Corporate Governance
Basic Views on Corporate Governance
Guided by our Group-wide corporate philosophy and management vision, the Company places top priority on having each Group company achieve sustainable and stable growth and improving corporate value. To this end, the Group has a global business management system led by Japan that organically connects our five global production facilities and our sales and service operations around the world to make maximum use of their respective functions, and we are constantly enhancing our corporate governance framework to support this system.
Corporate Governance Report
[PDF782KB]
Implementation Status of Corporate Governance Measures
Directors, the Board of Directors, Operating Officers and the Management Council
The Company has adopted an operating officer system since April 2001 to separate management supervisory functions and business execution functions, and strives to expedite management decision-making and clarify lines of authority and responsibility. The current management structure consists of operating officers, whom concurrently serve as directors, and four outside directors (all of whom are independent directors). As a general rule, the Board of Directors convenes monthly ordinary board meetings with the Chairman and President serving as the chair, and convenes extraordinary board meetings as needed, thereby performing a decision-making function for important matters mandated by law and a supervisory function for the execution of business operations. In addition, the Management Council, which as a general rule is convened twice a month, is chaired by a person approved by the Board of Directors and is composed of operating officers and others. The Management Council deliberates and resolves important matters related to business execution based on management policies decided by the Board Directors, and strives to achieve a consensus among management and the swift execution of business operations. Outside directors attend important meetings of the Board of Directors, Management Council, and other bodies to develop a clear understanding of the current status of business execution by the Company and Group companies. They also provide valuable advice and suggestions on the Company's management from an objective perspective.
Statutory Auditors and the Board of Auditors
The Company has adopted a statutory auditor system. In order to strengthen the functions of the Board of Auditors, it has appointed three highly independent statutory auditors (all of whom are independent auditors), one of whom also serves as a standing statutory auditor. The activities of the statutory auditors include attending important meetings of the Board of Directors, the Management Council, and other bodies in accordance with the audit plan to oversee the performance of duties by directors, as well as asking questions and expressing opinions to ensure the legality and validity of the decision-making by the Board of Directors and other bodies. In addition, statutory auditors receive reports from the accounting auditor, listen to ask questions about business reports, examine important documents, and conduct on-site inspections of the operations and assets of each division at the Company, main offices, and consolidated subsidiaries in order to monitor and gain a clear understanding of the status of management operations.
The Company has built a structure to support audits performed by the statutory auditors by assigning staff from the Internal Control Audit Office, the Finance & Accounting Department, and other administrative divisions.
Remuneration for Directors and Statutory Auditors
In the fiscal year ended March 31, 2023, remuneration for the Company's directors and statutory auditors was as follows:
| Officer Category | Number of Eligible Officers | Total Remuneration by Type (Millions of yen) | Total (Millions of yen) | |||
|---|---|---|---|---|---|---|
| Monetary Remuneration | Stock Compen-sation | |||||
| Basic Remu-neration | Performance-Based Remuneration | Sub-total | ||||
| Directors (excluding outside directors) | 4 | 132 | 32 | 164 | 23 | 188 |
| Outside directors | 3 | 25 | - | 25 | - | 25 |
| Statutory auditors (all outside) | 4 | 26 | - | 26 | - | 26 |
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 Audit 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
Our 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[PDF102KB]
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 financial or business policy decisions.
