Toshiba 2015 Annual Report Download - page 12

ii. Reinforcement of the audit function of the Audit Committee through establishment of an internal reporting system
In addition to the internal whistleblower system on the business execution side, the Company established an internal reporting
function in the Audit Committee Oce. The Company also claried that all members of the Audit Committee have the right to
access all reports made to the business execution side using the whistleblower system.
iii. Securing the independence of the Audit Committee Oce
The Audit Committee has the right to approve the appointment of, dismiss, and veto the dismissal of, the head and staff
members of the Audit Committee Oce.
iv.
Elimination of the Corporate Audit Division, establishment of the Internal Audit Division, and direct control of the Audit Committee
The Company eliminated the Corporate Audit Division, separated the internal audit function of the Corporate Audit Division
from the business execution side, and reestablished these functions in the Internal Audit Division under the direct control of
the Audit Committee.
v. Reinforcement of the audit function in accounting and compliance inspections by the Internal Audit Division
The Company limits and focuses the work of the Internal Audit Division to audits of accounting, compliance inspections, audits
of appropriateness and audits of internal control. Responsibility for management consultation, formerly carried out by the
Corporate Audit Division, was shifted to the business execution side, and the execution and supervisory functions were clearly
separated. The Company appointed the executive ocer in charge as general manager of the Internal Audit Division.
vi. Reinforcement of accounting audits and compliance inspections in in-house companies
Several members of the Internal Audit Division are resident in each in-house company. The Internal Audit Division cooperates
with in-house companies and accounting auditors and builds a structure for sharing information.
vii. Securing the independence of the Internal Audit Division
The Audit Committee has the right to approve the appointment of, dismiss, and veto the dismissal of, the head of the Internal
Audit Division.
III. Reinforcing the Nomination Committee and Ensuring the Transparency of Nomination Procedures
In order to prevent any recurrence, the Company will clarify the standards of eligibility for appointment to top-management
positions and establish a structure that secures appropriate decisions on the eligibility of potential candidates.
Composition of the Nomination Committee
i. The Nomination Committee composed, in principle, only of independent Outside Director members
In principle, all members of the Nomination Committee, around ve in number, must be independent outside directors.
Ensuring the fairness of nomination procedures
i. Formulation of a Succession Plan
To ensure the objectivity and fairness of the process for nominating the successor of the president and chief executive ocer,
the Nomination Committee will formulate a Succession Plan.
ii. Clarication of the basis for election and appointment of Executive Ocers and Representative Executive Ocers and
election and appointment processes
The Nomination Committee will clearly set out the standards for electing executive ocers and appointing representative
executive ocers. The Nomination Committee will have the authority to conduct periodic interviews with all candidates, and
the Company will introduce a system for evaluation of the president and chief executive ocer by senior management (a vote-
of-condence system).
IV. Consideration of Compensation Planning from a Medium- to Long-Term Perspective
To motivate top management to draw up reasonable and feasible long-term management plans, the Company will consider
compensation planning based on medium- to long-term corporate value, such as increasing the component of compensation
that is linked to medium- to long-term performance.
11 TOSHIBA Annual Report 2015