Yamaha positions the enhancement of corporate governance as an important management issue, and is taking proactive steps to strengthen it.
The Company’s corporate objective is “CREATING ‘KANDO’* TOGETHER — continuing to create ‘kando’ and enrich culture with technology and passion born of sound and music, together with people all over the world.” Based on this objective, Yamaha will improve management efficiency and become globally competitive and highly profitable. At the same time, the Company will increase its corporate and brand value by fulfilling its social responsibilities in areas such as compliance, environment, safety and social contributions.
To achieve this goal, Yamaha will take steps to create a transparent and high-quality management that is also efficient by improving its organizational structure and system, implementing all necessary measures, and disclosing information in an appropriate manner.
Basic Corporate Governance System
Yamaha is a company with a board of auditors as defined under Japanese law. With the General Shareholders’ Meeting as its highest decision-making body, Yamaha has built a corporate governance system （outlined in the diagram below） centered on the oversight and supervision of management’s execution of duties by the Board of Directors, and audits by the Board of Auditors. Further, Yamaha has enhanced its governance functions by introducing an executive officer system, setting up a Corporate Officers Personnel Committee, Risk Management Committee, and corporate committees, convening twice a month （in principle） Managing Council meetings, and establishing an internal control system. In conjunction with consistent audits conducted by the Company’s system of full-time auditors, these help raise the effectiveness of governance through fair and equitable audits by highly independent outside corporate auditors.
Corporate Governance Structure (As of June 27, 2013)
Strengthen Governance Function of the Board of Directors by Selecting Highly Independent Outside Directors
As of June 27, 2013, Yamaha had six directors, including three outside directors. In principle, the Board of Directors convenes once monthly, and is responsible for the Group's management functions, such as strategy planning, monitoring the business execution of each division, and providing guidance.
Outside Directors are elected to enhance supervisory function of the Board of Directors from an objective standpoint, for increasing transparency of the management, and gain good advice by utilizing their management experience in different industry and advanced expertise.
In order to clarify directors' management responsibilities, directors are appointed for a term of one year.
Strengthening Management Function and Business Execution Function Through Executive Officer System
Yamaha has adopted an executive officer system, with the purpose of strengthening consolidated Group management and business execution functions. As of June 27, 2013, the executive officer system comprised 14 executive officers, including two managing executive officers and three senior executive officers. The managing executive officers support the president, who is the chief officer in charge of business execution. The managing executive officers or senior executive officers, in principle, preside over the business and administrative divisions as heads of those divisions in accordance with the importance of these responsibilities. These officers are responsible for the business performance of the groups they preside over and manage and direct in such a way that the group functions to its maximum potential. Moreover, executive officers are assigned to divisions that are responsible for key management issues in each group.
Audit System that Ensures Fairness and Transparency
As of June 27, 2013, Yamaha had four auditors, including two outside corporate auditors. In principle, the Board of Auditors convenes once monthly. Based on audit plans, auditors periodically perform comprehensive audits of all business divisions, administrative divisions and Group companies, and participate in Board of Directors’ meetings and other important meetings such as the Managing Council.
The reasonableness of accounting audits is determined based on periodic progress reports from the accounting auditors of their audits of the Company’s financial statements.
In Yamaha, people with knowledge of finance and accounting assume full-time auditor positions. Full-time auditors have many years of experience that enables them to exercise good judgment with respect to the reasonableness of business audits and accounting audits. To ensure objectively fair and equitable audits, outside corporate auditors are appointed and include specialists （CPAs and attorneys） who hold positions independent from that of the Company.
Yamaha has also established a Corporate Auditors’ Office （with one staff member as of June 27, 2013） that is dedicated to supporting auditors so as to ensure an environment conducive to performing effective audits.
Yamaha established the Internal Auditing Division （9 staff members as of June 27, 2013） under the direct control of the President and Representative Director. Its role is to closely examine and evaluate management and operations systems, as well as operational execution, for all management activities undertaken by the Company from the standpoint of legality and reasonableness. The Internal Auditing Division provides the President and Representative Director, divisions subject to audit, and supervisory divisions with information based on the evaluation along with suggestions and proposals for rationalization and improvement. In parallel, Yamaha strives to boost audit efficiency by encouraging close contact and coordination among the corporate auditors and the accounting auditors.
Registration of Independent Officers
Yamaha has registered outside directors Haruo Kitamura and Yoshikatsu Ota, and outside corporate auditors Takashi Miyazawa and Hirohiko Ikeda as independent officers under the provisions of the Tokyo Stock Exchange.
Activities by Outside Director and Outside Auditors in the year Ended March 31, 2013
Outside director Haruo Kitamura attended all 15 of the meetings of the Board of Directors held during the fiscal year ended March 31, 2013. Utilizing his specialized knowledge as a chartered accountant, he made necessary statements as appropriate during the consideration of meeting agenda item.
Outside director Hiroyuki Yanagi attended 13 of the 15 Board of Directors meetings held during the fiscal year ended March 31, 2013. Utilizing his extensive experience and specialist knowledge as manager, he made necessary statements as appropriate during the consideration of meeting agenda items.
Outside director Yoshikatsu Ota attended 10 of the 11 meetings of the Board of Directors held during the fiscal year ended March 31, 2013. Utilizing his extensive experience and specialist knowledge as manager, he made necessary statements as appropriate during the consideration of meeting agenda items.
Outside auditor Takashi Miyazawa attended 14 of the 15 meetings of the Board of Directors during the fiscal year ended March 31, 2013. He also attended all 14 Board of Auditors' meetings, and made statements mainly from his specialist standpoint as a chartered accountant.
Support System for Outside Directors and Outside Corporate Auditors
The meeting to discuss and confirm management issues is held, in principle, monthly for the purpose of sharing important management proposals between all directors and auditors and gaining a better understanding about management's execution of its duties.
A Business Report Meeting has been set up for reporting by the general managers on the progress of division performance and, when necessary, outside directors are individually provided with explanations about proposals and reports to be submitted to the Board of Directors.
With respect to agenda items at meetings of the Board of Directors and the Board of Auditors to be attended by outside corporate auditors, full-time staff members send documents and other materials to them prior to the meeting and provide explanations as necessary to enable them to perform a complete preliminary study of the agenda. With regard to other material matters, the Company strives at all times to maintain an effective auditing environment, including by providing information, supplying documentation, listening to opinions, and supporting research and data collection.
Basic Concept of the Internal Control System
Yamaha has established an internal control system pursuant to Japan’s Companies Act and the Enforcement Regulations of the Companies Act. Yamaha seeks to achieve optimal corporate governance in order to raise corporate value and the Yamaha brand image. At the same time, the Company works to improve the internal control system to raise business efficiency, increase the dependability of Yamaha’s accounting and financial data, and strengthen compliance, asset soundness, and risk management capabilities.
Further, Yamaha established the Group Management Charter to clarify Group management policies. Also, divisions with jurisdiction over subsidiaries are responsible for providing proper guidance and assistance with management in Group companies under their jurisdiction based on Group company management rules and regulations. Subsidiaries shall confer and consult in advance with said divisions, while administrative divisions of Yamaha Corporation shall support this process.
Yamaha has developed and put into operation internal controls for financial reporting based on implementation standards for internal control reporting systems （Financial Instruments and Exchange Law）. We will maintain and more firmly establish this internal control system to ensure the reliability of our financial reporting.