as Sharp, a company must develop in-
house and make good use of advanced technology and
manufacturing technology from a medium- to long-
term perspective. Furthermore, Sharp believes it is
essential to build good cooperative relationships with
stakeholders such as customers, business partners
and employees.
The Board of Directors of Sharp believes that deter-
mining whether to accept large-scale share purchases
aimed at a takeover should be ultimately entrusted to
the shareholders. However, the Board of Directors of
Sharp also believes that it is not appropriate for any par-
ty that conducts an inappropriate purchase, such as one
that clearly harms the corporate value and common in-
terests of shareholders and/or puts undue pressure on
shareholders to sell shares, to take control over Sharp,
and that it is necessary to take reasonable countermea-
sures against such purchases.
In order to prevent such purchasing activity, Sharp
has adopted the prior warning type of defense mea-
sures called the Plan Regarding Large-Scale Purchases
of Sharp Corporation Shares (Takeover Defense Plan)*
(hereinafter referred to as the “Plan”).
The Plan provides rules for enabling shareholders
to reach a proper decision, by requiring large-scale pur-
chasers of the Company’s shares who intend to obtain
20% or more of the voting rights of the Company to
provide sufficient information and give an adequate as-
sessment period. If a large-scale purchaser does not
follow the rules, or although the large-scale purchaser
complies with these rules, the large-scale purchase
is deemed to be harmful to corporate value and com-
mon interests of shareholders, the Board of Directors
of Sharp will make a decision concerning the imple-
mentation of countermeasures after fully taking into
consideration the advice and recommendations of the
Special Committee consisting of three or more persons
who remain independent of Sharp’s management.
At the 117th Ordinary General Meeting of Sharehold-
ers held on June 23, 2011, shareholders approved the
continuation of the Plan. The effective term of the Plan is
until the conclusion of the 120th Ordinary General Meet-
ing of Shareholders, which will be held by June 30, 2014.
* For more details of the Plan, please visit the website below:
http://sharp-world.com/corporate/ir/topics/pdf/110427-1.pdf
For profiles of the Special Committee members, please visit the website
below:
http://sharp-world.com/corporate/ir/topics/pdf/110623-1.pdf