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| DENSO is working to strengthen its corporate governance
systems. The Company sees this effort as vital not only to the improvement of
Group competitiveness but also to the maintenance and improvement of long-term
business performance in today’s rapidly changing global markets. |
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To maintain strong and healthy corporate institutions, DENSO developed a variety
of internal governance mechanisms to support sound, efficient and highly transparent
management. At their heart, the systems are based on the continuous disclosure
of information —both within the company and to shareholders, investors and
other stakeholders. |
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Management System |
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In June 2004, DENSO introduced a new management system designed to speed up
decision-making and operations. The key changes were a reduction in the size of
the Board of Directors from 32 to 13 members, and the introduction of non-board
managing officers. Under this new system, the managing officers, including one
non-Japanese, are able to focus exclusively on operations in the divisions for
which they are responsible. Eight of the 13 directors are assigned to supervise
activities in all divisions. These directors play a bridging role between management
and day-to-day operations. In addition, the term of office for directors has been
reduced to one year to create a management structure capable of adapting flexibly
to changes in the business environment and to maintain clearer chains of management
responsibility within individual business terms. By streamlining the Board of
Directors, DENSO strengthened group-level functions in the area of management
strategy and decision-making. |
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Corporate Oversight |
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Two standing corporate auditors and three external corporate auditors oversee
the actions of the Board of Directors, and the operations and financial status
of DENSO and its domestic and overseas subsidiaries. In addition to these legally
mandated functions, DENSO also established internal audit departments in DENSO
and its major subsidiaries worldwide. Each department in DENSO and its subsidiaries
conduct internal checks of their own governance systems. There are also continual
site audits designed to ensure not only legal compliance, but also appropriate
management and operational procedures. Auditors hold monthly meetings to set audit
policies and discuss audit results. They also work to improve the efficiency and
quality of audit activities. |
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Compliance |
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In 1997, DENSO established the Corporate Ethics Committee. Using the Legal
Department as its secretariat, this Committee checks all aspects of corporate
activity from the perspectives of legal compliance and corporate ethics. The Committee
also works to inform employees about corporate ethics through education programs
and other activities, as well as through the publication of ethical and behavior
guidelines for employees, including the DENSO Code of Business Conduct. In 2003,
DENSO established the Business Ethics Helpline for employees who need advice or
wish to report compliance-related issues. The helpline is run by external legal
advisors. These initiatives are indicative of the importance that DENSO places
on compliance in its management activities. |
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Risk Management |
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Risk factors are multiplying and becoming increasingly diverse as business
activities expand overseas, information technology makes rapid advances, and the
impact of corporate social and environmental performance grows in importance.
In May 2003, DENSO established a Risk Management Committee to manage these various
risks from a global perspective. Measures to strengthen DENSO’s capacity
to cope with risk have included an increase in the number of risk management items
from 36 to 59. Other initiatives designed to minimize the business impact of risk
factors at Group level include the improvement of preventive systems and emergency
response systems. |
