Corporate GovernanceGeneral Meeting of ShareholdersBoard of Directors (Directors)CSR Management Ofce• Corporate Ethics Committee• Customer Satisfaction Committee• Environmental Preservation Committee• Social Contribution Committee• Safety, Disaster Prevention, and Health CommitteeAudit & Supervisory Committee(Directors serving as Audit & Supervisory Committee members)Audit Ofce Representative DirectorsManagement decisionsOperational executionManagement Meetings(Executive Ofcers)Operational Execution Divisions• Administrative Division• Marketing Division• Production Division• Technical Division• Domestic and Overseas SubsidiariesAppointment / DismissalPromotionInforming / ReportingAppointment / DismissalAppointment / DismissalInternalAuditingAuditing / SupervisionCooperationCooperationInformingAccountAuditing /Internal Control AuditingIndependent AuditorBasic PhilosophyThe Company believes that the fundamentals of corporate governance are to achieve thorough legal compliance, to increase management transparency and promote corporate ethics, and to make prompt decisions and effectively execute operations. By enhancing and rein-forcing corporate governance, we aim to further increase our corporate value and joint prots with shareholders.Corporate Governance System1. Corporate Governance SystemThe Company has selected the Company with Audit & Supervisory Committee system described in the Companies Act of Japan for its organizational structure. The Company has placed directors that are also Audit & Supervisory Committee members with voting rights on its Board of Directors in order to strengthen the Board’s supervisory function, with a view to stepping up corporate governance and to streamlining management even further. The Company has appointed 16 directors, of which four are Audit & Supervisory Committee mem-bers and four are outside directors.Held once a month to make important decisions with regard to management, Board of Directors’ meetings are also held on an ad hoc basis as necessary to strive for rapid decision making. Primarily comprising executive ofcers (including directors serving concurrently) responsible for the execution of business, management meetings are also held once a month and endeavor to streamline business operations through the sharing of information among all business divisions.The Audit & Supervisory Committee meets once a month and conducts monitoring audits that focus on matters reported from the Audit Ofce, which is the Company’s internal control division. In addition to performing audits covering the appropriateness and legality of the execution of directors’ duties, each and every Audit & Supervisory Committee member also plays a role in supervising the execution of the directors’ duties through the exercise of the voting rights on the Board of Directors.•Evaluation of Board of Directors’ effectivenessIn March 2016, the Company conducted an evaluation of the effectiveness of the Board of Directors. Details are as follows.OverviewBased on the principles of Japan’s Corporate Governance Code, all 16 directors lled out a survey on matters such as the structure and operation of the Board of Directors, which included some open-ended questions. The results of these surveys were analyzed by representative directors, and we received a nal evaluation from outside directors. In this nal evaluation, outside directors stated the status of the Board of Directors was rational in terms of structure and operation but also mentioned that they would like to receive materials related to meetings of the Board of Directors further in advance. Based on this feedback, we will take steps to develop an environment that facilitates improved Board of Directors’ effectiveness through such measures as early supply of meeting materials.:: THE BASE THAT SUPPORTS GROWTHLINTEC ANNUAL REPORT 201632


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