Corporate Governance
Under the Company Law of Japan, Pioneer has elected to structure its corporate governance system with a Board of Corporate Auditors. The Board of Directors, which includes several outside directors, decides on fundamental issues such as management policies and supervises the execution of business activities, while the Board of Corporate Auditors, more than half of which consists of outside corporate auditors, audits the directorsf performance of their duties.
Based on this institutional structure, Pioneer has adopted an executive officer system to expedite the execution of business activities and clarify the responsibilities for each business. Meanwhile, aiming to enhance the transparency of decision making, Pioneer has established a Group Executive Committee and voluntary advisory committees to the Board of Directors.
Corporate Governance Structure (As of June 29, 2011)
Board of Directors/Board of Corporate Auditors
Pioneer has adopted a corporate auditor system of corporate governance. Under this system, the Company has established the Board of Directors as a decision-making body for matters of the highest importance, such as management policies, and as a supervisory body. The representative directors are responsible for business execution, while the Board of Corporate Auditors is responsible for auditing. In fiscal 2011, the Board of Directors held eight meetings, while the Board of Corporate Auditors held 14 meetings.
Several fully independent outside directors have been elected to strengthen the supervision of business execution of the Board of Directors. In addition, Pioneer has shortened the term of office of directors to one year, in order to further clarify their responsibilities and respond promptly to changes in the business environment by increasing the opportunities for shareholders to elect directors.
Furthermore, the Company has adopted an executive officer system to expedite business execution and clarify the responsibilities for each business.
Group Executive Committee
The Group Executive Committee, which is formed to reinforce decision making, comprises directors and executive officers chosen by the Board of Directors and holds regular meetings once per week, in principle. The Group Executive Committee, under the supervision of the Board of Directors, thoroughly discusses issues such as priorities for advancing business activities, investment projects, Group realignment, and Group-wide management strategies, as well as medium- and long-term policies, and approves these issues, or, in cases where the Board of Directors has decision-making authority, the Group Executive Committee reports on these issues to the Board of Directors. In fiscal 2011, the Group Executive Committee held 35 meetings and deliberated approximately 160 issues, functioning effectively as part of the management decision-making process in support of the Board of Directors.
Voluntary Advisory Committees
Pioneer has voluntarily established the following three advisory committees to the Board of Directors, each chaired by an outside director. Their goals are to improve management transparency and strengthen corporate governance. These committees report on the results of their deliberations to the Board of Directors, and make related recommendations.
The Board of Directors discusses their reports and recommendations, giving due consideration to their content.
Nominating Committee
This committee discusses matters concerning the election and dismissal of directors; the election, dismissal, promotion, and demotion of executive officers; and the election of corporate auditors.
Compensation Committee
This committee discusses issues such as policies and schemes for remuneration and other benefits for directors and executive officers as well as individual evaluations and compensation levels.
Special Committee
This committee discusses measures to deal with affairs that have a significant impact on corporate value, such as mergers and acquisitions, when they occur, or when they are likely to occur, from the standpoint of legality, reasonableness, and appropriateness.
Ensuring Appropriate Execution of Business
To ensure that directors, officers, and employees throughout the Group share its corporate philosophy, to gMove the Heart and Touch the Soul,h Pioneer has determined a gGroup Visionh and formulated the gRules of the Pioneer Group.h Aimed at ensuring that the Company will remain trusted and respected by society as a good corporate citizen, the gPioneer Group Charter for Corporate Operationsh is foremost in importance among the gRules of the Pioneer Group.h These rules also consist of the gPioneer Group Code of Conduct,h which stipulates specific decision-making and behavioral standards for Group directors, officers and employees in the performance of their business duties, rules outlining the scope of responsibility and authority for each Group company, and other rules related to compliance.
The Company has established the Business Ethics Committee chaired by an outside director to ensure legal compliance as well as thorough observance of the gPioneer Group Code of Conduct.h
The gPioneer Group Charter for Corporate Operationsh embodies the spirit of fair-minded corporate activities that respect social justice. The Company resists anti-social forces in a systematic and resolute manner, to eliminate anti-social forces that threaten social order and security. This includes establishing a department to centrally coordinate responses to anti-social forces, working together with external specialist institutions, and thorough training and communication within the Group regarding how to deal with anti-social forces.
To ensure appropriate disclosure of corporate information and the accuracy of financial reporting, Pioneer has formulated basic rules and principles as well as designated departments responsible and coordinated with external specialists, with the aim of strengthening its information management system.
Furthermore, to ensure proper responses we have developed a system necessary for ensuring proper operations by establishing a response policy in the event of a crisis, designating the authority and responsibilities of each Group company, and setting a policy for the approval process.
The Audit Division audits the status of the Groupfs entire management and operations, and confirms compliance with laws and internal regulations. The Audit Division also works with the internal audit staff at Group companies and the Board of Corporate Auditors to enhance the audit function with regard to internal control systems and risk management, and areas related to corporate ethics, quality control, and environmental protection.
In addition, an internal reporting system, the gBusiness Ethics Hotline,h has been established to quickly detect and appropriately address improper behavior. The hotline is set up outside the Company to ensure the anonymity of persons making reports and the confidentiality of those reports. The details of reports received by the hotline are passed on to the Business Ethics Committee, which is chaired by an outside director, and to the Board of Corporate Auditors, more than half of whom are outside corporate auditors, making it possible to respond to that information in good faith.
