Toshiba 2005 Annual Report Download - page 31

Toshiba’s Targets under the Company with
Committees System*1
In June 2003 Toshiba adopted the Company with
Committees System with the following objectives: 1) to
reinforce the supervisory function of management and
enhance transparency, 2) to improve management
flexibility, and 3) to enhance risk management and
compliance systems.
In December 2004 the Corporate Governance
Committee was established to consider basic principles
related to the governance of Toshiba Group.
*1 Company with Committees System
Companies can choose this structure under the revised Commercial
Code of Japan, which came into effect in April 2003. Within the board of
directors this establishes nominating, audit, and compensation committees,
which must be comprised of a majority of outside directors, and without
the assignment of statutory corporate auditors. Executive officers serve
in an executive body.
Toshiba’s Governance Structure
Of 14 directors, seven directors are non-executive officers
(four outside directors, the chairman of the board of
directors, and two full-time audit committee members).
Majorities of the members of all the three committees are
outside directors. The Nominating Committee and the
Compensation Committee are chaired by outside directors.
According to the Commercial Code of Japan regarding
a company with committees, the nominating committee
prepares proposals concerning the appointment and
dismissal of directors. At Toshiba the Nominating
Committee has additional responsibilities, including the
preparation of proposals concerning appointment and
dismissal of the president and of committee members.
Regarding management supervision and auditing,
Toshiba has put in place a system in which executive
officers report to the board of directors and the Audit
Committee about matters that have significant influence
on management and operating performance. Also, the
Corporate Audit Division responsible for internal auditing,
which directly reports to the president, is working in
cooperation with the Audit Committee.
Compensation for Directors
Directors receive fixed amounts of compensation based
upon their duties and whether they are full- or part-time
directors.
Executive officers receive compensation according to
their titles and duties. 35% of the compensation according
to duties varies from no payment to twice the normal
amount depending on the financial performance of Toshiba
or the business for which the executive officer is responsible.
Total Amount of Compensation Paid to Directors and
Executive Officers (Toshiba Corp.)
Compensation
Number of amount
members (Millions of yen)
Board of Compensation 10 190
directors for directors
Retirement benefits 348
for directors
Executive Compensation 39 942
officers for executive officers
Retirement benefits 591
for executive officers
Note: Compensation for directors who are also executive officers is included
in compensation for executive officers.
130th Anniversary Toshiba Corporation 31
Corporate Governance
CEO
(President)
Executive
Officers
Divisions
Nominating
Committee
(1 internal director,
2 outside directors)
General Meeting of Shareholders
Directors
Appointment/Dismissal
Appointment/Dismissal
Supervision
Audit
Audit
Audit
Cooperation
Board of Directors
Corporate Audit Division
Internal Audit
Audit
Committee
(2 internal directors,
3 outside directors)
Compensation
Committee
(2 internal directors,
3 outside directors)
Toshiba’s Corporate Governance Structure