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The Nikon Group is working to bolster its corporate governance through efforts including improving its internal control system, consolidating its management system, and establishing various committees.
In October 1999, Nikon introduced an in-house company system featuring decentralized management, with an integrated system and responsibilities established for each product sector, including subsidiaries. A results-based evaluation system was also brought in so as to strengthen the relationship between performance and remuneration. In June 2001, we installed an executive officer system and reduced the number of directors, while shortening the term of directors from two years to one in 2003 in order to consolidate a management system that can respond swiftly to changes in the business environment. In June 2007, the executive officer system was revised in order to clarify the duties and responsibilities of directors and operating officers, and enhance their functions.
Nikon formulated the Rules of Organization and Authority to clearly define the scope of authority and responsibility for each post as well as each organization. Additionally, each group company exhaustively implements control and guidance based on the Authorization Standards for Subsidiaries. This ensures organized and efficient business execution across the board.
Committees are established to cope with important concerns for the entire organization. Regarding matters related to compensation of the board of directors members, the Compensation Committee, including people not employed by Nikon, was set up in July 2003 to raise the objectivity and transparency of matters related to directors' compensation. The obligations of this committee include examining and proposing appropriate compensation systems and other related systems.
Ten members of the Board of Directors, including two from outside the company, make prompt decisions on matters of importance to the group and monitor the exercise of duties by directors.
The Executive Committee deliberates on and resolves major issues regarding internal control and guidelines about the general operation of company business, in accordance with the basic direction of management as determined by the Board of Directors. This body also receives reports from each department regarding critical matters.
Five corporate auditors, including three from outside the company, periodically attend such important meetings as the Board of Directors and Executive Committee in order to supervise the status of the directors' execution of operations, and perform monitoring and auditing of corporate management and directors.
