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Board of Directors
The Board of Directors meet regularly once a month and from time to time when deemed necessary to discuss and approve
important business matters such as investment and business restructuring, with the President as a chairman because the
position of the chairman of the Board of Director is vacant. Before submitting agendas to the Board, the Management
Conference comprising the President and Executive Directors discuss and improve the agenda in advance.
Conduct of operations based on the decisions of the Board of Directors and other committees is entrusted to Business
Unit General Managers, Sales Unit General Managers, R&D Unit General Managers and Directors and Executive Officers
heading Corporate Staff Groups. At the same time, to establish a functioning system of internal checks, clear organizational
authority and responsibilities have been laid down in the in-house regulations, along with appropriate operational
procedures.
In addition to receiving monthly reports on sales and earnings as well as financial position and other matters from the
director in charge of accounting, the Board of Directors receives reports about orders (received) and sales at each Business
Unit headed by a director, and oversees progress towards achievement of management targets and conduct of operations.
Audits by Corporate Auditors and Internal Audits
The Company receives three types of audits, namely corporate auditor audits, internal audits and accounting audits, to
ensure the legality and appropriateness of its business management. In the corporate auditor audits, five corporate auditors,
three of whom are Outside Corporate Auditors, inspect the performance of Board members in business execution, backed
by the Corporate Auditor support staff (Office of Corporate Auditors).
Corporate Auditors all attend important meetings of the Board of Directors, based on the brief they were assigned—
audit planning, policy-making and task allocation — by the Board of Corporate Auditors. They question the Board of
Directors, Internal Auditing Department and other offices on their performance of duties, and read through important
documents for approval. They also carry out regular visiting audits at major business premises. At the same time, they
receive audit reports from other Corporate Auditors and exchange needed information with the Accounting Auditors.
The Company has established the Internal Auditing Department as an auditing unit for internal audits. This Department
carries out audits at Sumitomo Electric‘s premises including Group companies and suggests improvements in problem areas
to ensure appropriate and efficient conduct of operations. In addition, the Corporate Auditors and Accounting Auditors
collaborate if needed in their audits.
Our Accounting Auditors and Internal Auditors are KPMG AZSA LLC.
Outside Director and Outside Corporate Auditors
Sumitomo Electric has one Outside Director and three Outside Corporate Auditors. The Company has appointed the Outside
Director to provide an external perspective and step up supervision at Board of Directors’ meetings and to increase the
transparency and objectivity of corporate management. Moreover, to strengthen the supervisory system to better ensure
legal and appropriate management, we have appointed Outside Corporate Auditors as over half of our Corporate Auditors,
ensuring a wider range of expertise and perspectives.
Although Sumitomo Electric has instituted no guidelines or policies on the independency of Outside Directors, we
believe that they must be independent from the Company to fully assume their roles. In this regard, we carefully examine
and assess their interests with the Company when selecting the candidates. All the incumbent Outside Directors were
appointed as the Independent Directors of the Company as they do not infringe on any of the evaluation standards
concerning the independence of independent directors stipulated by the Tokyo Stock Exchange. To date, they have delivered
valuable opinions and suggestions from an independent position to the Board of Directors at meetings and other occasions,
and were therefore judged there was no risk of a conflict of interests with ordinary shareholders.
Annual Report 2012
SUMITOMO ELECTRIC
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