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IR Top Page > Management Objectives > Corporate Governance

Corporate Governance

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(as of September 1, 2016)

Shareholders and investors have made the practical and effective functioning of internal control into a key issue amidst an epidemic of corporate misconduct in Japan and overseas. In this section, Capcom will explain the corporate governance structure and systems that it has initiated so far based on the key concepts of "effectiveness and visibility" in terms of the results of third party assessment.

(Assessment areas are highlighted in yellow.)

PDF Corporate Governance Report  (PDF: 528KB/62pages) (June 12, 2017)

PDF Capcom's basic policy for Japan's Corporate Governance Code  (PDF: 360KB/46 pages) (June 12, 2017)

How the Company has Addressed All 73 Principles of the Corporate Governance Code

Structure and Initiatives

コーポレートガバナンス体制

Corporate Governance Structure

Enhancing Management Health and Transparency while Responding to Changes in the Environment

Capcom is aware that comprehensive corporate governance ranks among management's most important priorities. Because of this, in addition to enhancing management soundness and transparency, by building a trusting relationship with our stakeholders, such as shareholders, business partners, employees and regional society, we are increasing corporate value.

Shareholders' Meeting (Convened on June 17, 2016)

Determines Important Matters as the Highest Decision-Making Body

Capcom's general shareholders' meeting serves as its highest decision-making body and determines important matters as well as reports audit results of consolidated financial statements.

We have scheduled the meeting to take place around 10 days prior to the date on which most other companies in Japan hold their general shareholders' meetings to ensure as many shareholders as possible can be in attendance. We have also made it possible for shareholders to exercise their voting rights over the Internet using a computer or smartphone. In addition, we participate in an electronic voting rights exercise platform for institutional investors.

Seven resolutions were brought up for discussion at this year's shareholders' meeting, all of which were approved and passed.

Please see the following page for the number of votes in favor, opposed or abstained for the matters to be resolved at the year ended March 31, 2016, general shareholders' meeting, as well as the results of voting.

Related Principles of the Corporate Governance Code

General Principle 1, Principle 1.1- 2

Board of Directors (Convened 14 times in the year ended March 31, 2016) Supervision

Management Decisions that Incorporate Outside Opinions

In addition to the regular Board of Directors meeting being convened once every month, it is also convened when the need arises.

The Board of Directors is composed of a total of twelve directors. Of that total, five directors are Audit and Supervisory Committee members. Also, of the twelve directors, six are external directors. All six of the external directors have been registered with Tokyo Stock Exchange, Inc. as independent directors.

Related Principles of the Corporate Governance Code

General Principle 4, Principle 4.1- 3, Principle 4.5- 8, Principle 4.12- 3

Audit and Supervisory Committee
(newly established for the year ending March 31, 2017)[NEW]Audit

Accounting Auditors Partner with Internal Auditing Department to Monitor Management

The Audit and Supervisory Committee is composed of five directors (three of whom are external directors). Also, the collection and sharing of information is carried out by selecting two full time members of the Audit and Supervisory Committee in addition to using an internal control system to carryout organizational audits and supervision.

In addition to formulating auditing policies and providing consultation regarding audit results, the Audit and Supervisory Committee cooperates with the Internal Audit Division and gives advice to audited divisions regarding items to be improved, etc., working to see that internal control functions effectively in each division.

They also objectively and fairly check the legality and propriety of execution of operations by directors by exchanging opinions and information with the Accounting Auditors and attending important meetings.

Related Principles of the Corporate Governance Code

General Principle 4, Principle 4.4- 8, Principle 4.13

The Nominating Committee[NEW]

A Consulting Organization For Selecting Candidates for Director

In June 2016 Capcom established a voluntary nominating committee with an external director as committee chairman as a consulting organization to the Board of Directors in order to ensure the objectivity and propriety of the decision process to select candidates for director.

Related Principles of the Corporate Governance Code

Principle 4.10- 11

The Remuneration Committee (Convened two times in the year ended March 31, 2016)

Recommending Details of Director Compensation

Capcom has established a voluntary remuneration committee with an external director as committee chairman as a consulting organization to the Board of Directors in order to ensure the objectivity and appropriateness of the decision process for setting compensation of directors (excluding directors who are members of the Audit and Supervisory Committee).

Related Principles of the Corporate Governance Code

Principle 4.2, Principle 4.10

The Compliance Committee (Convened four times in the year ended March 31, 2016)

Focusing on Compliance as an Important Management Issue

In order to ensure compliance, the Compliance Committee meets quarterly and has an external director with the qualification of a lawyer as the chairman. In order to prevent illegal activities and misconduct Capcom has established Compliance Hotline Rules and, so that all employees can directly report illegal activities or misconduct, we have also established an internal hotline, and conduct periodic compliance checks to regularly monitor status, etc. To ensure effectiveness, problems confirmed by this committee and issues that must be dealt with are properly disposed of.

Related Principles of the Corporate Governance Code

Principle 2.3, Principle 4.3, Principle 4.10

Accounting AuditorsAudit

Ensuring and Verifying Accounting Transparency

Capcom has engaged KPMG AZSA LLC for financial audits as prescribed by the Companies Act and financial audits as prescribed by the Financial Instruments and Exchange Law. There is no relationship involving financial or other interests between Capcom and this audit corporation or the engagement partners at this firm who perform audits at Capcom.

Auditor Remuneration (Year ended March 31, 2016)
  Audit Operations Non-Audit Operations
Delivery company 41 million yen 0 million yen
Consolidated subsidiary 2 million yen -
Total 43 million yen 0 million yen
Auditing Company Names of Certified Public Accountants
KPMG AZSA LLC Designated and
Engagement Partner
Masaaki Doi
Hiroshi Miura
Takuya Obata

Note: Assistants to certified audit operations; Certified public accountants: 10; Others: 7 (those who have passed the certified public accountant exam and persons in charge of system audits)

Related Principles of the Corporate Governance Code

Principle 3.2

Internal Auditing DivisionAudit

Ensuring and Verifying Legal Compliance and Operating Efficiencies

We have established an internal auditing division as an internal audit organization in support of the Audit and Supervisory Committee.
This division primarily conducts regular monitoring of each division and Group companies from the standpoint of risk management.
In addition information is collected and analyzed from the standpoint of legality, propriety, and efficiency so internal operational risk and inefficiencies are properly understood, working to prevent the occurrence of crises and improve operations. In addition, in the event of an unforeseen situation, the Audit and Supervisory Committee contributes to the formulation of appropriate management decisions by quickly reporting to the Audit and Supervisory Board with a report examining and analyzing the causal factors in an attempt to minimize losses to the company.

Related Principles of the Corporate Governance Code

Principle 4.13

Corporate Management Council
(Convened 24 times in the year ended March 31, 2016) Implementation

Supporting the Board of Directors' Decisions

The President and Executive Corporate Officers participate in the Corporate Management Meeting, which is held the day before a meeting of the Board of Directors. At the Corporate Management Meeting we ensure the fairness and transparency of the decision process with careful review of special items, items brought up to the Board of Directors and items delegated to executive corporate officers such as the President.

Board of Corporate Officers
(Convened 12 times in the year ended March 31, 2016) Implementation

Executing Operations Based on Clear Management Policy

In order to clarify monitoring and business operation functions, Capcom adopted the corporate officer system. The Board of Corporate Officers is convened once a month. At the Board of Corporate Officers, in addition to executing business based on Board of Directors' decisions, there are reports on policies for execution of business and the formulation of plans. Also, there are reports at the monthly meetings of the Board of Directors about the status of business execution by the Corporate Officers.

Affiliate Companies Implementation

Ensuring Effective Government through Close, Group-wide Collaboration

We have developed a group-wide internal controls framework through close communication and collaboration between parent company and subsidiaries based on monthly subsidiary board meetings and the "Management Regulations for Subsidiaries." Through this framework, we ensure that our operations are being undertaken properly so that corporate governance functions effectively.

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