CAPCOM Investor Relations

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Integrated Report 2019

Captivating a Connected World
Top page > The management philosophy and corporate governance of Capcom's leaders as seen by External Director Toru Muranaka

Message from an External Director

The management philosophy and corporate governance of Capcom's leaders
as seen by External Director Toru Muranaka

In the approximately three years since being appointed external director at the June 2016 Shareholders' Meeting, I have seen steady activity directed toward growth in Capcom's operational divisions, in addition to an unwavering approach to governance by top management. All of this has been against the backdrop of great change in the video game market as Capcom pushes to promote digital sales and global growth. I feel that my role is to present constructive questions to management personnel, drawing on my experience as an external director at other companies and my legal knowledge as an attorney.

Q

Since being appointed external director, what have you noticed about Capcom's Board of Directors?

A

The adoption of external directors is compulsory for a company with an audit and supervisory committee, and at Capcom independent external directors account for more than one third of all its directors.

We receive explanations of agenda items before Board of Directors meetings are convened and, on each occasion, have opportunities to exchange opinions on wide-ranging management issues not limited to those agenda items. The advice and input given during these discussions are then reflected in the deliberations of the Board of Directors. I feel that being able to grasp Capcom's management risks, initiatives, and issues during these talks prior to Board of Directors meetings is effective in supporting discussions at the board meetings.

Additionally, although the schedule is irregular, independent external directors also set up opportunities to exchange opinions with the CFO and Company directors who are full-time Audit and Supervisory Committee members, which allows us to discuss company-wide management issues that are difficult to fully delve into at Board of Directors meetings. Each independent external director focuses on Capcom's management issues using his or her particular acumen, which I think represents a diverse range of talented human capital.

Q

As an external director, what do you emphasize within Capcom's Board of Directors?

A

Under its system of being a company with an audit and supervisory committee, Capcom's Board of Directors entrusts deliberation on what is called "execution of critical business" to the Corporate Management Council, which is primarily comprised of internal corporate officers, and said business is largely excluded from items brought up to the Board of Directors. Consequently, all basic matters related to business execution, except for business plans, budgets, and the like, are positioned as items reported on at Capcom's Board of Directors meetings. As an external director, I draw on my experience in similar roles at other companies and my legal knowledge as an attorney, and make sure to present questions and opinions to the Board of Directors addressing the consistency of decision making and the logic of judgment rationale pertinent to management.

Since I am an external director who is not an Audit and Supervisory Committee member, I am not directly involved in audits by that committee. However, as the chair of the Compliance Committee, I am involved in reports and deliberations on the status of Capcom's internal hotline and cases of compliance violations. Through these activities, I am committed to building ties with the Internal Control Division and other divisions, while also monitoring initiatives to prevent and, when necessary, quickly detect legal violations and inappropriate conduct.

Q

What is necessary to further strengthen the functions of Capcom's Board of Directors, and what are your goals going forward as an external director?

A

Under the strong leadership of the CEO, who is Capcom's founder, the Company has not only handled risks, but has also channeled management resources in a courageous direction. In recent years, the Company has been devoting energy to new fields, such as global business expansion and the area of esports. With regard to promoting existing business, the Company has established and deployed the systems necessary for internal control, while also progressively building and rolling out organizational and control structures for corporate governance that contributes to achieving even more intricate and flexible business expansion.

A challenge going forward —which I, as an external director, would like to have a hand in tackling —will be developing a governance structure able to propose and promote new, effective growth strategies even if the current CEO retires.

CAPCOM INTEGRATED REPORT 2019

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