Outline of the Corporate Governance System
The Kurita Group has adopted a system of directors and corporate auditors. The Board of Directors and the Board of Corporate Auditors hold meetings on a regular basis. We have also appointed an external auditing firm as our accounting auditor.
Organizations Established and Measures Implemented for Corporate Governance (2017.6.29)
Corporate Governance System Chart
Directors and the Board of Directors
The number of directors specified under the Articles of Incorporation are three or more members, of which two or more are external directors, ensuring the independence and objectivity of the Board.
Maximum number of members is not specified.
The number of directors currently are 10 members, including two external directors. Both of the external directors are specified as an independent officers.
Directors hold office for one year. This is intended to make the Company more responsive to changes in the market environment, foster a greater sense of managerial urgency among directors, and facilitate flexible and timely changes to the management structure as needed.
Also, full-time directors are not permitted to serve as directors or members of the Audit & Supervisory Board of other listed companies.
Part-time external directors are not permitted to serve as directors or members of the Audit & Supervisory Board of more than three listed companies including Kurita.
To carry out highly effective oversight functions regarding the execution of business, the Board has members from each business segment as well as specialized personnel from corporate planning, finance and accounting, legal affairs, technology, and other fields, creating a structure that augments the knowledge and experience needed by the Board as a whole to make decisions.
Working in accordance with the Corporate Philosophy, the Board of Directors determines the orientation of corporate strategies that will enable the Group to achieve continued growth, and makes decisions on important operations in line with this orientation. It also supervises directors and management as a whole.
It specifies the President as a chair, and in principle, it holds at least one meeting each month.
The number of Board of Directors' meetings held in the fiscal year ended March 31, 2017 was 11 times.
Corporate Auditors and the Board of Audit & Supervisory
The number of Corporate Auditors specified under the Articles of Incorporation are three or more members, of which one or more member shall have sufficient insights and knowledge about finance and accounting.
Maximum number of members is not specified.
The number of Corporate Auditors currently are three members, including two external Corporate Auditors. Both of the external Corporate Auditors are specified as an independent officers.
Members of the Audit & Supervisory Board hold office for four years, and the restrictions on concurrent service as the same as those for directors.
Members of the Audit & Supervisory Board monitor the status of execution of duties by directors and the status of performance of oversight duties by the Board of Directors. They also conduct asset status surveys of the entire Kurita Group including subsidiaries and audit the development and operation of internal control systems implemented by the directors.
Also, the members attend important meetings including Board of Directors' and Executive Committee meetings and express opinions from independent perspectives.
The Board of Corporate Auditors consists of three corporate auditors.In addition to conducting audits based on the policies and plans determined by the Board of Corporate Auditors, the corporate auditors monitor and audit the operational execution of the Group's representative directors and the management performance of its directors.
The number of Audit & Supervisory Board meetings held in the fiscal year ended March 31, 2017 was 11 times.
Based on the Companies Act and the Financial Instruments and Exchange Act, we have chosen Grant Thornton Taiyo ASG to conduct our accounting audits.
Appropriate Cooperation among the Internal Auditing Department, Audit & Supervisory Board, and Accounting Auditor
Kurita Water Industries Ltd. has an Internal Auditing Department that is independent from operational execution functions and reports directly to the president. The Internal Auditing Department conducts internal audits of Group companies, identifies issues and problems in operational execution, and provides recommendations to the president on improvement measures.
The Company has appointed Grant Thornton Taiyo LLC as its accounting auditor. The Audit & Supervisory Board nominates candidate accounting auditors, makes decisions on proposed resolutions regarding appointment, dismissal, and refusal of reappointment of the accounting auditor, and the Board of Directors submits those proposed resolutions to the General Meeting of Shareholders based on the decisions of the Audit & Supervisory Board.
The Company creates opportunities for discussions by the president, General Managers of Business Divisions, General Manager of the Group Administrative Division, General Manager of the Corporate Planning Division, and external directors with the accounting auditor and facilitates appropriate cooperation. In addition, members of the Audit & Supervisory Board, the Internal Auditing Department, and the accounting auditor share information with one another on audit plans and concerns and work to engage in even closer collaboration.
The Executive Committee is a machine that complements the resolution process followed by the Board of Directors. It carries out the prior examination of items to be discussed for resolution, in addition to making decisions on operations. The Executive Committee consists of the president, the executive senior managing director, managing directors, the general manager of the Corporate Planning Division, and other director(s) and / or executive officers(s) designated by the president. In principle, it holds two meetings per month.
In order to enhance our business execution capabilities, we introduced a system of executive officers in 2005. At present, we have eleven executive officers.
Internal Auditing Department
The Internal Auditing Department is under the direct control of the president. This department conducts internal audits, including within each Group company, pinpoints issues and problems related to the execution of business and submits corrective proposals to the president. Also, it monitors the operation of the risk management system and the internal control system with regard to financial reporting.