Top of this page




Contents start

Corporate Governance

Basic Policy on Corporate Governance

The Olympus Group strives to realize better health and happiness for people by being an integral member of society, sharing common values, and proposing new values through its business activities. We call this aim "Social IN" and make it the core philosophy that underlies all of our activities. In accordance with this philosophy, the Board of Directors seeks to develop, operate, and continuously improve the corporate governance structure to ensure the appropriateness and reliability of financial reporting and the effectiveness and efficiency of business operations.

Corporate Governance Structure (Summary)
Corporate Governance Structure (Summary)
Corporate Governance Structure (Summary)
1. Overconcentration of Authority in Senior Management > Establishment of Independent Committees See above chart (1), (2)

We have established the Nominating Committee and the Compensation Committee, which are comprised primarily of highly independent outside officers, effectively separating authority related to corporate officer nomination and compensation from management.

Under the guidance of these committees, the Company has transformed significantly. At the suggestion of the Compensation Committee, we introduced a stock option system to reflect our shareholders' perspective into compensation. Also, based on the nomination of the Nominating Committee, we appointed a female outside director.

2. Lack of Supervisory Function of the Board of Directors > Clear Segregation of Business Execution and Supervisory Functions See above chart (3)

The Board of Directors now consists of a majority of outside directors, and these and other corporate officers are appointed based on the nominations of the Nominating Committee, ensuring complete independence from management. This system also allows for clear segregation of the business execution function, handled by inside directors and executive officers, and the decision-making function and supervisory function of the Board of Directors. Further, the outside directors offer advice backed by their specialized knowledge, which serves to improve the quality of management.

3. Corporate Culture with Low Compliance Awareness > Appointment of a CCO and Establishment of the Compliance Committee See above chart (4)

We have appointed a chief compliance officer (CCO) to promote compliance in a managerial capacity and established the Compliance Committee, which is chaired by an outside director. This new system has been used to foster compliance awareness and advance Groupwide governance reforms. In addition, an internal compliance-related reporting system has been established to cultivate a more open corporate culture.

4. Insufficient Information Disclosure Systems > Development of More Stringent Internal Information Disclosure Rules

The Company's internal information disclosure rules have been made more stringent, and we have developed unique disclosure standards that are even stricter than those of the TSE. Also, we actively disclose information that is deemed of importance to investors, regardless of whether or not this is called for under disclosure standards.

Corporate Governance Structure

The Board of Directors consists of 13 members, including a majority of 8 outside directors. In principle, the Board of Directors meets once per month and strives to make timely decisions regarding the Company's business strategies and other important management matters and to exercise appropriate oversight of business execution. A corporate officer other than the president (the chairman of the board) chairs meetings of the Board of Directors. Olympus expects the 8 outside directors to apply their specialized expertise in management by engaging in decision making and oversight over the Board of Directors from an independent perspective. Furthermore, the Board of Directors requests reports on matters that are decided by the Executive Management Committee or by the president. In this manner, the Company is strengthening governance from the perspectives of sharing information and monitoring, thereby creating systems for better ensuring the soundness of management.

Olympus has adopted an executive officer system, which segregates the decision-making function and supervisory function of the Board of Directors from the business execution function of the executive officers. In addition, the Company has set a maximum tenure period for the president and a maximum age for directors and executive officers. These restraints are in place to prevent inappropriate activities from occurring due to extended tenures of corporate officers.

Overview of Corporate Governance Structure

Format

Audit & Supervisory Board system

Adoption of executive officer system

Yes

Directors

13

 Of whom outside directors

8

Term of directors

1 Year

Audit & supervisory board members

4

 Of whom outside audit & supervisory board members

2

Independent officers

9

Participation of outside directors in determination of remuneration

Yes

Board of Directors convened

21 times

Results-linked remuneration

Yes

Corporate Governance Structure
Corporate Governance Structure

Outside Directors and Audit & Supervisory Board Members

Olympus has strengthened the corporate governance structure by appointing 8 outside directors, representing a majority of its 13 directors, and utilizing their objective standpoint, wealth of experience, and extensive knowledge of management. Furthermore, Olympus has increased the objectivity and fairness of management oversight by appointing 2 outside audit & supervisory board members out of the 4 audit & supervisory board members.

Olympus has designated 7 outside directors, representing a majority of the members of the Board of Directors, and 2 outside audit & supervisory board members as independent officers pursuant to the rules for listed companies stipulated by the Tokyo Stock Exchange.

Outside directors

Reason for appointment

Attendance at meetings
of the Board of Directors
(Met 21 times in fi scal 2013)

Takuya Goto*

Mr. Goto was appointed so that his extensive experience and diverse knowledge as a business manager at Kao Corporation may be applied to the Company's management.

21/21

Shiro Hiruta*

Mr. Hiruta was appointed so that his extensive experience and diverse knowledge as a business manager at Asahi Kasei Corporation may be applied to the Company's management.

20/21

Sumitaka Fujita*

Mr. Fujita was appointed so that his extensive experience and diverse knowledge as a business manager at ITOCHU Corporation may be applied to the Company's management.

20/21

Motoyoshi Nishikawa*

Mr. Nishikawa was appointed so that his extensive experience and diverse knowledge as a business manager at Nippon Steel Corporation (current Nippon Steel & Sumitomo Metal Corporation) as well as his diverse knowledge as an attorney may be applied to the Company's management.

21/21

Hikari Imai*

Mr. Imai was appointed so that his extensive experience and diverse knowledge as a business manager at Merrill Lynch Japan Securities Co., Ltd., and RECOF Corporation may be applied to the Company's management.

21/21

Kiyotaka Fujii*

Mr. Fujii was appointed so that his extensive experience and diverse knowledge as a business manager at Cadence Design Systems, Japan, SAP Japan Co., Ltd., LVJ Group K.K., Better Place Japan Co., Ltd., and Hailo Network Japan Co., Ltd., may be applied to the Company's management.

21/21

Keiko Unotoro*

Ms. Unotoro was appointed so that her extensive experience and diverse knowledge acquired from working at the Japan Fair Trade Commission may be applied to the Company's management. Appointed from fiscal 2014

Appointed from fiscal 2014

Kenichiro Yoshida

Mr. Yoshida was appointed so that his extensive experience and diverse knowledge as a business manager at So-net Entertainment Corporation may be applied to the Company's management. Appointed from fiscal 2014

Appointed from fiscal 2014

Outside audit &
supervisory board
members

Reason for appointment

Attendance at meetings
of the Board of Directors
and the Audit & Supervisory Board

Board of Directors
(Met 21 times
in fi scal 2013)

Audit &
Supervisory Board
(Met 37 times
in fi scal 2013)

Nobuo Nagoya*

Mr. Nagoya was appointed so that his extensive experience and diverse knowledge as a certified public accountant may be applied to the Company's management.

21/21

35/37

Katsuya Natori*

Mr. Natori was appointed so that his extensive experience and diverse knowledge as a business manager at Sun Microsystems, Inc., Fast Retailing Co., Ltd., and IBM Japan, Ltd., as well as his diverse knowledge as an attorney may be applied to the Company's management.

21/21

36/37

* Independent officers

Strengthening of Audit and Supervisory Functions

Olympus is a company with the Audit & Supervisory Board system. Two of the four audit & supervisory board members are outside audit & supervisory board members. One of the two standing audit & supervisory board members was recruited from outside Olympus to guarantee the strength of supervisory functions. Olympus has established the Corporate Auditors' Office to support audit & supervisory board members and assigned full-time employees to assist with their work. In principle, the Audit & Supervisory Board, like the Board of Directors, meets once per month.

In accordance with the Rules of the Audit & Supervisory Board and the Audit & Supervisory Board Members' Audit Standard, the audit & supervisory board members attend important meetings, including Board of Directors' meetings, and periodically exchange opinions with directors and executive officers. In principle, they exchange opinions with the representative director four times per year.

Corporate Officer Compensation

The upper limits for the monthly compensation of directors and audit & supervisory board members as well as director bonuses are decided at the general meeting of shareholders.

Director compensation is decided by the Board of Directors in accordance with the Director Compensation Guidelines based on the recommendations of the Compensation Committee, which is comprised of a majority of highly independent outside directors. Audit & supervisory board member compensation is decided by the Audit & Supervisory Board in the same manner. Bonuses are not paid to audit & supervisory board members to maintain their standing as independent from business execution.

Internal Controls

Framework to ensure compliance with applicable laws and regulations as well as the Articles of Incorporation of directors and employees when performing their duties:

Compliance Committee

The Company shall establish the Compliance Committee chaired by an outside director as a body to oversee and improve the compliance system.

CSR Committee

Olympus shall set up the CSR Committee chaired by the president and regularly hold meetings to plan CSR activities for the Olympus Group and set objectives for and evaluate these activities.

Group Internal Audit Office

Olympus shall establish the Group Internal Audit Office to directly report to the president. The Group Internal Audit Office shall, pursuant to the provisions of the Internal Audit Regulations, periodically conduct internal audits of all business operations with respect to compliance with laws and regulations, the Articles of Incorporation, internal rules and regulations, the appropriateness of business execution procedures and details, and other matters.

Systems and measures to manage risks of losses:
  1. The Company shall manage its business risks based on thorough discussions held at meetings of the Board of Directors and the Executive Management Committee, among other meetings, and appropriate internal approval procedures.
  2. The Company shall manage risks, such as those relating to quality, product safety, export control, information security, occupational health and safety, the environment, and disasters, by defining responsible divisions, establishing internal corporate regulations and standards, and implementing related education and training.
  3. The CSR Committee shall report and deliberate on plans and measures in relation to risk management and make efforts to establish and maintain a risk management system. Moreover, pursuant to the internal rules on risk management, each business division shall be aware of risks and take preventative measures, and the Company shall develop a framework that enables prompt actions in the event of an emergency. In the event of an earthquake, fi re, other natural disaster, accident, corporate ethics violation, or occurrence of another high-risk incident, the business divisions shall make immediate reports to the president, members of the CSR Committee, and other relevant individuals through the Risk Management Department. Response measures will then be decided by the president.
Framework to ensure the effective performance of duties by directors:
  1. The Board of Directors shall develop medium- and long-term corporate strategic plans in order to clarify the Company's business objectives and realize efficient resource allocation based on the yearly business plans. In addition, the Board of Directors shall receive a monthly report on business performance in order to evaluate the progress of the Company's yearly business plan.
  2. The Board of Directors shall determine the separation of duties among the representative director, other operating directors in charge of business execution, and executive officers and supervise their execution of their duties.
  3. With the exception of matters deliberated on at meetings of the Board of Directors, the representative director shall only make decisions about significant matters after discussing these matters at meetings of the Executive Management Committee.
  4. Based on internal corporate regulations, including the internal rules on approval procedures and organizational matters, the Board of Directors shall determine the management organization and the separation of duties, as well as the responsibility and authority of each corporate officer, and establish an appropriate and effective system for the performance of duties.

As of December 20, 2013



Contents end





Copyright OLYMPUS CORPORATION All Rights Reserved.