Yamaha seeks not only to pursue efficient management and to ensure global competitiveness and a high level of profitability, but also to fulfill its social responsibility through fair and sustainable management. In keeping with its corporate philosophy, Yamaha is working to develop an organizational structure and mechanisms for management that will form the basis for transparent and high quality corporate governance.
Creating a Management System based on Directors and Executive Officers
As of June 28, 2012, Yamaha has six directors, including three outside directors. In order to accelerate decision-making by the Board of Directors and enhance supervisory functions. Outside directors also act as members of the Corporate Governance Committees and serve to ensure transparency of management decision-making. In principle, the Board convenes once monthly, and is responsible for the Group's management functions. This includes proposing Group strategy while monitoring and directing the execution of business carried out by each division. In order to clarify responsibilities, directors are appointed for a term of one year.
Yamaha also employs an executive officer system with the aim of strengthening consolidated Group management and the business execution functions of divisions. As of June 28, 2012, the executive officer system comprises 15 executive officers, including two managing executive officers, who are assigned to business or administrative divisions dealing with important management issues. The executive officers support the President, the chief officer in charge of business execution. Managing executive officers, who serve concurrently as Company directors, are assigned to oversee the operation of businesses and administrative divisions, in accordance with the importance of these responsibilities. In addition, five senior executive officers oversee the entire Company organization. As group managers, they are responsible for the performance of key divisions within the Company, and manage and direct in a manner appropriate for bringing the functions of each group to the fore.
Audit System that Ensures Fairness and Transparency
Yamaha is a company with a Board of Auditors as defined under Japanese law, and has worked to enhance governance functions by introducing an executive officer system, as well as by setting up Corporate Governance Committees and an internal control system. These actions in conjunction with consistent audits of the Company's daily operations conducted by Yamaha's system of full-time auditors raise the effective of governance.
As of June 28, 2012, Yamaha has four auditors, including two outside auditors. In principle, the Board of Auditors convenes once monthly. Based on audit plans, auditors periodically perform comprehensive audits of all divisions and Group companies, and participate in Board of Directors' meetings and other important meetings such as management councils. Yamaha has also established a Corporate Auditors' Office (with one staff member as of June 24, 2011) dedicated to supporting auditors. This system helps ensure an environment conducive for performing effective audits.
With respect to accounting audits, the suitability of such audits is determined based on periodic progress reports from the accounting auditors of their audits of the Company's financial statements. The Internal Auditing Division (10 staff members as of June 28, 2012) is under the direct control of the President and Representative Director. Its role is to closely examine and evaluate systems pertaining to management and operations, as well as operational execution, for all management activities undertaken by the Company and Group companies from the perspective of legal compliance and rationality. Evaluation results are then used to provide information for the formulation of suggestions and proposals for rationalization and improvement. In parallel, Yamaha strives to boost audit efficiency by encouraging close contact and coordination among corporate auditors and accounting auditors.
Corporate Governance Structure (As of June 28, 2012)
Registration of Independent Officers
Yamaha has registered outside director Haruo Kitamura and Yoshikatsu Ota as well as outside auditors Takashi Miyazawa and Hirohiko Ikeda as independent officers in accordance with the stipulations of the Tokyo Stock Exchange.
Activities by Outside Director and Outside Corporate Auditors
Outside director Haruo Kitamura attended all 13 of the meetings of the Board of Directors held during the fiscal year ended March 31, 2012. Utilizing his ample experience and considerable insight as a representative director of a publicly owned company, he made necessary statements as appropriate during the consideration of meeting agenda items.
Outside director Hiroyuki Yanagi attended all 10 of the Board of Directors held after his appointment during the fiscal year ended March 31, 2012. Utilizing his specialist knowledge as a chartered accountant, he made necessary statements as appropriate during the consideration of meeting agenda items.
Outside corporate auditor Takashi Miyazawa attended all 10 of the meetings of the Board of Directors held during the fiscal year ended March 31, 2012. He also attended all 10 of the Board of Auditors' meetings, making statements based primarily on his knowledge and experience in the finance and accounting of publicly listed companies.
Outside corporate auditor Hirohiko Ikeda attended 9 of the 10 meetings of the Board of Directors held after his appointment during the fiscal year ended March 31, 2012. He also attended 9 of the 10 Board of Auditors' meetings, and made statements mainly from his specialist standpoint as an attorney.
Support System for Outside Directors and Outside Corporate Auditors
For agenda items at meetings of the Board of Directors and the Board of Auditors to be attended by outside directors and corporate auditors, full-time staff members send documents and other materials to the outside directors and corporate auditors prior to the meeting and provide explanations as necessary to enable them to perform a complete preliminary study. When necessary, outside directors are also individually provided explanations regarding proposals and reports to be submitted to the Board of Directors. As for outside corporate auditors, with regard to other material matters, the Company strives at all times to maintain an effective auditing environment, through such measures as providing information, supplying materials, 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 Company Law and the Enforcement Regulations of the Company Law. Along with the pursuit of optimal corporate governance for enhancing both corporate value and the Yamaha brand, the Company endeavors to qualitatively enhance the internal control system, in recognition that doing so will improve the efficiency of business activities, increase the trustworthiness of Yamaha's accounting and financial data, and lead to stronger compliance, asset soundness, and risk management capabilities.
The Yamaha Group has defined an internal control policy as a specific measure pertaining to the Group-wide internal control system. In line with this policy, the Company is standardizing the rules in place at its subsidiaries, and implementing Company-wide monitoring liaison committees in connection with the internal control system operated by corporate staff divisions, with the goal of making monitoring activities more comprehensive.
Business Continuity Plan (BCP)
The Risk Management Committee, an advisory body to the Board of Directors, has put the necessary systems and countermeasures in place to respond to the various types of risk.
In fiscal 2008 Yamaha formulated the BCP Guidelines, the basic Group-wide policy for its business continuity plan (BCP), which is designed to enable the immediate resumption of operations in the event of an earthquake in Japan's Tokai region or other major natural disaster that could cause damage to its buildings or facilities. In January 2012, Yamaha made comprehensive amendments to its disaster-related regulations and formulated the BCP and Disaster Countermeasures Basic Regulations, which systemizes and streamlines the regulations.
In light of the impact that the Great East Japan Earthquake and the floods in Thailand had on Yamaha Group business in 2011, Yamaha will further enhance and promote its crisis management system and business continuity plan.