FUJIFILM Holdings is Strengthening and Enhancing Corporate Governance in an Effort to Raise Corporate Value.
We recognize that the main mission of a corporation is to keep improving its corporate value. To promote the accomplishment of this mission, we implement measures to strengthen and expand our corporate governance systems and thereby aim to win the trust of all stakeholders. Such measures are what underpin Groupwide efforts to achieve corporate governance consistent with a holding company and to maximize corporate value.
The Fujifilm Group aims to constantly improve the transparency and soundness of its Group management.
Following the June 2015 implementation of the Corporate Governance Code, we will promote compliance with the code to increase the effectiveness of our governance system to bring about sustainable growth.
Details regarding corporate organization
Directors and Board of Directors
We have positioned the board of directors as the organization for determining basic Group management policies and strategies and other important matters relating to business execution, as well as supervising the implementation of business affairs. Our Articles of Incorporation stipulate that the board can consist of up to 12 directors. Currently, the board has 12 directors, including 2 outside director. The board's regular meetings are held, in principle, once a month, with extraordinary board meetings held on an as-required basis. In addition, certain matters are deliberated and resolved flexibly at the board of directors meetings convened by directors with special authority. To better clarify their missions and responsibilities, our directors have a one-year term of office.
Meanwhile, we have adopted a remuneration system under the stock option plan to make our directors, excluding outside directors, share a mutual interest-the effect of stock price fluctuations-with our shareholders. In this way, the directors are in fact encouraged to have stronger drive and morale toward achieving higher corporate value.
Executive Officer System
We have adopted an executive officer system to facilitate agile business execution. Executive officers carry out business affairs in accordance with the basic policies and strategies formulated by the Board of Directors. We currently have 11 executive officers, including six concurrently serving as Board members. The executive officers have a one-year term of office, the same as the Company's Directors.
The Management Council makes decisions on the submission of matters to be exclusively deliberated by the Board of Directors. At the same time, the Council deliberates on the measures adopted by executive officers to implement particularly important initiatives in accordance with the basic policies, plans, and strategies formulated by the Board of Directors.
Audit & Supervisory Board and Audit & Supervisory Board Members
We have adopted an audit and supervisory board system with an audit and supervisory board, which currently consists of four members, including two outside Audit & Supervisory Board members. As an independent organization with key roles and responsibilities in our corporate governance system, Audit & Supervisory Board members audit the entire scope of Directors' performance of their duties following audit policies and an audit plan in conformity with the Audit & Supervisory Board members' audit standards determined by the Audit & Supervisory Board. At meetings of the Audit & Supervisory Board, which are held in principle once a month, information on audit results is shared among Board members. In addition, all Audit & Supervisory Board members attend meetings of the Board of Directors, while the full-time Audit & Supervisory Board members also attend every Management Council meeting, regularly exchange opinions with the representative Directors, and audit the entire range of business execution. We have currently appointed three personnel to perform internal audits and to support Audit & Supervisory Board members with the aim of strengthening the audit functions of the Audit & Supervisory Board.
We have an Internal Audit Division, which currently comprises eight personnel, as an internal auditing unit that is independent from business operations. From the standpoint of a holding company, this division audits operational processes and other relevant matters at our individual divisions and Group companies in cooperation with the internal auditing units at the operating companies. In this way, the division evaluates and verifies that these processes are appropriate.
In addition, the division is in charge of assessing internal control over financial reporting by FUJIFIM Holdings and its Group companies, in response to the April 2008 application of the internal control reporting system in Japan. We compile the outcome of the assessment in a “Management's Report on Internal Control over Financial Reporting.” Moreover, designated staff are appointed to operating companies and audits are conducted across a wide range of areas, including the environment, quality control, security, labor, export control, and issues relating to the Pharmaceutical Affairs Law of Japan.
We engage Ernst & Young ShinNihon LLC as our independent auditors. Ernst & Young ShinNihon expresses an audit opinion on our financial statements from an independent standpoint. In addition to accounting audits, Ernst & Young ShinNihon commenced auditing internal control of our financial reporting from the fiscal year ended March 31, 2009.
The Corporate Governance Structure of FUJIFILM Holdings Corporation
Outside Directors and Audit & Supervisory Board Members
Two of our 12 Board of Directors are outside Directors. Outside Directors request explanations as necessary to ensure appropriate decision making by the Board of Directors while also providing appropriate advice.
Two of our four Audit & Supervisory Board members are appointed from outside the company. These outside Audit & Supervisory Board members request explanations when necessary and make pertinent comments where appropriate at the Board of Directors' meetings. In addition, proper steps are taken to audit directors in the execution of their duties by asking questions and expressing opinions at the meetings of the Audit & Supervisory Board.
We have notified the Tokyo Stock Exchange of the designation of two outside Directors and two outside Audit & Supervisory Board members as its independent officers.
Support System for Outside Directors and Outside Audit & Supervisory Board Members
The Legal Division, as the office for the Board of Directors, prepares materials and provides outside Directors and outside Audit & Supervisory Board members with information relating to proposals submitted to regular Board of Directors' meetings. The office also provides them with supplementary explanations where requested. The internal auditing unit, as the office for the Audit & Supervisory Board, provides support to outside Audit & Supervisory Board members in such areas as the preparation of materials and the provision of relevant information for regular meetings of Audit & Supervisory Board members. The materials prepared are used to promote information sharing between full-time and outside Audit & Supervisory Board members.
Overview of IR Activities
At Fujifilm, top management is actively involved in IR activities and works to strengthen the relationship of trust with shareholders and enhance IR activities. In addition, we are working to reduce the gap between corporate value and market ratings by continuously expounding our management policy and utilizing management to assist the capital markets in forming their opinions. Specifically, in addition to the results briefings attended by senior management and executive officers that are held on a quarterly basis, we actively provide points of contact, such as holding conferences for the benefit of institutional investors in Japan and overseas as well as individual meetings. We are working to further enhance communications with our shareholders. For our overseas investors, we post English-language information in a timely manner on our website and are enhancing our global IR activities, such as by establishing our IR base in North America in April 2014.
For individual investors, we post content on the website that explains the Group's businesses in an easily understood manner and hold company briefings in major cities in Japan.