Corporate Governance
Under the Companies Act of Japan, Pioneer has elected to structure its corporate governance system with a Board of Corporate Auditors. The Board of Directors decides on fundamental issues such as management policies and supervises the execution of business activities, while the Board of 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. Aimed at improving corporate governance, in June 2012 a new structure was established to enable the directors, with their number reduced from 10 to seven, to specialize in their decision-making and supervisory functions from a Group-wide perspective, and the executive officers to enhance their executing functions.
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 27, 2012)
Board of Directors, Board of Corporate Auditors and Executive Officers
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. Furthermore, executive officers are elected to expedite business execution and clarify the responsibilities for each business.
Several highly independent outside directors, who have no significant transactional relationships with the Pioneer Group, have been elected to strengthen the supervisory function of the Board of Directors as to business execution. 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 opportunities for shareholders to elect directors. The Board of Corporate Auditors, half or more of which consists of outside corporate auditors with a high degree of independence, audits the directorsf performance of their duties. In fiscal 2012, the Board of Directors held nine meetings, while the Board of Corporate Auditors held 13 meetings.
Group Executive Committee
The Group Executive Committee, which was created as a process for reinforcing the Board of Directorsf decision-making function, comprises 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 2012, the Group Executive Committee held 35 meetings and deliberated approximately 100 issues.
Voluntary Advisory Committees
To enhance management transparency and strengthen corporate governance, Pioneer has voluntarily established a Nominating Committee, a Compensation Committee, and a Special Committee, each chaired by an outside director, as advisory committees to the Board of Directors. The Nominating Committee discusses matters concerning the election and dismissal of directors and executive officers, and the election of corporate auditors. The Compensation Committee discusses issues related to remuneration and other benefits for directors and executive officers. The Special Committee discusses matters that have a significant impact on corporate value, including mergers and acquisitions. These committees report on the results of their deliberations and make related recommendations to the Board of Directors, and the Board of Directors gives full consideration to these reports and recommendations in the course of its deliberations.
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 include 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 authority and responsibilities for each Group company, and other rules related to compliance.
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, designated responsible departments, 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 internal audit function with regard to internal control systems, risk management, and areas related to corporate ethics, quality control, and environmental protection.
Business Ethics Committee
The Company has established a gBusiness Ethics Committee,h chaired by an outside director, to ensure legal compliance as well as thorough observance of the gPioneer Group Code of Conduct.h
In addition, a gBusiness Ethics Hotlineh has been established as an internal reporting system, to quickly detect and appropriately address behavior that is in violation of the gPioneer Group Code of Conduct.h The hotline is set up outside the Company to ensure the anonymity of persons making reports and to clarify the details of those reports. The details of reports received by the hotline are simultaneously referred to the Business Ethics Committee and the Board of Corporate Auditors, making it possible to respond to that information resolutely and in good faith.
