Audit & Supervisory Board (KANSAYAKU-KAI) (Audit & Supervisory Board Members (KANSAYAKU))
NEC has appointed Audit & Supervisory Board Members (KANSAYAKU) ("A&SBMs") and established the Audit & Supervisory Board (KANSAYAKU-KAI) ("A&SB") pursuant to the Companies Act of Japan. NEC has 5 A&SBMs, 3 of whom are Outside A&SBMs.
Furthermore, the A&SB holds regular meetings basically once a month and extraordinary meetings as necessary, decides on audit policies, standards, annual auditing plan and other matters, and receives status reports on audits and on other matters from each A&SBMs.
Nomination policy for Outside Audit & Supervisory Board Members (KANSAYAKU) ("A&SBMs")
NEC appoints Outside A&SBMs in order to ensure that audits are conducted from a neutral and objective perspective. In appointing Outside A&SBMs, NEC considers that they have superior character, discernment and high ethical standards. In addition, they would sympathize with the NEC Group Corporate Philosophy and act with strong will to realize the Philosophy and they have their experience and insight necessary for audits. In addition, NEC appoints as A&SBMs the personnel who have the knowledge and experience necessary for audits, such as considerable expertise in finance and accounting or experience as an attorney at law, and strengthen the auditing functions of the A&SBMs. The A&SBMs who have considerable expertise in finance and accounting are as follows:
Years of experience in accounting and experience as former General Manager of the Corporate Finance Division
Extensive auditing experience as a Certified Public Accountant for many years
The A&SBMs strive to enhance quality of the audits of the entire NEC Group by cooperating with A&SBMs of NEC's subsidiaries.
The A&SBMs are taking steps to strengthen cooperation with the internal auditing division. These steps include receiving reports and exchanging opinions with the internal auditing division on audit results regularly or as necessary, as well as receiving reports from the same division on the status of operation of the "Compliance Hotline" (including the status of operation of compliance hotlines of the NEC's subsidiaries), a compliance hotline for employees and contractors to report issues concerning possible breaches of corporate ethics, compliance and other similar matters. In addition, the A&SBMs cooperate with the Outside Directors, mainly by exchanging opinions on audits. The A&SBMs are also stepping up cooperation with the accounting auditors, such as by receiving briefings on financial audits covering status reports on their audits and audit plans, as well as on audits of the internal control systems based on the Financial Instruments and Exchange Act, and exchanging opinions on their audits. The Company arranges regular meetings among the Accounting Auditors, A&SBMs and the internal auditing division.
NEC has established the Audit and Supervisory Board Members' Office with 5 corporate staff members to assist with the A&SBMs' audit activities.