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CSR Integrated Report

Fujikura Group CSR Integrated Report 2015
[ISO 26000 Core Subject] Organizational Governance

Corporate Governance

New Initiative: Corporate Governance Code

In the Japan Revitalization Strategy (Revised in 2014), the Japanese government clearly states that corporate governance should be enhanced as a means to recover Japan' s "earning power."
In line with this governmental policy, the Tokyo Stock Exchange was tasked with the formulation of Japan’s Corporate Governance Code to encourage companies to enhance their governance autonomously for their sustainable growth. As a specific organization to decide on the basic elements of the Code, the Council of Experts Concerning the Corporate Governance Code was established, and released a draft Code in December 2015. Subsequently, the final version of the Code and the revised listing rules of the Tokyo Stock Exchange were enforced on June 1, 2015, as detailed below.


[Details]

1999 The Organization for Economic Cooperation and Development (OECD) formulated the OECD Principles of Corporate Governance.
2004 The OECD revised the OECD Principles of Corporate Governance.
June 2014 In line with the Japan Revitalization Strategy (Revised in 2014) announced by the Cabinet, it was determined that a council of experts, for which the Tokyo Stock Exchange and the Financial Services Agency would act as secretariat, would be formed to decide on the basic elements of Japan’s Corporate Governance Code by around the fall of 2014, and that the Tokyo Stock Exchange would create a draft Code in time for the general shareholders’ meeting season (next June).
August 2014 The Council of Experts Concerning the Corporate Governance Code was established with the Tokyo Stock Exchange and the Financial Service Agency jointly serving as secretariat.
December 2015 The Council of Experts released a draft Corporate Governance Code.
June 2015 The Corporate Governance Code and the revised listing rules of the Tokyo Stock Exchange were enforced on June 1.

In response to the formulation of the Corporate Governance Code as explained above, the Fujikura Group began implementing new measures in fiscal 2015 to build up a system to comply with the Code.
Presently, we are working hard to disclose the necessary information within the year, with the department in charge taking the initiative to attain this target.

Measure of corporate govermence

Fujikura ensures clarification of operating responsibilities and an efficient top management by adopting the executive officer system. We have also adopted the corporate auditor system as a system that enables monitoring and supervision of management in the managerial decisionmaking process. Through these systems we have divided the execution and supervision of management and clearly defined the monitoring and supervision functions to be fulfilled by directors to ensure that business operations are conducted in compliance with the relevant laws and regulations and the Company's Articles of Incorporation.

The activities of internal control with regard to daily operations are designed to supervise legal compliance in operational processes through the Internal Control System Development Division, the relevant departments at headquarters, and administrative organizations within each business segment.

For internal control, we have established management rules for documents and electronic information and the storage and control of management information. In addition, we review company-wide risks, promote a compliance system, and manage a whistle-blowing system through the Risk Management Committee and the Conduct Code Promotion Committee.
For control of the Group, we established the Group Management Policy to promote its common values and facilitate a shared sense of unity as well as to improve the effectiveness of management supervision, risk management, and compliance systems throughout the Group.

As a mechanism to support Auditors' operational audit and improve audit accuracy, we have formulated Directors' responsibilities concerning the appointment and dismissal of employees supporting auditors, independence from operating departments, and access to information required by Auditors. We also set up regular occasions to exchange views with operating officers and ensure that opportunities are provided for Auditors to express their demands.

Appointment of an outside director

Fujikura selected Mr. Kenichiro Abe to be an outside director of the company following the approval of the establishment of the position at the 166th Annual General Meeting of Shareholders held in June 2013, as detailed in the following IR website of the company: http://www.fujikura.co.jp/ir/index.html (in Japanese).