1. Reasons for adopting an Executive Officer System in the form of a company with Board of Company Auditors as a corporate governance system
JVCKENWOOD believes that the most effective way to embody its corporate governance principles of separating management from execution, appointing external directors and auditors, and strengthening checking functions by establishing an internal audit department is to introduce an executive officer system along with an audit and supervisory board. The aim is to establish a mechanism that facilitates collaboration among internal departments. Therefore, we have established the following management structure.
2. Matters concerning the Board of Directors
The Company shall regard the Board of Directors as the fundamental and strategic decision-making body, as well as the supervisory body for business execution. The Board of Directors shall have a regular meeting once a month and an extraordinary meeting as necessary to discuss and resolve basic policies and important matters relating to management, as well as supervise and monitor the status of business execution. The term of office of Directors is one year to ensure the clarification of their responsibilities and swift management decision-making. The Board of Directors shall also actively appoint External Directors to promote highly transparent decision-making and take the initiative in corporate reform and governance. Nine Directors—Mr. TSUJI Takao (Representative Director of the Board and Chairman), Mr. ABE Yasuyuki (Chairman of the Board, External Director), Mr. EGUCHI Shoichiro (Representative Director of the Board), Mr. MIYAMOTO Masatoshi, Mr. NOMURA Masao, Mr. SONODA Yoshio, Mr. SUZUKI Akira, Mr. IWATA Shinjiro (External Director) and Mr. HAMASAKI Yuji (External Director)—were elected at the 12th Ordinary General Meeting of Shareholders held on June 19, 2020. Since June 2016, JVCKENWOOD has appointed an External Director independent from and neutral to the management of the Company as the Chairman of the Board of Directors, and established a place for active exchange of opinions and discussions at meetings of the Board of Directors. As of June 19, 2020, Mr. ABE Yasuyuki, who serves as External Director, chairs the Board of Directors. The Chairman of the Board determines agendas for a meeting of the Board of Directors in consultation with the Chairman and the Chief Executive Officer (CEO) prior to deliberations of the Board of Directors. In addition, the Representative Director of the Board and Chairman is responsible for convening meetings of the Board of Directors and preparing minutes of meetings of the Board of Directors, etc. as head of the Board of Directors.
3. Matters concerning the Audit & Supervisory Board
The Company adopts a company with an Audit & Supervisory Board framework as its organizational structure. Audit & Supervisory Board Members are responsible for the corporate audit function and their duties include attending Board of Directors’ meetings and other important meetings, as well as holding Audit & Supervisory Board meetings, auditing the execution of Directors’ duties, the business execution of the entire Group, and corporate accounting. The Audit & Supervisory Board holds meetings once a month, and extra meetings as needed. For Audit & Supervisory Board Members, Mr. FUJITA Satoshi (Full-time Audit & Supervisory Board Member, Chairman of the Audit & Supervisory Board) was elected at the 9th Ordinary General Meeting of Shareholders held on June 23, 2017, and three members—Mr. IMAI Masaki (Full-time Audit & Supervisory Board Member), Mr. SAITO Katsumi (External Audit & Supervisory Board Member) and Mr. KURIHARA Katsumi (External Audit & Supervisory Board Member)— were elected at the 12th Ordinary General Meeting of Shareholders held on June 19, 2020.
4. Matters concerning the Nomination and Remuneration Advisory Committee
The Company established the Nomination and Remuneration Advisory Committee, for which all of its External Directors serve as committee members, in December 2015, with the aim of strengthening the independence and objectivity of the functions of the Board of Directors. Since its establishment, the Nomination and Remuneration Advisory Committee has made proposals to JVCKENWOOD regarding candidate representatives for the Board of Directors, and reviewed the appropriateness of director candidates and directors’ compensation plans proposed by the representatives and others, and reported its opinions. The Board of Directors has determined director candidates and directors’ compensation, taking into consideration the opinions stated by the Nomination and Remuneration Advisory Committee. In addition, in April 2019, the Company added the Chief Executive Officer (CEO) to committee members of the Nomination and Remuneration Advisory Committee in order for External Directors who serve as committee members to share accurate internal information in a timely manner and to improve the effectiveness of the Nomination and Remuneration Advisory Committee. The procedures for deliberating a proposal and making determination regarding candidate representatives for the Board of Directors by the Nomination and Remuneration Advisory Committee are performed by three committee members who serve as External Directors except for the committee member who is the CEO. As of June 19, 2020, Mr. ABE Yasuyuki, Mr. IWATA Shinjiro and Mr. HAMASAKI Yuji, who serve as External Directors, and Mr. EGUCHI Shoichiro, who serves as CEO, serve as committee members, and Mr. IWATA Shinjiro chairs the Nomination and Remuneration Advisory Committee by resolution of the Nomination and Remuneration Advisory Committee as of the same date.
5. Matters concerning Executive Officer System
The Company has introduced an Executive Officer System under which the management supervisory function is separated from the business execution function to clarify management responsibility and business execution responsibility since its establishment in October 2008.
The Board of Directors, in order to lead the Company’s initiatives in corporate reform and governance, is chaired by an External Director, holds discussions between External Directors as independent directors and Directors concurrently serving as Executive Officers to make highly transparent decisions, and entrusts the business execution to Executive Officers. In accordance with decisions made at meetings of the Board of Directors, the Chief Executive Officer (CEO), serving as the Chairman, takes the lead in the Executive Officers Committee’s meetings. Each of the Executive Officers assumes responsibility for the overall operations of all businesses in the Americas, EMEA (Europe, Middle East, and Africa), APAC (Asia Pacific), and China, and is in charge of the Automotive Sector (AM Sector), Public Service Sector (PS Sector), or Media Service Sector (MS Sector) while being in charge of the DX (Digital Transformation) Business Division, which continues growing in the other sector, and thus their responsibilities are clarified in both businesses and regions. Furthermore, we introduced an execution system under which each Executive Officer is appointed to the positions of CFO (Chief Financial Officer) or CTO (Chief Technology Officer) or is in charge of each corporate division to support the CEO, and performs their duties.
* The above 1. to 5. are excerpted from Securities Report for the 12th Fiscal Year Ended March 2020 (April 1, 2019 - March 31, 2020). (Japanese)