Corporate Governance

Japan
| Corporate Governance and Internal Control Systems | Internal Control Audits of the Kyocera Group |

  Corporate Governance and Internal Control Systems
The purpose of corporate governance and internal control in the Kyocera Group is to maintain management soundness and transparency, and to achieve fair and efficient management, through which we aim to realize the Management Rationale of the Kyocera Group. To establish a sound corporate culture, the Kyocera Group implements the following measures through the practice of the Kyocera Philosophy.
 
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Corporate Governance System
1. Directors shall accommodate requests for reports by corporate auditors.
2. Internal audit departments shall provide regular reports to corporate auditors on the state of internal audits.
3. Establishment of the Kyocera Board of Corporate Auditors Reporting System to enable employees, suppliers, customers and other individuals or organizations associated with the Kyocera Group to report directly to the Board.
4. Corporate auditors have the authority to attend important meetings and to inspect important conference minutes, documents, contracts, etc. Corporate auditors may call for meetings with representative directors to exchange opinions concerning management of the Kyocera Group in general.
 
Internal Control System
1. Establishment of the Kyocera Disclosure Committee as a means for making timely and appropriate disclosure of management information outside the company.
2. Establishment of a Risk Management Division, as part of the Kyocera Group’s risk management system.
3. Establishment of an Employee Consultation Hot-Line Center as part of the Kyocera Group’s internal complaint system, where employees can report violations of laws, company regulations or other matters.
4. Introduction of an Executive Officer System to clearly delegate authority and related responsibilities; and construction of an effective and efficient business execution system.

Corporate Governance Report(pdf/291KB) PDF


  Structure of Business Management
The Board of Directors
The Board of Directors of Kyocera is an organization to decide the important matters and to supervise the execution of businesses of the Kyocera Group as a whole. It consists of Directors including three Outside Directors. The Directors are nominated by the General Shareholders Meeting based on the proposal of candidates who have enough understanding of the Kyocera Group and with outstanding “personality”, “capability” and “insight” to engage in the management of the Company.

Besides, the Company adopts the Executive Officer system to facilitate the efficiency of the management of the Company. The execution of the businesses of the Company is undertaken by the Executive Officers under the instruction of the President and Representative Director of the Company. The President and Representative Director is nominated by the Board of Directors, which undertakes the management decision and supervision of the execution of businesses. The Representative Director directs the Executive Officers report the status of the execution of the businesses to the Board of Directors, and the Board of Directors makes sure that the businesses is efficiently executed. As such, the Company clarifies the responsibility and authority to achieve efficient management of the Company, and to realize the efficient functionality of appropriate corporate governance and internal control of the Company.

Kyocera has two Outside Directors. One of them is an Independent Outside Director. The other one, for who we have not given notice of independent director to the Tokyo Stock Exchange, nonetheless provides us with pertinent advice and supervision over the Board of Directors from an objective standpoint based upon plenty of experiences and appropriate expertise as a corporate manager.

Audit & Supervisory Board
Kyocera has Audit & Supervisory Board Members and Audit & Supervisory Board based on the corporate governance policy and the provision of its Articles of Incorporation which was approved by the General Shareholders Meeting. Audit & Supervisory Board Members include one full-time Audit & Supervisory Board Member originally an employee of the Company, one Audit & Supervisory Board Member who is familiar with the Company and who has plenty of knowledge and experience as an attorney-at-law, as well as two Outside Audit & Supervisory Board Members, who have plenty of knowledge and experience as an attorney-at-law or Certified Public Accountant. The Audit & Supervisory Board Members are conducting audits of the Company as a whole based on accurate information about the Company gathered from inside and utilizing a variety of view-points as an outsider of the Company. Audit & Supervisory Board Members are conducting audits pursuant to the audit policy and audit plan established every fiscal year. Moreover they attend the meetings of the Board of Directors and other important meetings, so that they have access to necessary information to conduct their task and they check the soundness of the management of the Company from various points of view.

The Kyocera Group Management Committee
Kyocera established “the Kyocera Group Management Committee” consisting of the Directors of the Company. The Committee examines not only the agenda of the meetings of the Board of Directors but also other important matters relating to the execution of the businesses of the Kyocera Group as a whole, and holds meetings every month regularly to secure the sound management of the Kyocera Group as a whole.

With respect to the nomination and remuneration of Directors and Audit & Supervisory Board Members, the Kyocera Group Management Committee and the Board of Directors examines them and receive advice thereon from the Outside Directors, so that the decision relating thereto shall be made in a fair and appropriate manner.

The Kyocera Disclosure Committee
Kyocera has established an organ known as the “Kyocera Disclosure Committee” which is primarily entrusted with the role of implementing the abovementioned fundamental policies of the Company for disclosure of corporate information. This Committee investigates all disclosure documents for the purpose of assuring the appropriateness of disclosures of corporate information, reporting the results of its investigations to the President and Representative Director and being the principal independent internal organ of the Company which educates Group companies concerning rules relating to disclosure and promotes appropriate disclosure of information for the entire Group.

Remuneration to the Directors
Remuneration to the Directors of Kyocera consists of two components, namely, “basic remuneration” and “bonus to Directors”. Basic remuneration is remuneration to be paid based on the responsibility of each Director and the amount shall be decided based on the importance of responsibility. Level of the amount to be paid to each Director shall be decided taking into consideration the amount of the remuneration of other companies doing similar businesses with the Company, provided that the total amount of basic remuneration to all Directors shall be 400 million yen or less per year.
The bonus to Directors is remuneration linked with the performance of the Company. The total amount thereof to all Directors shall be 300 million yen or less per year, and besides, shall be 0.2% or less of the amount of net income attributable to shareholders of the Company for the relevant fiscal year. The amount shall be decided based on the contribution of each Director for the performance of the Company. Remuneration to the Audit & Supervisory Board Members of the Company consists of “basic remuneration” only to secure the neutrality of audit. The total amount of basic remuneration to the Audit & Supervisory Board Members shall be 100 million yen or less per year.

System for Internal Complaint Reporting to the Audit & Supervisory Board
In case employees find conduct that violates or is likely to violate the laws on accounting or matters related to auditing, such as illegal sale or transaction, or feel suspicious of any such conduct, they are encouraged to directly notify the Audit & Supervisory Board by e-mail or letter by means of the System for Internal Complaint Reporting to the Audit and Supervisory Board put in place for this purpose.


  Fundamental Attitudes of Timely Disclosure
Kyocera, based on the ethical views appearing in “The Kyocera Philosophy,” believes that it is important to enjoy a high degree of trust from its shareholders, investors and other stakeholders. For this purpose, Kyocera recognizes that sincere efforts to provide timely and appropriate disclosure of corporate information are indispensable and has accordingly established the following basic policies toward the disclosure of information.

1. “With respect to the disclosure of information, it shall be our policy to disclose both favorable information and unfavorable information timely in an equal and accurate manner.”
2. “With respect to the disclosure of information, it shall be our policy to disclose information without delay and in a fair manner, with no bias towards the domestic or foreign, and without preference towards specific persons.”


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Corporate System for the Timely Disclosure


 

  Internal Control Audits of the Kyocera Group
As Kyocera is listed on the New York Stock Exchange, the company is subject to Section 404 of the Sarbanes-Oxley Act. Section 404 requires business operators to construct and maintain internal control systems relating to fiscal reporting. Section 404 assesses the effectiveness of internal control systems through internal audits based on internal control evaluation criteria.
   
 
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