CSR / Environment

Corporate Governance

Corporate Governance

Fiscal 2018 Objectives Fiscal 2018 Achievements Self-evaluation
  • Establish a human resource pool (co-CEOs) including external personnel with a view to future CEO appointments, and seek to implement rapid decision-making by allocating project management responsibility to the chair/president or co-CEOs by field of business or region
  • Strengthen audit functions by increasing the full-time members of the Audit and Supervisory Committee from 1 to 2
  • Chair/president and co-CEOs implemented rapid decision-making
  • Strengthened audit functions through in-house audits, mainly conducted by two full-time members of the Audit and Supervisory Committee, who bring unique types of expertise and points of view to Sharp
★★
Priority Objectives for Fiscal 2019
  • Reorganize into three business groups and engage in business reinvention as “One Sharp”
  • Expand the decision-making authority and responsibility of the co-CEOs
  • Contribute to improved appropriateness and efficiency of group-wide business operations through cross-organizational implementation of improvement points based on audit results
  • Self-evaluation: ★★★ Achieved more than targeted / ★★ Achieved as targeted / ★ Achieved to some extent

Basic Policy

Sharp’s basic policy on corporate governance is to maximize corporate value through timely and appropriate management while ensuring transparency, objectivity, and soundness supported by the concept, “Our future prosperity is directly linked to the prosperity of our customers, dealers and shareholders...” as stated in the company’s Business Philosophy.

Based on this policy, Sharp is strengthening the supervisory function over the Board of Directors and enhancing the flexibility of decision-making by appointing outside director and operating an Audit and Supervisory Committee.

Sharp has also introduced an executive officer system that clearly separates supervisory and decision-making functions from business execution functions, thereby creating a structure that steadily facilitates nimble and efficient business execution. Further, Sharp is implementing deep-rooted enhancements to individual fields of business and operations by establishing a divisionalized management system in which each business unit assumes responsibility for their earnings, to be regulated by the President’s Office and the Corporate Strategic Planning and Control Group at the head office.

In addition, Sharp has formulated the Sharp Group Charter of Corporate Behavior as action guidelines for all directors, executives, and employees to raise their awareness of compliance, and it is working for its permeation across the entire Sharp Group.

Corporate Governance System

Supervisory and Decision-Making Functions

Sharp Corporation Board of Directors Meetings are held on a monthly basis in principle to make decisions on matters stipulated by law and on management-related matters of importance, and to supervise the state of business execution. The Board of Directors comprises internal directors who are experts in the fields of business of the Sharp Group and outside directors appointed from talent with high specialism and abundant experience in fields such as social and economic trends and management.

Sharp has established a voluntary Nominating Committee and Compensation Committee as advisory committees to the Board of Directors. The Nominating Committee recommends candidates for directorships to the Board of Directors and the Compensation Committee determines the value of remuneration and bonus packages for directors undertaking a role on the Board of Directors. Further, as a strategy to enhance corporate governance, each committee chairperson is an outside director. Similarly, Sharp has established an Internal Control Committee to serve as an advisory committee to the Board of Directors. The Internal Control Committee discusses basic policy, consolidation and operation of internal control and internal audits, reports to the Board of Directors, and makes decisions on arising matters.

Composition of Supervisory and Decision-Making Organs

  All Members
(Persons)
Internal Directors
(Persons)
Outside Directors
(Persons)
Non-directors
(Persons)
Chairperson /
Committee Chair
Board of Directors 9 6 3 0 Chairperson: Chair/President
Nominating Committee 4 2 2 0 Committee Chair: Outside director
Compensation Committee 4 2 2 0 Committee Chair: Outside director
Internal Control Committee 7 2 3 2 Committee Chair: Outside director

Directors (Except Audit and Supervisory Committee Members) / Directors Who Are Audit and Supervisory Committee Members

  All Members
(Persons)
Internal Directors
(Persons)
Outside Directors
(Persons)
Independent Directors
(Persons)
Term
Directors (except Audit and Supervisory Committee members) 6 6 0 0 1 year
Directors who are Audit and Supervisory Committee members 3 0 3 2 2 years

Business Execution Functions

The Board of Directors’ rules stipulate matters on which the Board must decide upon. These matters include Sharp’s basic management policy, management plans, other important matters of management, and matters prescribed by laws, regulations, and articles of incorporation. As for decisions on other matters of management and business operations, these are stipulated in in-house rules such as authorization regulations, and the most relevant rules are used to make decisions.

For matters that are key to company-wide management and business operations, these are deliberated on at an Executive Management Meeting that comprises Sharp executives. The meeting convenes in a timely manner, which allows rapid management decision-making. Sharp has also established a human resource pool (co-CEOs) including external personnel with a view to future CEO appointments, and allocates project management responsibility to the chair/president and co-CEOs by field of business.

Auditing Functions

The Audit and Supervisory Committee is composed of three directors, all of whom are outside directors with a high level of expertise. Two of them have specialisms to an appropriate extent in finance or accounting. Further, two members are independent directors and one is a full-time member of the Audit and Supervisory Committee. On the Sharp website can be found the “Standards for Independence of Outside Directors,” which stipulates standards for judging the independence of outside directors.

The Audit and Supervisory Committee exchanges opinions periodically with the representative directors, directors, accounting auditors, and the head of the internal audit division, and seeks to attain legality, propriety, and efficiency in business execution. Sharp has also established an Audit and Supervisory Committee Office composed of employees with specialisms in specific fields such as accounting and law, which supports the Audit and Supervisory Committee.

Sharp receives proposals for operational improvements from its accounting auditor, PricewaterhouseCoopers Aarata LLC.

To preserve the independence of the internal audit division from the business execution divisions, an Internal Audit Division has been established directly under the jurisdiction of the Chair/President. It makes defined proposals on operational and business improvements through audits of the propriety of business execution and the fairness and efficiency of management, as a means of increasing management efficiency and supporting the internal control system.

Management of Related Party Transactions*

Sharp has established the Regulations on Related Party Transactions. Sharp manages these transactions so that they will not adversely affect the company’s finances or business performance.

Sharp has also created a list of related parties. When entering into business with the counterparty, Sharp determines whether or not the transaction should be considered a related party transaction. Such transactions undergo all of the internal procedures that are followed for conventional transactions. In addition, Sharp assesses the need for the transaction, its soundness, and the propriety of its terms. This allows Sharp to exercise prudence when deciding on business deals.

  • Related party transactions and management-involved transactions:
    Related party transactions are transactions with a company or person having a certain level of connection with Sharp, including Sharp’s officers, subsidiaries, and major shareholders.
    Management-involved transactions are transactions that Sharp’s management personnel have introduced or planned.

Corporate Governance System of Sharp Corporation (as of June 25, 2019)