Asian Corporate Governance Association(ACGA) visited
Conference SummaryOn September 8, 2010, members of the Asian Corporate Governance Association (ACGA) visited the Japan Corporate Auditors Association (JCAA) and they had a frank and open discussion with JCAA directors on the corporate governance of Japanese companies. A global organization consisting of investors and other relevant stakeholders from the United States, Europe, and Asia, ACGA actively conducts research and puts forward proposals on issues related to the corporate governance of listed companies.
Defining corporate governance as a system for enhancing the transparency and fairness or achieving corporate social responsibility including accountability to shareholders and other stakeholders, delegates from the ACGA said it is necessary for companies to have independent directors - those who can speak on par with top management officers - on their boards of directors. While acknowledging the importance of kansayaku (corporate auditors) as a provider of added value to companies, ACGA delegates made it clear that corporate auditors are no substitute for independent directors. Without the right to vote in the board and with the scope of their tasks limited, they said, corporate auditors cannot fulfill the roles expected of independent directors such as contributing to the development of global business strategies and the enhancement of risk management. At the same time, however, they said that mandating the appointment of independent directors is not intended to eliminate corporate auditors, noting that ACGA is in the view that independent directors and corporate auditors, by playing complementary roles to each other, should be able to enhance the competitiveness and development of their companies.
From
the side of JCAA, we explained that Japanese corporate auditors - being
obliged to establish and put in place a good corporate governance
system that will ensure the sound and continuous growth of the company
and accommodate society's trust - are actually engaged in various audit
tasks, rather than circumscribing the scope of responsibilities. More
specifically, we showed that corporate auditors actively express their
opinions at board of directors meetings and in other occasions, closely
communicate with the president and other managers on a daily basis,
and hence have a significant influence on company management.
Meanwhile, we expressed our concerns about the competence of
independent directors in reality. Specifically, we pointed out that
while independent directors must have sufficient knowledge and
understanding of the company for which they serve in order to be able
to fulfill their expected roles, the quality of being independent from
the company makes it difficult to understand and acquire sufficient
information about the company.We believe that the meeting, in which participants actively exchanged views, provided a good opportunity to deepen mutual understanding between Japanese corporate auditors and overseas investors. Through continuous exchanges, we would like to work toward the further cultivation and deepening of the mutual understanding.
