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Corporate Governance

Basic Stance on Corporate Governance

The Company sees its greatest management priorities as increasing corporate value by having each of the Group companies achieve sustainable and stable growth, in line with the corporate philosophy and management vision shared throughout the Group. Toward that end, it is working
to maintain organic connections among the five manufacturing locations, led by Japan, and sales and service locations throughout the world, and to ensure that properly functioning management, and supporting corporate governance, systems are in place to enable the optimal exercise of each individual location's functions.

Corporate Governance Report[in Japanese only, 15 pages, PDF137KB]

Implementation Status of Corporate Governance Measures

Directors, the Board of Directors, Operating Officers and the Executive Committee

The Company has adopted an operating officer system to separate the functions between management supervision and management implementation since April 2001. Through this, the Company will expedite management decision-making and clarify the lines of management authority and responsibility.
The Company's management structure is comprised of operating officers, 5 of whom concurrently serve as directors, and 3 outside directors, who are Independent Director as defined by the Tokyo Stock Exchange.
The Board of Directors shall make resolutions on the basic policies and other matters relating to the company's operation of business and shall exercise supervision over duties performed by directors pursuant to the provisions of law. The meeting of the Board of Directors shall be convened once every month and temporary basis, as may be necessary.
The Management Council comprised of operating officers are convened twice a month in principal to deliberate and resolve material matters related to execution of operations based on management policies decided within the meeting of the Board of Directors, and strives to achieve unified management purpose and shift execution of business operations. Outside directors will attend meeting of the Board of Directors, Management Council and other important meetings of the Company and its group companies, to understand the execution of operation and to provide valuable business advice and suggestions from an independent perspective.

(*Note)
Independent Director/Auditor means an outside director/auditor who is unlikely to have conflict of interest with general shareholders and notify Tokyo Stock Exchange of their appointment as "Independent Director(s)/ Auditor(s)" (Rules 436-2)

Statutory Auditors and the Board of Auditors

The Company appoints three highly independent statutory auditors (all are independent auditors as defined by the Tokyo Stock Exchange) to enhance their functions and one of the three auditors is a full-time statutory auditor. The statutory auditors attend Board of Directors, Management Council, and other important meetings, in accordance with the audit plan, to oversee the performance of duties by Directors and ask questions and express opinions to help ensure the legality and reasonableness of decision-making by the Board of Directors and other bodies. Statutory auditors also receive reports from the accounting auditor and the Internal Control Audit Office, hear business reports, inspect important documents, and carry out on-site inspections of the operations and assets of each division of the Company in their effort to develop a clear understanding of, and oversee, business operations.

Remuneration for Directors and Statutory Auditors

In 2019/3, remuneration for the Company's directors and statutory auditors was as follows:

(unit: millions of yen)

  Number of
persons
Basic
remuneration
Share-based compensation Bonus Total
amount
Directors (excluding outside directors) 6 130 33 86 249
Outside directors 2 17 - - 17
Statutory auditors
(all outside)
3 27 - - 27

Accounting Audits

AIDA ENGINEERING has contracted with Ernst & Young ShinNihon LLC to conduct accounting audits in accordance with the requirements of the Companies Act and the Financial Instruments and Exchange Act. The audit firm receives compensation in return for conducting such activities. There are no conflicts of interest between the auditing firm and AIDA ENGINEERING or between the certified public accountants of that firm who perform the audits and AIDA ENGINEERING. Furthermore, there are self-imposed safeguards in place to ensure that the auditing firm and the auditing accountants of that firm are only involved in the accounting auditing of AIDA ENGINEERING for set periods of time.

Internal Audits

AIDA ENGINEERING has established an independent Internal Control Auditing Office.
This office verifies the effectiveness of the internal controls related to legal compliance and financial reporting systems. It also confirms the appropriateness and efficiency of operational processes, management and administrative structures at consolidated subsidiaries, as well as conducts on-site internal audits of subsidiaries both in Japan and overseas as necessary.

Risk Management

In our risk management structure, risks related to the execution of management strategies are analyzed and appropriate countermeasures are implemented by the relevant business units with exposure to that risk. These matters are then discussed as needed by the Board of Directors and the Executive Committee. Risks inherent in daily operations are usually handled by the respective business units, but depending on the nature of the risk we have also established a dynamic risk management structure whose response is dependent upon the potential impact on operations. This includes committees for health and safety, product liability, export administration, and other cross-functional committees, as well as project teams assembled to address specific risks.

Compliance Initiatives

In October 2003 the Company formulated the “AIDA Group Action Guidelines” to ensure stringent legal compliance and promote the highest ethical standards in the conduct of its business.
The Company has also established a Compliance Committee to review specific incidents.
Additionally, in April 2008 the Company instituted the ADIA Group Compliance Hotline System* as part of its efforts curb action guideline violations, etc.
And in June 2010 the Compliance Manual was created and distributed to all Group company employees in order to achieve complete compliance.

* A system for reporting compliance violations or possible violations when they are discovered - including legal infringements and improper conduct - to a reporting hotline in order to reinforce the AIDA Group’s compliance management efforts.

AIDA Group Action Guidelines[PDF41KB]

The Status of Streamlining Our Internal Controls System

The Company established "AIDA Group Action Guidelines" in October 2003 for legal compliance and to gain higher sense of morality within business activities. Compliance committee was also created to enrich internal control. Furthermore, Internal Control Audit Office provides training of the above action guidelines and audits implementation status.
The Company has been conducting current situation surveys including to its subsidiaries, on control environment and control actions aiming to acquire "Reliability of Financial Reporting" based on Financial Instruments and Exchange Act.
In accordance with the changes in the Companies Act, basic policies relating to the maintenance of internal controls were revised in April 2015 and the Company's internal control system is being administered in accordance with these policies.

Basic Policy Concerning Improvement of the Internal Control System[PDF71KB]

Policy toward the Large-Scale Share Purchases (Takeover Defense Measures)

In light of its Basic Policy Concerning Company Control, the Company has established rules pertaining to large-scale purchases of the Company's shares along with a clearly defined policy for responding to such purchases, in contingencies where a large-scale purchaser complies or does not comply with these rules. These rules and policies are designed to prevent parties deemed inappropriate from gaining control over the Company's assets or business policy decisions.

Investor Relations