regarding inappropriate accounting of overseas sales ... · pendent investigation committee,...

Regarding Inappropriate Accounting of Overseas Sales Subsidiaries of Fuji Xerox Co., Ltd.With respect to inappropriate accounting conducted in the past by overseas sales subsidiaries of Fuji Xerox Co., Ltd. (“FX”), a consolidated subsidiary of FUJIFILM Holdings (“FH”), we deeply apologize to our shareholders, investors, customers and other stakeholders for any inconvenience and concerns caused. This section explains the revealed facts and recurrence-pre-vention measures to be taken by the Fujifilm Group.

Outline Background and Managerial Issues

As the background to the inappropriate accounting and

managerial issues, the Independent Investigation Commit-

tee indicated the following points:

Background to Inappropriate Accounting

• The system of incentives including bonus payments for the managing director and employees at FXNZ, based on the sales target achievement, led to contin-ue the inappropriate accounting practice, recording sales early.

• At FXNZ, there was a concentration of authority with the managing director of FXNZ, and supervision by the board of directors did not function effectively, re-sulting in the lack of transparency in the business management process.

• There were problems including an insufficient subsidi-ary management system at Fuji Xerox Asia Pacific Pte Ltd and the lack of control over the audit system and administration department at FX. (Accordingly, infor-mation was blocked in the process of reporting within FX and appropriate information on the actual situa-tion did not reach the Chairman and President of FX.)

• There were systemic deficiencies in FH monitoring of FX and its subsidiaries, the audit system of the audit department and the information sharing system. (Ac-cordingly, appropriate information on the situation was not reported by FX to FH.)

Managerial Issues

Issues to be addressed at FXNZ• Review of incentives emphasized on sales achieve-

ment• Improve the internal system to correct the reporting

line centralization

Issues to be addressed at FX• Strengthen the system of managing subsidiaries and

affiliates• Strengthen information sharing within FX and improve

transparency of the business management process• Strengthen the supervisory function of the board of

directors and the audit function of the audit & super-visory board members and the audit department

• Strengthen the checking function of the accounting department

• Improve awareness of compliance with laws and regu-lations

Issues to be addressed at FH• Strengthen the function of managing FX

It was identified as being necessary to review certain ac-

counting practices related to certain sales leasing transac-

tions in and prior to FY2016/3 at Fuji Xerox New Zealand

Ltd (“FXNZ”), an overseas sales subsidiary of FX. As an ini-

tial step, FH established an internal investigation commit-

tee to conduct investigations. Furthermore, to enhance the

objectivity of the investigations, we established the Inde-

pendent Investigation Committee, consisting of outside

experts that do not have any financial or other interests in

the Fujifilm Group in April 2017, to clarify all the facts.

In June 2017 the report from the Independent Investi-

gation Committee showed that in addition to FXNZ, Fuji

Xerox Australia Pty. Ltd. (“FXA”) also conduced inappropri-

ate accounting.

The accumulated impact of the inappropriate account-

ing on the “net“ income attributable to FUJIFILM Holdings

through FY2011/3 to FY2016/3 is a loss of ¥28.1 billion.

The results of the investigation by the Independent Investi-

gation committee also raised an issue with regard to FX’s

internal controls. Currently, FH is engaged in initiatives to

prevent recurrence and strengthen governance.

About the Inappropriate Accounting PracticeFXNZ had been selling equipment, by introducing Man-

aged Services Agreements (MSAs) that bundled together

equipment sales and maintenance services. Under MSAs,

sales equivalent to the price of the copying machines are

recorded as a single sale as a capital lease upon installation

of equipment during the first fiscal year, and following that,

the sales price is recovered as a copy service fee deter-

mined by multiplying the actual number of copies by the

copy unit price, which is set according to the monthly tar-

get volume.

In order to treat contracts as capital leases, they must

satisfy certain conditions including possibility of the recov-

ery of a minimum payment of lease fees. In the case of

FXNZ, however, all transactions, including those with con-

ditions that did not satisfy the capital lease conditions,

were recorded as capital leases. Consequently, there were

many transactions in which receivables could not be recov-

ered, and this became common practice. A similar account-

ing practice was also conducted at FXA.

Corporate Governance

24

FH has implemented personnel actions in response to the problem. Three directors, one senior vice president and one full-time corporate auditor at FX were subject to man-datory retirement, and one corporate vice president was demoted. Ten officers, namely the president, the other full-time corporate auditor, two corporate auditors at FX and the aforementioned six officers, had their compensation and bonuses reduced by 10-50% for three months. The chairman and president of FH also returned 10% of their compensation over the three-month period.

FH makes progress in strengthening of governance as following.

Strengthening of governance structure of FH

June 2017

Changes to governance structure of FH• Reducing the number of directors from 12 to nine for

greater operational flexibility, promoting active deliber-ation by the board of directors and making quicker management decisions

• Appointing a total of three outside directors to raise the ratio of outside directors on the board to 1/3 to en-sure the appropriateness of decision-making by incor-porating opinions from multiple perspectives

Strengthening of governance and the business management process of group companies

June 2017

Dispatching of management personnel from FH to FX• Dispatch seven officers including the chairman, deputy

president, executive vice president, and senior vice president from FH to FX

July 2017

Establishment of the FH Committee for Strengthening Governance• The committee, which is chaired by FH President, has

set up a comprehensive project system to implement through and continuous governance enhancement. Five projects are underway to address different themes.

We express our deepest regrets regarding inappropriate accounting by overseas sales subsidiaries of FX. Taking these findings seriously, we will make every possible effort to restore the trust of stakeholders under the new management structure with a stronger governance system.

July and August 2017

Strengthening and thorough reinforcement of compliance education• Conducted compliance re-education to directors of all

divisions of FH, Fujifilm Corporation (“FF“), and FX, and presidents of all subsidiaries

• Provide compliance re-education to all employees

August 2017

Establishment of the Subsidiaries• Establish the Administration Division to develop a

mechanism to ensure appropriate information provi-sion within the Fujifilm Group

September 2017

Integration of the financial accounting function• Integrate the accounting function of FF and FX with

the Accounting and Finance Division of FH to strength-en the business management process

• Establishment of the Global Audit Division• Establish the Global Audit Division to strengthen the

audit function through out the group

November 2017

Establishment of the whistleblowing system at FH• Set up the common whistleblowing system so that all

domestic and overseas employees of Fujifilm Group can report incidents directly to FH, to detect early and respond promptly to signs that lead to misconduct or violation of law at the companies and organizations

Main Measures Taken by FH in Response

Projects for enhancing management of group companiesProjects for enhancing accountingProjects for enhancing auditingProjects for enhancing complianceProjects for enhancing IT governance

FH Committee for Strengthening Governance


25

The Company aims to achieve sustainable growth and in-crease the corporate value of the Group while contributing to the sustainable development of society by conducting

sincere and fair business activities. The Company has posi-tioned corporate governance as an important management priority to achieve this aim.

Basic Policy of Corporate Governance

The Company has implemented such measures as appoint-ment and addition of outside Directors, revision of the pay-ment of remuneration to Directors and Audit & Supervisory Board Members, formulation of Corporate Governance Guidelines, and evaluation on the effectiveness of the

Board of Directors. In addition, it will promote group-wide measures to strengthen governance in response to the in-appropriate accounting in overseas subsidiaries of Fuji Xerox Co., Ltd. to further strengthen the corporate gover-nance system.

Activities for Strengthening Corporate Governance

Status of Corporate Governance

Past Activities

Year/month Activities for strengthening governance Purpose

FY2007/3

Transitioned to a holdings company structure To strengthen consolidated management of the Fujifilm Group

First appointment of outside Director

To properly supervise and audit performance of duties to en-sure transparency of the management, while promoting active discussion by asking for appropriate advice and necessary ex-planation at the Board of Directors meetings from an objective viewpoint

FY2008/3 Introduction of stock option system To make the Company’s Directors (excluding outside Directors) share the stockholders’ interest in the fluctuation of the stock price of shares of the Company and enhance their motivation and morale to contribute towards increasing the corporate val-ue of the Company

FY2010/3Abolition of retirement benefit program for Directors and Audit & Supervisory Board Members

FY2015/3 Increase in the number of outside Directors to two persons

To further strengthen proper supervision and audit of perfor-mance of duties, while promoting active discussion by asking for appropriate advice and necessary explanation at the Board of Directors meetings from an objective viewpoint

FY2016/3

Formulation of Corporate Governance Guidelines

To present the Company’s basic policy on corporate gover-nance from a wide range of perspectives to ensure account-ability to all stakeholders

Commencement of the evaluation of the ef-fectiveness of the Board of Directors To ensure the effectiveness of the Board of Directors

FY2018/3

Increase in the number of outside Directors to three persons, thereby raising the ratio of outside Directors on the Board of Directors to one-third

To further incorporate stakeholders’ perspectives and sense of value into the managementTo enhance transparency of decision-making of the Board of Directors with advice given based on their expertise and expe-rience


26

Corporate governance structure

The Company has positioned the Board of Directors as the organization for determining basic Group management poli-cies and strategies and other important matters relating to business execution as well as supervising the implementa-tion of business affairs. The Company’s Articles of Incorpora-tion stipulate that the Board can consist of up to 12 Direc-tors. Currently, the Board has nine Directors, including three outside Directors. The Board’s regular meetings are held in principle once a month, with extraordinary Board meetings held on an as-required basis. In addition, certain matters are determined on a flexible decision-making basis at the Board of Directors’ meetings by Directors with special authority. To better clarify their missions and responsibilities, the Compa-ny’s Directors are given a one-year term of office.

Details of the Company’s Organizational Structure

Directors and the Board of Directors

13

95 % (including outside Directors)*1

95 % (including outside Directors)*2

Number of Board of Directors meetings held (in FY2017/3)

Average attendance rate of Directors

Average attendance rate of Audit & Supervisory Board members

*1 Average attendance rate of each Director *2 Average attendance rate of each Audit & Supervisory Board member

Raise the ratio of outside Directors on the Board of Directors to one-third to strengthen governance

16

13

Previously From June 29, 2017 onward

Outside Director Outside Director

(As of June 29, 2016)

Corporate organization Company with an Audit & Supervisory Board

Number of Directors (number of outside Directors) 9 (3)

Number of outside Directors deemed to be independent*1 3

Directors’ term of office One year (the same term of office applies to outside Directors)

Incentive compensation to Directors Introduction of a stock option system geared toward in-house Directors

Number of Audit & Supervisory Board members (number of outside Audit & Supervisory Board members) 4 (2)

Number of independent officers*2 5

Adoption of an executive officer system Yes

Independent auditors KPMG AZSA LLC

Introduction of Countermeasures (Takeover Defense Measures) for Large-Scale Purchases of Company Shares None*3

*1 Compliance with the Company’s “Criteria for Independence of Outside Directors and Outside Audit & Supervisory Board Members” *2 Independent officers as stipulated by Tokyo Stock Exchange, Inc.*3 If the Company receives a proposal seeking to acquire a controlling interest, it will strive to help shareholders make a decision by proactively gathering information and

disclosing it in a timely manner, while taking appropriate measures within the scope permitted by relevant laws and regulations, such as the Companies Act and the Fi-nancial Instruments and Exchange Act, to increase corporate value and secure the common interests of shareholders.


27

13

98 % (including outside Directors)*

Number of Audit & Supervisory Board meetings held (in FY2017/3)

Average attendance rate of Audit & Supervisory Board members

* Average attendance rate of each Audit & Supervisory Board member

Executive Officer System

The Company has adopted an executive officer system to facilitate agile business execution. Executive officers carry out business affairs in accordance with the basic policies and strategies formulated by the Board of Directors. The Company currently has 13 executive officers, including six concurrently serving as Board members. The executive offi-cers have a one-year term of office, the same as the Com-pany’s Directors.

Management Council

The Management Council makes decisions on the submis-sion of matters to be exclusively deliberated by the Board of Directors. At the same time, the Council deliberates on the measures adopted by executive officers to implement particularly important initiatives in accordance with the ba-sic policies, plans, and strategies formulated by the Board of Directors.

Audit & Supervisory Board and Audit & Supervisory Board Members

The Company has adopted an audit and supervisory board system with an audit and supervisory board, which consists of four members, including two outside Audit & Superviso-ry Board members. Both of Outside Audit & Supervisory Board members, Hisayoshi Kobayakawa and Shiro Uchida are registered Certified Public Accountants and possess considerable knowledge about finance and accounting. As an independent organization with key roles and responsi-bilities in the Company’s corporate governance system to ensure transparent and fair decision making in the business as a whole, Audit & Supervisory Board members audit the entire scope of Directors’ performance of their duties fol-lowing audit policies and an audit plan in conformity with the Audit & Supervisory Board members’ audit standards determined by the Audit & Supervisory Board. At meetings of the Audit & Supervisory Board, which are held in princi-ple once a month, information on audit results is shared among Board members. In addition, all Audit & Superviso-ry Board members attend meetings of the Board of Direc-tors, while the full-time Audit & Supervisory Board members attend every Management Council meeting, reg-ularly exchange opinions with the representative Directors, and audit the entire range of business execution. With the aim of strengthening the audit functions of the Audit & Su-pervisory Board, the Company has established the Audit & Supervisory Board Office and currently appointed six personnel.

Internal Audits

The Company established a Global Internal Audit Division in September 2017, which currently comprises 56 person-nel, as an internal auditing unit that is independent from business operations. Integrating the internal auditing func-tion of the Group companies, the Company has established a global auditing system to strengthen the auditing func-tion of the entire group through enhancing the auditing ca-pability and efficiency by using IT. In addition, the division is in charge of assessing internal control over financial re-porting by the Company and its Group companies in re-sponse to the April 2008 application of the internal control reporting system in Japan. The Company compiles the outcome of the assessment in a “Management’s Report on Internal Control over Financial Reporting.” Moreover, des-ignated staff are appointed to operating companies and audits are conducted across a wide range of areas, includ-ing the environment, quality control, security, labor, export control, and issues relating to the Pharmaceutical Affairs Law of Japan.

Accounting Audits

The Company engages KPMG AZSA LLC as its indepen-dent auditors. KPMG AZSA LLC expresses an audit opinion on the Company’s financial statements from an indepen-dent standpoint.


28

Corporate governance structure of FUJIFILM Holdings Corporation and Internal Control System

Shareholders’ Meeting

Board of Directors

Business Execution

Chairman, Representative Director and CEO

Staff of Audit & Supervisory Board Members

FUJIFILM Corporation Fuji Xerox Co., Ltd. Toyama Chemical Co., Ltd.

President, RepresentativeDirector and COO

Management Council

Executive Officers Internal Audit

CSR Committee

M&A Investment Committee

Committee for Strengthening Governance

ITCorporatePlanning

SubsidiariesAdministration

PR / IR CSRLegalGeneral

AdministrationHR

Accountingand Finance

Audit &Supervisory Board

Independent Auditors· Determination of Group

management policies and strategies · Decisions on important matters

relating to business execution · Supervision of business execution


29

The Company ensures that the activities and behavior of its officers, and employees are in compliance with laws and regulations and social ethics. Specifically, the Company has formulated the “Fujifilm Group Charter for Corporate Be-havior” and the “Fujifilm Group Code of Conduct,” and es-tablished the CSR Committee and dedicated compliance divisions to maintain and improve compliance. In its approach to risk management, the Company builds appropriate risk management systems at all Group companies. Complementing these systems, in the case of

important risk matters, the CSR Committee conducts re-views and promotes basic policy development and appro-priate measures from a group-wide perspective. Moreover, the Company has established an internal control system based on the “Basic Policy on Establishing a Structure for an Internal Control System” decided by reso-lution of the Board of Directors. Each year, the Company checks the implementation status of the internal control system and reports the result to the Board of Directors.

Approach to Compliance, Risk Management, and Internal Control System

Overview of IR Activities At Fujifilm, top management is actively involved in IR activi-ties and works to strengthen the relationship of trust with shareholders and enhance IR activities. In addition, we are working to reduce the gap between intrinsic corporate value and market ratings by continuously expounding the Compa-ny’s management policy and utilizing management to assist the capital markets in forming their opinions. Specifically, in addition to the quarterly results briefings attended by senior management and executive officers, we actively provide points of contact, by joining IR conferences for the benefit of institutional investors in Japan and overseas, holding busi-ness briefings, and individual meetings. We are thereby working to further enhance communications with our share-holders. For the sake of overseas investors, we post English-lan-guage information in a timely manner on our website and are enhancing our global IR activities, such as through closer communication by establishing our IR bases in North Ameri-ca and Europe. For individual investors, we post content on the website that explains the Group’s businesses in an easily understood manner and hold Company briefings in major cities in Japan.

The Company conducts IR activities in accordance with the

“IR Information Disclosure Policy” can be viewed at the following URL.

http://www.fujifilmholdings.com/en/investors/ policies_and_systems/ir_policy/

Main IR activities (FY2017/3)

Activity Number of times

For institutional investors / analysts

Results briefings 4

Conferences hosted by securities companies 8

Business briefings and factory tours 7

Overseas IR road shows 5

For individual investors

Company briefings 25

Other

The Company discloses the number of individuals to whom remuneration is paid and the total amount of remuneration by Directors as well as Audit & Supervisory Board members. Remuneration and other important matters relating to Direc-tors as well as Audit & Supervisory Board members are de-termined by way of resolution at the Company’s annual general meeting of shareholders. In this manner, steps are taken to determine the total maximum amounts of compen-sation payable to Directors as well as Audit & Supervisory Board members. Remuneration (including bonuses) paid to each Director is determined by a resolution of the Board of Directors. Remuneration (including bonuses) paid to each Audit & Supervisory Board member is determined based on deliberations between Audit & Supervisory Board members. The basic remuneration of Directors as well as Audit & Su-pervisory Board members is paid as a fixed remuneration amount in accordance with individual duties and status, whether full or part time. Directors’ bonuses are determined in accordance with the Company’s business results and indi-vidual Director’s responsibilities and performance. The Company has introduced a stock option system in connection with the payment of remuneration to Directors (excluding outside Directors). The stock option system was introduced as an incentive to further motivate Directors to enhance corporate value. In determining the number of stock options allocated, consideration is given to each Di-rector’s position, responsibilities, authority, and other fac-tors and determined by the Board of Directors in accordance with established rule.

* The following items are also included in the aforementioned amounts of remuneration. 1. Bonuses paid for FY2017/3 Directors: ¥100 million paid to 11 Directors (¥3 million paid to two outside Directors) Audit & Supervisory Board members: ¥4 million paid to three Audit & Supervisory

Board members (¥1 million paid to one outside Audit & Supervisory Board member) 2. Amount of remuneration paid by way of stock options Directors: ¥371 million paid to 10 Directors 3. Number of Directors receiving compensation Includes two Directors who resigned during FY2017/3 4. Number of Audit & Supervisory Board members receiving compensation Includes two Audit & Supervisory Board members who resigned during FY2017/3, ex-

cluding one Audit & Supervisory Board member with no compensation.

Remuneration to Directors and Audit & Supervisory Board Members

Subject of Remuneration Number of People

Remuneration Amount

Directors 14 ¥799 million(Outside Directors) (2) (¥19 million)

Audit & Supervisory Board members 5 ¥55 million(Outside Audit & Supervisory Board members) (2) (¥11 million)

Total 19 ¥854 million(Outside Directors, Audit & Supervisory Board members) (4) (¥31 million)

Amount of remuneration paid to Directors and Audit & Supervisory Board members* (For FY2017/3)


30

Reasons for selecting outside Directors and outside Audit & Supervisory Board members

Outside Directors*1Outside Audit & Supervisory Board Members*1

Reasons for SelectionMr. Kobayakawa has ample experience and a wide range of knowledge as a certified public accountant. The Company deems he appropriately executes his duties as an outside Audit & Supervisory Board member from an objective viewpoint based on such experience and knowledge.

Attendance

Meetings of Board of Directors 13 / 13 Meetings of Audit &

Supervisory Board 13 / 13

Hisayoshi Kobayakawa

Reasons for Selection

Mr. Uchida has ample experience and a wide range of knowl-edge as both a certified public accountant and as a corporate manager. The Company deems he appropriately executes his duties as an outside Audit & Supervisory Board member from an objective viewpoint based on such experience and knowledge.

Attendance

Meetings of Board of Directors 8 / 10*2 Meetings of Audit &

Supervisory Board 9 / 10*2

Shiro Uchida

*1 For a brief history of each outside Director and outside Audit & Supervisory Board member, please see page 32 (Management Structure).

*2 Applicable to the Board of Directors meetings and Audit & Supervisory Board meetings held after the election on June 29, 2016.

Reasons for SelectionMr. Kawada has served as representative director of a general textile manufacturer for many years. With his strong leadership, he has achieved transformation of the company’s business mod-el, creation of innovation, and organizational reform. The Com-pany deems that he is capable of executing the duties expected of an outside director in an appropriate and sufficient manner by utilizing his ample experience and wide range of knowledge as a corporate executive to give suggestions and advice on many aspects of the Company’s management.

Tatsuo Kawada Newly elected

Reasons for SelectionMr. Kaiami has served in important positions such as Presiding Justice of the Division of Tokyo High Court and President of To-kyo District Court, and has ample experience and wide range of knowledge accumulated over his many years as a judge. The Company deems that he is capable of executing the duties ex-pected of an outside director in an appropriate and sufficient manner by utilizing this experience and knowledge to give sug-gestions and advice on many aspects of the Company’s man-agement, including from the perspective of compliance and internal control.

Makoto Kaiami Newly elected

Reasons for SelectionMr. Kitamura has served as representative director of financial institutions for many years, demonstrating strong leadership. He has ample experience and wide range of knowledge in the fields of loans, finance, and capital markets. The Company deems that he is capable of executing the duties expected of an outside director in an appropriate and sufficient manner by uti-lizing this experience and knowledge to give suggestions and advice on many aspects of the Company’s management.

Kunitaro Kitamura Newly elected


31


Director (Outside)

Tatsuo Kawada

1987 President of SEIREN CO., LTD.2011 Chairman and President of SEIREN CO.,

LTD.2014 Chairman and CEO of SEIREN CO., LTD. (to

present)2017 Director of the Company (to present)

Significant Concurrent Positions • Chairman and CEO of SEIREN CO., LTD.• Outside Director of Hokuriku Electric Power

Company• Member of the Board (external) of Daikin

Industries, Ltd.• Director serving as Audit and Supervisory

Committee member of Hokuhoku Financial Group, Inc.

Director (Outside)

Makoto Kaiami

1978 Assistant Judge of Tokyo District Court2000 Presiding Justice of the Division of Tokyo

District Court2007 Associate Vice-Minister of Justice in charge

of Litigation Affairs, Minister’s Secretariat of Ministry of Justice

2009 Judge of Tokyo High Court President of Wakayama District and Family Court2011 President of Nagano District and Family Court2012 Presiding Justice of the Division of Tokyo

High Court2014 President of Tokyo Family Court2015 President of Tokyo District Court2016 Retired office at mandatory retirement age2017 Registered as Attorney at Law (to present) Joined Sophiacity Law Office as Of counsel (to present) Director of the Company (to present)

Significant Concurrent Positions • Of counsel of Sophiacity Law Office

Director (Outside)

Kunitaro Kitamura

2011 Representative Director and Deputy President of Sumitomo Mitsui Trust Holdings, Inc.

Representative Director and Deputy President of The Chuo Mitsui Trust and Banking Company, Limited (current Sumitomo Mitsui Trust Bank, Limited)

2012 Representative Director and President of Sumitomo Mitsui Trust Holdings, Inc.

Chairman (Representative Director) of Sumitomo Mitsui Trust Bank, Limited

2017 Director of Sumitomo Mitsui Trust Holdings, Inc. (to present)

Chairman (Director) of Sumitomo Mitsui Trust Bank, Limited (to present)

Director of the Company (to present)

Significant Concurrent Positions • Director of Sumitomo Mitsui Trust Holdings, Inc. • Chairman (Director) of Sumitomo Mitsui Trust

Bank, Limited

Director

Masaru Yoshizawa

1980 Joined the Company 2014 Corporate Vice President of the Company (to

present) 2016 Director of the Company (to present) Director of FUJIFILM Corporation

Significant Concurrent Positions • Director & Executive Vice President of Fuji Xerox

Co., Ltd.

Director

Norio Shibata

1980 Joined the Company 2014 Director of FUJIFILM Corporation (to present)2016 Corporate Vice President of the Company (to

present) Director & Senior Vice President of FUJIFILM

Corporation (to present)

Significant Concurrent Positions • Director & Senior Vice President of FUJIFILM

Corporation

Board of Directors

* Fuji Photo Film Co., Ltd., was renamed FUJIFILM Holdings Corporation in October 2006. The operating company FUJIFILM Corporation took over the businesses of Fuji Photo Film Co., Ltd.

(As of September 30, 2017)

Management Structure

Chairman, Representative Director & CEO

Shigetaka Komori

1963 Joined the Company 2000 President, Representative Director of the

Company 2006 CEO of the Company (to present) 2012 Chairman, Representative Director & CEO of

the Company (to present) Chairman, Representative Director & CEO of

FUJIFILM Corporation (to present)

Significant Concurrent Positions • Chairman, Representative Director & CEO of

FUJIFILM Corporation • Chairman, Representative Director of Fuji Xerox

Co., Ltd.

President, Representative Director & COO

Kenji Sukeno

1977 Joined the Company 2012 Corporate Vice President of the Company Director of FUJIFILM Corporation 2013 Director of the Company 2015 Director & Senior Vice President of FUJIFILM

Corporation 2016 President, Representative Director & COO of

the Company (to present) President, Representative Director & COO of


Significant Concurrent Positions • President, Representative Director & COO of

FUJIFILM Corporation • Director of Fuji Xerox Co., Ltd.• Chairman, Director of Toyama Chemical Co., Ltd.

Director & Chief Technical Officer (CTO)

Yuzo Toda

1973 Joined the Company 2008 Director of FUJIFILM Corporation2009 Director of the Company (to present) 2015 Executive Vice President of FUJIFILM

Corporation 2016 Corporate Vice President of the Company (to

present) Director & Vice President, CTO of FUJIFILM

Corporation (to present) 2017 Director of Anicom Holdings, Inc. (to

present)

Significant Concurrent Positions • Director & Vice President, CTO of FUJIFILM

Corporation • Director of Anicom Holdings, Inc.

Director & Chief Innovation Officer (CIO)

Kouichi Tamai

2003 Joined the Company 2006 Corporate Vice President of the Company (to

present) 2008 Director of FUJIFILM Corporation2010 Director of the Company (to present) 2013 Executive Vice President of FUJIFILM

Corporation 2016 Director & Vice President, CIO of FUJIFILM

Corporation (to present)

Significant Concurrent Positions • Director & Vice President, CIO of FUJIFILM

Corporation • Deputy President, Representative Director of Fuji

Xerox Co., Ltd.

32


Audit & Supervisory Board Member

Kazuya Mishima

1978 Joined the Company 2009 General Manager of Legal Group of

Corporate Planning Division of the Company General Manager of Legal Department of

FUJIFILM Corporation 2012 Corporate Vice President of the Company Corporate Vice President of FUJIFILM Corporation 2014 Director & Senior Executive Officer of

FUJIFILM Business Expert Corporation2015 President & Representative Director of

FUJIFILM Business Expert Corporation2017 Audit & Supervisory Board Member of the Company (to present) Audit & Supervisory Board Member of


Significant Concurrent Positions • Audit & Supervisory Board Member of FUJIFILM Corporation• Audit & Supervisory Board Member of Toyama Chemical Co., Ltd.

Audit & Supervisory Board Member

Mamoru Matsushita

1980 Joined the Company 2008 Managing Director of FUJIFILM UK Ltd. 2012 General Manager of Secretary Office of the

Company General Manager of Secretary Office of

FUJIFILM Corporation 2013 President of FUJIFILM Italia S.p.A. 2016 Audit & Supervisory Board Member of the

Company (to present) Audit & Supervisory Board Member of


Significant Concurrent Positions • Audit & Supervisory Board Member of FUJIFILM

Corporation

Audit & Supervisory Board Member (Outside)

Hisayoshi Kobayakawa

1968 Registered as Certified Public Accountant (to present)

1996 Senior Partner of Price Waterhouse (currently PricewaterhouseCoopers Co., Ltd.)

Executive Representative Partner of Aoyama Audit Corporation

2000 Audit & Supervisory Board Member of General Sekiyu K.K. (currently TonenGeneral Sekiyu K.K.)

Full-time Audit & Supervisory Board Member of TonenGeneral Sekiyu K.K.

2007 Audit& Supervisory Board Member of TonenGeneral Sekiyu K.K. Full-time Audit & Supervisory Board Member of TonenGeneral Sekiyu K.K.

2014 Substitute Audit & Supervisory Board Member of the Company

2015 Audit & Supervisory Board Member of the Company (to present)

Audit & Supervisory Board Member (Outside)

Shiro Uchida

1986 Registered as Certified Public Accountant (to present)

2010 CEO of PricewaterhouseCoopers Co., Ltd. 2012 Chairman of PricewaterhouseCoopers Co.,

Ltd. 2015 Chairman, Representative Director of SAP

Japan Co., Ltd. (to present) 2016 Audit& Supervisory Board Member of the

Company (to present)

Significant Concurrent Positions • Chairman, Representative Director of SAP Japan

Co., Ltd. • Outside Director of Nihon Trim Co., Ltd.

Audit & Supervisory Board Members

Executive Officers

Chairman and CEO Shigetaka Komori

President and COO Kenji Sukeno

Corporate Vice President and CIO Kouichi Tamai

Corporate Vice President and CTO Yuzo Toda

Corporate Vice President Norio Shibata

Corporate Vice President Masaru Yoshizawa

Corporate Vice President Hiroshi Kurihara

Corporate Vice President Shigenobu Inenaga

Corporate Vice President Masato Yamamoto

Corporate Vice President Shigeru Sano

Corporate Vice President Masahiro Fukuoka

Corporate Vice President and CDO* Akira Yoda

Corporate Vice President Chisato Yoshizawa

*Chief Digital Officer

33

Message from Outside Directors

management from a different viewpoint from inside direc-tors’ and contribute to enhancing the corporate value of the Fujifilm Group by raising issues and giving advice. Ef-fective this fiscal year, the Board is comprised of three out-side Directors, which, I believe, raises expectation for active exchange of opinions based on broader knowledge. By uti-lizing my experience in corporate management I will also contribute to achieving growth of the Fujifilm Group, where every employee has a dream, thereby which can provide society with dreams.

SEIREN CO., LTD., where I currently serve as Chairman and CEO, has supplied Fujifilm with shielding components for photographic film, what it calls teremp (shielding cloth) for film cartridges, which was developed about 30 years ago. With the declining demand for photographic film, the Company’s business with SEIREN is shrinking substantially. However, this appointment as the Company’s outside Di-rector makes me keenly aware of my 30-year relationship with the Fujifilm Group. The Fujifilm Group, a creator of innovative products and services in a wide variety of fields, continues to create value with the use of leading-edge, original technologies, which are undoubtedly its core competence, generating strength that is not seen in other companies. Moreover, strong leadership of the management has been a driving force to build togetherness and forward momentum with the Group’s employees, and achieve innovation in acting on their own to reform the Company. The Fujifilm Group presently has 93 domestic compa-nies and 184 overseas companies as a global company group. As the Fujifilm Group continues to grow up, how Fujifilm will strengthen governance, while drawing on the strength of each company—this will become a more im-portant issue in the future management. Outside directors play a role in supervising the

I worked as a judge for 38 and a half years until I retired from the post of Director General of the Tokyo District Court in October 2016. I have been working as a lawyer since February 2017. Although I have never been involved with corporate management, I am committed to fulfilling my roles and the expectations placed on outside Directors by drawing on my experience as a legal expert. Today, corporations are facing the big challenge of not only improving corporate value in pursuit of a greater busi-ness scale and larger profit, but creating social value that contributes to the world. The Fujifilm Group has been cre-ating new value through innovation in various lives and in-dustrial fields, thereby contributing to society. The Fujifilm Group’s achievement in the medical field to support peo-ple’s health is one of the major accomplishments.

Contribute to growing the business and strengthening governance from the perspective of corporate manager

Three outside Directors, who have been newly elected for FY2018/3,

express their resolutions on the appointment as the Company’s Directors.

Seeing my role as a member of the Group by utilizing my experience as a legal expert

Tatsuo KawadaDirector (Outside)

• Chairman and CEO of SEIREN CO., LTD.

• Outside Director of Hokuriku Electric Power Company

• Member of the Board (external) of Daikin Industries, Ltd.

• Director serving as Audit and Supervisory Committee member of Hokuhoku Financial Group, Inc.

Makoto KaiamiDirector (Outside)

• Of counsel of Sophiacity Law Office


34

In terms of compliance that is to be observed as a public institution of society, such issues as inappropriate ac-counting at overseas sales subsidiaries of Fuji Xerox and deficiencies in internal control were found. This finding cre-ates the need to review group-wide operations to improve and strengthen the governance system and fully ensure our members are aware about compliance. I feel that Board of Directors of FUJIFILM Holdings Corporation discusses matters in an open and active man-ner, showing the Company’s willingness to positively receive opinions from outside parties. I see it as my role to raise is-sues and give proper advice to the Board of Directors

My 40-year service in Sumitomo Mitsui Trust Bank gave me opportunities to meet various corporations from the posi-tion of a �nancial institution. Among them, I have never found a case like that of the Fujifilm Group. Although the Company once faced the situation where its mainstay prod-ucts were at risk, it overcame the difficult period and later developed businesses even greater than before. I believe that this is because Fuji�lm Group tackled the challenge of restructuring and reform through concert-ed efforts with the management and employees, realizing its vision through actions full of esprit and vitality. It could not have been achieved without the management’s lead-ership and strong will that each employee had developed voluntarily and independently, with ideas such as “we will do it” and “we want to change like this.” This is very proof of the open, fair, and clear corporate culture of the Fujifilm Group, which has been a source of creation of value from innovation. Corporation management is prone to peer pressure even though discussions are made freely and audaciously. This unconscious vulnerability should be mitigated through proper supervision and advice from the viewpoint of exter-nal parties such as outside directors to ensure management transparency, thereby leading to stronger governance. Every business of the Fujifilm Group supports the in-dustrial community by providing cutting-edge, proprietary

based on my knowledge and experience relating to law, from a position where I can check the management with outside viewpoints, especially as a legal professional. In order for corporations to achieve sound growth, the important point is that each and every employee works passionately and enthusiastically, being aware that their work has been useful for society. The Fujifilm Group pos-sesses such positive corporate culture, enriching soil for value creation. I am committed to ful�lling my role as a member of the Fuji�lm Group with the aim of building a company that will achieve sustainable development with society.

technologies and enriches people’s lives. When employees truly feel that business growth and development are direct-ly linked with contributions to society, they will find their ef-forts very rewarding, thereby generating higher motivation. Recently, financial institutions have been expected to fulfill responsibilities to meet consumer needs with a high sense of ethics under the concept of “fiduciary duty.” I be-lieve that such truly customer-oriented viewpoint is also ap-plied to non-financial institutions. I will give my support in corporate management with the consciousness of such viewpoint.

Providing support in corporate management through supervision and advice given based on the experience and knowledge accumulated in a financial institution

Kunitaro KitamuraDirector (Outside)

• Director of Sumitomo Mitsui Trust Holdings, Inc.

• Chairman of Sumitomo Mitsui Trust Bank, Limited


35

regarding inappropriate accounting of overseas sales ... · pendent investigation committee,...

Documents