Sony 2003 Annual Report Download - page 77

Sony Corporation Annual Report 2003 75
Addition of Sony’s Own Rules to Strengthen
Governance: In addition to the requirements of the
Commercial Code, Sony has established rules regarding
the operation of the Board of Directors and its
committees. These rules are designed to ensure the
independence of the Board of Directors from the
execution of business operations and provide a
framework for the adequate functioning and decision-
making of the committees, each of which operates
with fewer members than the Board of Directors.
< Primary Rules for Ensuring Independence of the
Board of Directors >
■Rule regarding separation of the roles of Chairman of
the Board, Vice Chairman of the Board and Represen-
tative Corporate Executive Officers
■Rule limiting number of times outside Directors can
be re-elected and establishing a rotation system for
committee members
■Rule mandating that outside Directors must be
selected as the chairmen of committees
< Primary Rules for Ensuring the Adequate
Functioning and Decision-making of Committees >
■Rule establishing a maximum and minimum number
of Directors
■Rule establishing criteria for directors to avoid
conflicts of interest and ensure independence
■Rule establishing regulations for the fundamental
composition of each committee, including a minimum
required number of Nominating Committee members
(at least five), prohibition of the Group CEO and COO
becoming a member of the Compensation Committee,
and prohibition, as a general rule, of an Audit
Committee member concurrently being a member of
any other committee
Due to requirements imposed by various U.S.
securities regulations, all members of the Audit
Committee are chosen from Directors who qualify as
“independent directors” as stipulated by U.S. regula-
tions. Furthermore, this committee also includes an
individual who is qualified as a financial expert and, to
ensure an adequate auditing function, there is one
committee member who is assigned to this position on
a full-time basis. In addition, Sony has established a
support staff for the Audit Committee that is indepen-
dent from the company’s business operations.
Roles of Each Corporate Governance Body
Board of Directors and Three Committees: The
newly organized Board of Directors and its three
committees, together with the Board, perform certain
oversight functions. Their duties include the determina-
tion of fundamental management policies for the Sony
Group as well as ensuring that the Sony Group is
managed legally and properly. The primary roles of the
Board are as follows.
< Board of Directors >
(1) Determination of fundamental management policies
for the Sony Group
(2) Determination of Directors comprising each
committee
(3) Appointment and dismissal of Corporate Executive
Officers
(4) Supervision of execution of Sony Group’s business
operations
< Committees of the Board of Directors >
Nominating Committee: Proposes nomination and
dismissal of Directors
Audit Committee: Audits the execution of duties of
Directors and Corporate Executive Officers, determines
proposals to nominate and dismiss the independent
auditors
Compensation Committee: Determines the individual
compensation of each Director and Corporate
Executive Officer
Corporate Executive Officers and Executive Board:
The Corporate Executive Officers (“Shikko-yaku”) are
responsible for conducting all the business operations
of the Sony Group within the scope of authority
delegated by the Board of Directors. Their objective is
to increase the Sony Group’s corporate value. Signifi-
cant decision-making authority has been transferred to
the Executive Board, which is made up of all Corporate
Executive Officers, and to each Corporate Executive
Officer with regard to investments, business alliances
and other actions related to the execution of business
operations. It is expected that this delegation of
authority will enable the Sony Group to be managed in
a more dynamic and speedy manner than in the past.