Sony 2012 Annual Report Download - page 46

Corporate Governance
Sony has long been committed to strong corporate
governance, as one of its most important manage-
ment initiatives. As a part of this eort, in 2003, Sony
adopted the “Company with Committees” corporate
governance system under the Companies Act of
Japan. In addition to complying with the requirements
of applicable governance laws and regulations, Sony
has introduced its own requirements to help improve
and maintain the soundness and transparency of its
governance by strengthening the separation of the
Directors’ function from that of management and
advancing the proper functioning of the statutory
committees. Under Sony’s system, the Board of Directors
defines the respective areas for which each of the
Corporate Executive Officers is responsible and dele-
gates to them decision-making authority to manage
the business, thereby promoting the prompt and
ecient management of the Sony Group.
Governance Structure
Sony Corporation is governed by its Board of Directors, which
is appointed by resolution at the annual shareholders’ meet-
ing. The Board has three committees (the Nominating Com-
mittee, Audit Committee and Compensation Committee),
each consisting of Directors named by the Board of Directors.
Corporate Executive Ocers are appointed by resolution of
the Board of Directors. In addition to these statutory bodies
and positions, Sony has Corporate Executives who carry out
business operations within designated areas.
Sony Initiatives
To strengthen its governance structure beyond legal require-
ments, Sony Corporation includes several provisions in its
Charter of the Board of Directors to help ensure the separa-
tion of the Board of Directors from the execution of business,
and to advance the proper functioning of the statutory
committees.
The main such provisions are as follows:
• separating the roles of the Board chairperson/vice chairperson
and Representative Corporate Executive Ocers;
• limiting the number of terms for outside Directors;
• appointing chairs of statutory committees from the ranks of
outside Directors;
• setting forth qualications for Directors for the purpose of
eliminating conflicts of interest and ensuring independence;
• raising the minimum number of Nominating Committee
members (five or more) and requiring that at least two
Directors of the Committee be Corporate Executive Ocers;
• suggesting that, as a general rule, at least one Director of
the Compensation Committee be a Corporate Executive
Ocer;
• prohibiting the CEO or COO of Sony (or persons in any
equivalent position) from serving on the Compensation
Committee; and
• discouraging the concurrent appointment of Audit Committee
members to other committees.
Risk Management System
Each Sony Group business unit, subsidiary or aliated company,
and corporate division is expected to review and assess
business risks on a regular basis, and to detect, communicate,
evaluate and respond to risk in their particular business areas.
In addition, Sony Corporation’s Corporate Executive Ocers
have the authority and responsibilit y to establish and
maintain systems for identifying and controlling risks with the
potential to cause losses or reputational damage to the Sony
Group in the areas for which they are responsible.
The Corporate Executive Ocer in charge of Compliance
is tasked with promoting and managing the establishment
and maintenance of such risk management systems through
the coordinated activities of the Group Risk, Compliance,
Internal Audit and other relevant groups.
The Group Risk Of fice has been established in Sony
Corporation to promote risk management initiatives, such
as business continuity planning, across the organization.
Shareholders’ Meeting
Board of Directors
Corporate Executive Ocers
Corporate Executives
Nominating Committee
Oversight
Management
Compensation Committee Audit Committee
Internal Audit Division
Independent
Auditor
Oversight
Determine
committee
members
Appointment/dismissal
Delegation
Appointment/dismissal
Delegation
Monitor
performance
of their duties Coordination
Audit report
Appointment/dismissal
Make proposals to appoint/dismiss Directors Make proposals to appoint/dismiss independent auditor
Determine
compensation
Determine
compensation
Report
Oversight/
evaluation
Monitor
performance
of their duties
Corporate Governance Structure
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