Corporate Governance

We are working to enhance corporate governance to ensure management transparency and achieve the optimal allocation of management resources in our multi-faceted business activities.

Basic Approach

The Citizen Group endeavors to improve corporate value and contribute to society through sustained activities in harmony with the local community and the global environment, under the corporate philosophy of "Contributing to and Striving to be Respected by the Citizens of the World." It is with this goal permanently in mind that we strive to reinforce corporate governance, in recognition of the importance of ensuring management transparency and effectively supervising management from various different angles.

We have also established a Nominating Committee and a Compensation Committee—consisting of outside directors and the representative director—as advisory boards.

Corporate Governance Structure of Citizen Holdings

Citizen Holdings Corporate Governance Structure

Roles of the Holding Company and the Subsidiaries

We have clarified the scope of responsibility and authority of Citizen Holdings and each of the subsidiaries that make up the Citizen Group. Citizen Holdings is responsible for developing management policies to optimize Group-wide management and to make effective use of resources to boost corporate value. Individual operating subsidiaries in turn operate independently based on the nature of their segments, in the interests of quick judgment and increased profitability. Operations within the framework of Citizen Holdings, in areas such as human resources, finance, R&D, intellectual property management and brand management, have been configured so as to ensure that operating subsidiaries' policies coincide with Group-wide policies.

Roles of the Directors and the Board of Directors

The Citizen Holdings Board of Directors consists of seven members (as on March 31, 2016), including two outside directors (registered as independent officers in accordance with systems operated by Tokyo Stock Exchange). The Board of Directors determines management policies and other important issnes for Citizen Holdings and the Citizen Group, and supervises the execution of directors' duties. The presidents of key operating subsidiaries are also appointed as part-time directors to enable decision-making from a comprehensive perspective, taking into account the views of individual companies. In addition, the management of the Group reflects the opinions of outside directors with abundant business experience in corporate management and related areas. We have also established the Nominating Committee and Compensation Committee - consisting of outside directors and the president - to provide advisory support.

Roles of the Auditors and the Audit & Supervisory Board

The Citizen Holdings Audit & Supervisory consists of three members, including two outside auditors (as of March 31, 2016). In addition to checking the execution of directors' duties in general through activities such as reviewing important documents, monitoring the company's operations and finances and attending meetings of the Board of Directors and other bodies, auditors are also responsible for auditing the implementation and management of internal control systems. The Citizen Group Full-Time Auditor Coordination Committee, which consists of full-time auditors from Citizen Holdings and Business Controlling Companies, is there to ensure that auditing capabilities are consistent between Citizen Holdings and Business Controlling Companies and makes every effort to share information regarding auditing policies on behalf of the Citizen Group as a whole.

Internal Control System

Having set out a basic policy on the establishment of internal control systems at Citizen Holdings, we are now working to further enhance our internal control systems.

To ensure proper and effective execution of the internal control system and reliable financial reporting, meetings are held with the participation of relevant personnel from Citizen Holdings and its consolidated subsidiaries. In collaboration with outside audit institutions, we work to constantly improve, operate and evaluate our internal control system.To cater to the diverse range of needs anticipated as part of the internal auditing process, the committee also coordinates with auditing offices at operating subsidiaries and internal auditing managers at key subsidiaries.