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Revised: July 2010
Nidec and its subsidiaries (the "Group") pursue continuous enhancement of corporate management in the manner consistent with our business creed, three management principles, and our qualitative objectives of achieving "high business growth," "high profits," and "high shareholder value."
In this context, we codified our corporate governance policies in May 2006 to reinforce the Group's overall corporate governance activities and communicate our commitment and responsibilities to stakeholders.
Nidec Group Corporate Governance Policy
1. Principle
The Nidec Group Corporate Governance Policy aims for sustainable enhancement of corporate value based on ethical integrity and social trust. Toward this end, we pursue sound, efficient and transparent business management through ceaseless improvement in internal controls and information disclosure.
2. Stakeholder Engagement
Sustainable enhancement of corporate value builds upon harmonious relations with stakeholders. Our definition of stakeholders extends broadly and includes not only our shareholders, customers, suppliers, individual employees, but even the communities and the environment that can be directly or indirectly affected by the Group's objectives and actions. As a business seeking growth through fulfillment of social responsibility and sustainable corporate value development for our stakeholders, we will continue to increase our focus on products and activities that are green and socially desirable. This concept constitutes a common thread running through our entire business activities, most notably reflected in our engagement in the brushless DC motor technology, which provides excellence in energy efficiency, operating life and noiselessness for IT and audiovisual devices, automobiles, home appliances and industrial machinery.
3. Business Execution and Management Oversight
The Board of Directors makes material management decisions and oversees the Group's business operations as a whole. The Board of Directors includes highly independent outside directors (non-executive directors), who are dedicated to monitoring managerial decisions from an objective perspective and further improving management transparency for all stakeholders.
The Board of Corporate Auditors audits directors' execution of business and performs financial audits, assuming responsibilities similar to those of a U.S. Audit Committee.
The Management Meeting and the Managing Directors' Meeting compose the Group's business execution mechanism and discuss specific operational issues. The Management Meeting convenes once a month to assess the present state of business and determine the next course of action, based on the monthly performance data and outcome of discussions at respective business unit-level meetings. At the plenary meeting, the directors and officers from respective departments/business units get together to share the final conclusions. The Managing Directors' Meeting, the consultative body to the CEO, is held and chaired by the COO on a weekly basis to discuss operational directions, plans, and other important considerations in the execution of business.
With a view to improving management efficiency, the Group has adopted an executive officer system and a site oriented business management system. The executive officer system delegates part of the Board responsibilities to executive officers, thereby allowing the Board of Directors to focus on more proactive, in-depth discussions on the Group's strategic directions and enables executive officers to accelerate the execution of business. In the meantime, the site oriented business management system makes clear the locus of respective managerial responsibilities and contributes to the maintenance and improvement of a viable internal control system.
4. Internal Control
The Group commits itself to the enhancement of its management soundness and transparency by specifying risk management responsibilities and maintaining compliance capabilities generally required as listed companies in Japan and the United States. The Group conforms to its internal control policies compiled as "Nidec Policy Manual," based on which the Internal Audit & Management Advisory Division, a specialized oversight division, regulates the Group's internal controls over financial reporting and evaluates their effectiveness in the manner consistent with the Sarbanes-Oxley Act in the United States and relevant internal control regulations in Japan. In addition, the Compliance Committee and the Risk Management Committee, both operating under the direct supervision of the Board of Directors, are dedicated to the creation of a strong internal control environment for the Group. Each Committee has its subordinate body, named the Compliance Office and the Risk Management Office, respectively.
5. Information Disclosure
The Group ensures strict adherence to its Disclosure Policy and conducts fair, timely and proper disclosure of information in order to offer appropriate accountability and transparency to shareholders and relevant stakeholders. Each disclosure item is carefully reviewed by the Disclosure Committee with respect to materiality, legality and adequacy of disclosure. In the meantime, shareholder opinions and viewpoints are constantly fed back to management through day-to-day investor relations activities.
6. Subsidiary Governance
Unified under the same management principles, each company of the Group operates in compliance with Nidec's internal control system. The members of the management team at each Nidec subsidiary, including those sent from Nidec, undertake substantial discussions in managerial decision-making with a significant involvement of outside corporate auditors and experts to ensure that specific circumstances in each company are rationally considered and that each company's independency is appropriately assured.
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