The Company considers a system of internal controls to be a mechanism for strengthening its corporate governance system, embodying its corporate philosophy, and achieving its management goals. We plan to step up the construction and operation of governance systems for risk management, compliance, and other areas from the perspective of Group management, to improve our corporate value, and achieve sustainable development. In terms of corporate bodies, the Company increased the number of Outside Directors to two at the 70th Annual General Meeting of Shareholders held on June 28, 2016 and is focusing on reinforcing the supervisory function in relation to the management strategy body. Five audit & supervisory board members, including three outside audit & supervisory board members, inspect the directors’ performance of their duties. Two standing audit & supervisory board members strive to ensure the effectiveness of auditors’ auditing in the Group by concurrently becoming non-standing auditors of major Group companies. At the meeting of the Board of Directors held on May 12, 2017, the Company passed a resolution to establish a Compensation Advisory Committee chaired by an Outside Director and of which more than half of the members are Outside Directors. Through deliberations of the Compensation Advisory Committee, the Company will ensure the objectivity and transparency of the procedure for determining the remuneration of directors.
We plan to make ongoing improvements to our system of internal controls so that it functions effectively for the entire Group.