Corporate Governance Policy
Basic principles regarding GNI corporate governance policy
The guiding principles of GNI's corporate governance policy is to continually improve the long-term value of the corporation through the transparent and sound management of the business. It is the duty of the Board of Directors to serve as a prudent fiduciary for shareholders, ensuring management acts with integrity, honesty and transparency for the best interest of all stakeholders of the company.
Board Structure and Internal Controls
In June 2009, GNI adopted the "Company with Committees" business corporate structure. At the end of fiscal year 2014, GNI's Board of Directors consisted of seven directors, comprised of four outside directors and three internal directors (serving as executive officers of the company). The Board is served by three committees (nominating committee; remuneration committee; and audit committee), each of which holds at least three members, the majority of which are outside directors. Executive officers are restricted from serving on the audit committee.
Board of Directors
Under the "Company with Committees" corporate structure, the Company's Board of Directors meets quarterly. In addition, special meetings are held as necessary to decide on important issues of strategic or material nature, and for the timely oversight of business operations. GNI maintains a majority of outside directors on its Board, in order to ensure the Board's independence and provide key financial, management and medical expertise to management.
The Company's Articles of Incorporation provide the following stipulations concerning the Board of Directors: the total number of directors is limited at any one time to eight; the resolution to hold a meeting to appoint a director must be made by a majority of shareholders at the meeting; shareholders present at such meeting must represent at least one third of the total shareholders with voting rights; and any resolution of a meeting to appoint a director shall not be made by cumulative vote.
The Audit Committee meets at least quarterly as stipulated, but additional meetings are held as necessary and in practice the Committee meets frequently. At the end of fiscal 2014, the Audit Committee consisted of three outside directors who participate at all board meetings to monitor compliance and proceedings.As part of the Audit Committee's internal control function, it conducts systematic audits of all of the company's business units, reviewing all documents and files as necessary as part of its function.
Executive Committee Meeting
The Executive Committee is comprised of the three executive officer directors, plus the Assistant to the President. Meetings are held on a regular basis to make key decisions, facilitate the management of the business, discuss outstanding issues and monitor subsidiary operations. The executive officers are responsible for specific business units, with general managers in charge of daily operations of the units and subsidiaries reporting to the appropriate Executive Committee member.
Internal Control and Audit System
As directed and approval by the Board of Directors, GNI maintains an internal control system, to ensure the appropriate and compliant management of the company. Internal audits are performed by internal auditors appointed by the Board of Directors and under supervision of the Audit Committee. These audits ensure the Company compliance with regulations and laws, monitor the business performances of operation units, and help to prevent errors and frauds.
External Auditor and Third Party Advisors
As of fiscal 2014, GNI has engaged Ernst & Young ShinNihon LLC as the Company's external auditor in accordance with the Financial Instruments and Exchange Act. Any corrective actions or improvements suggested by the external auditor are promptly implemented by management. The Company will seek professional guidance from external sources such as attorneys, financial advisors or experts to assist and advise the Board of Directors and management.