Sony 2005 Annual Report Download - page 35

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32 Sony Corporation
Sony follows the “Company with Committees” corporate governance system
under the Japanese Commercial Code, under which the Board of Directors
maintains an important oversight role separate from the executive function
and delegates broad authority to the Corporate Executive Officers to run the
company’s affairs. This separation of functions allows for sound and transparent
management as well as swift and dynamic decision making in a rapidly changing
environment.
Governance Structure
As statutory decision-making bodies, Sony has established the Board of Directors,
three Board committees (the Nominating Committee, Audit Committee and Compen-
sation Committee) and the Corporate Executive Officers. In addition to those
statutory bodies, Sony has Corporate Executives who carry out business operations
within specific areas. The primary roles of each body are set out below.
Board of Directors
1. Determines the fundamental management policies of the Sony Group
2. Oversees the management of Sony Group’s business operations
3. Determines Directors who comprise the statutory committees
4. Appoints and dismisses Corporate Executive Officers
Statutory Committees
Nominating Committee: Proposes the appointment and dismissal of Directors
Audit Committee: Audits the execution of duties by Directors and
Corporate Executive Officers with regard to financial
statements, disclosure controls and procedures,
internal controls, compliance structure, risk manage-
ment structure, internal audit structure, whistleblower
protections and other matters; proposes appointment/
dismissal of, approves the compensation of, oversees
and evaluates Sony’s independent auditors.
Compensation Committee: Determines remuneration for individual Directors,
Corporate Executive Officers, Corporate Executives
and Group Executives.
Corporate Executive Officers
Make decisions regarding the execution of Sony Group business activities within the
scope of the authority delegated to them by the Board of Directors.
Corporate Executives
Carry out business operations within specific areas, including business units,
research and development and/or head office functions, in accordance with the
fundamental policies determined by the Board of Directors and the Corporate
Executive Officers.
Sony Initiatives
To strengthen governance beyond Commercial Code requirements, Sony has added
several provisions to its Regulations of the Board of Directors to ensure the separation
of the Board of Directors from the execution of business activities, and to advance the
proper functioning of the statutory committees. The main provisions are as follows:
•Separating the roles of the Board chairman/vice chairman and Representative
Corporate Executive Officers
•Limiting the number of terms outside Directors may serve and rotating committee
membership
•Appointing chairmen of statutory committees from the ranks of outside Directors
•Instituting qualifications for director candidates aimed at eliminating conflicts of
interest and ensuring independence
•Raising the minimum number of Nominating Committee members (five or more),
prohibiting the appointment of the CEO or COO of Sony Group (or person at any
equivalent position) to the Compensation Committee, and discouraging the
concurrent appointment of Audit Committee members to other committees
Meeting Record
During the year ended March 31, 2005, the Board of Directors convened seven
times. The Nominating Committee met seven times, the Audit Committee 15 times,
and the Compensation Committee seven times.
Corporate Governance/New Directors and Corporate Executive Officers
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