AKEBONO REPORT 2018

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noitaroballoCCorporate Value Improvement through Stronger Governance–1June 2005June 2006June 2007June 2010June 2014December 2015Three-way audit systemAudit &Supervisory BoardIndependent AuditorAudit DepartmentElection & dismissalCollaborationCollaborationInternal auditDivisions/Business Units/Group CompaniesElection & dismissalAuditElection, dismissal &supervisionDirectionGeneral Meeting of ShareholdersBoard of DirectorsPresident & CEOManagement ConferenceBoard of Executive OfficersAdvancedeliberationReporting & replyingReportingDirector Nomination Advisory CommitteeDirector Compensation Advisory CommitteeCompliance CommitteeRisk Management Committee31 AKEBONO REPORT 2018Basic Approach to Corporate GovernanceAkebono has formulated the following corporate mission: “Through ‘Friction and Vibration, their Control and Analysis,’ we are determined to protect, grow and support every individual life.” Under this corporate mission, we are creating new values through Monozukuri (manufacturing excellence) and striving to increase shareholder value and corporate value even further in line with our corporate goals of “Customer needs first”, “Technology realignment”, and “Establishing a global network”. As a maker of essential safety equipment, we believe that it is important to maintain and promote healthy and friendly relationships with all stakeholders including customers, shareholders, suppliers, our associates, and local communities in order to achieve sustainable growth and development. In line with this conviction, we have positioned the strengthening of corporate governance as an important management issue, establishing a solid governance structure consisting of such bodies as the Board of Directors and the Audit & Supervisory Board, with every Board member committed to maintaining the vigilant oversight of management.Initiatives to Strengthen Corporate GovernanceApril 2000Corporate Governance StructureOverview of Corporate Governance SystemAkebono has adopted the “company with an Audit & Supervisory Board” governance model. We have built a corporate governance system centered on the Board of Directors, Audit & Supervisory Board Members, and the Audit & Supervisory Board. We introduced the Executive Officer System in April 2000 to clarify the responsibility and the authority for business execution, and to enhance management efficiency. The Board of Directors meets regularly once a month, and extraordinary meetings are held as needed. In order to make prompt and accurate judgments on important management matters through sufficient discussion and reviews, Akebono established various important bodies, including the Management Council and the Board of Executive Officers. These bodies operate in accordance with prescribed internal rules. Furthermore, to complement the functions of the Board of Directors and strengthen the transparency and soundness of management, the Company has established the Director Nomination Advisory Committee and the Director Compensation Advisory Committee. As regards the selection criteria and candidates for the Board of Directors, the Audit & Supervisory Board, and executive officers, the Board of Directors determines these by resolutions after being discussed and reported on by the Director Nomination Advisory Committee. In addition, basic matters of the director compensation system are determined by resolution of the Board of Directors after being discussed and reported on by the Director Compensation Advisory Committee to ensure that the compensation system is highly objective and transparent. Management information and suchlike is shared through electronic media, thereby ensuring efficient information sharing among management officers. The execution status of business matters that have been decided is reported to the Board of Directors or the Board of Executive Officers, as appropriate, by the member of the Board or the executive officer who is in charge. This status is also periodically audited by the Audit & Introduced an Executive Officer System• Reduced the number of directors from 25 to 12• Introduced an Outside Director System and elected one outside director• Established the Compensation Advisory Committee and introduced a performance-based remuneration system for directorsIncreased the number of outside Audit & Supervisory Board members from 1 to 2Increased the number of outside directors from 1 to 2Increased the number of outside Audit & Supervisory Board members from 2 to 3Increased the number of outside directors from 2 to 3Established the Director Nomination Advisory CommitteeCorporate Governance System