(“ANA” or “the Company”) comprises 16 directors, five corporate auditors, and 36 corporate executive officers (including those who are both directors and corporate executive officers). ANA’s Articles of Incorporation stipulate that the number of directors shall not exceed 20.
Based on its belief that a competitive management structure is indispensable in a severe operating environment, ANA appoints persons fully knowledgeable about the business and well-versed in management as directors, and posts personnel with abundant experience and highly specialized knowledge in the various divisions as corporate executive officers, who are given the authority to oversee divisional operations, to conduct functional and effective execution of management activities. In addition,
ANA has adopted an auditing system comprising the Board of Directors and corporate auditors, to supervise and audit the execution of duties by directors. Further, ANA has strengthened the supervisory functions of the Board of Directors through measures such as appointment of external directors and has enhanced the auditing capabilities of corporate auditors by appointing full-time external corporate auditors.
Under the Corporation Law of Japan, important issues must be considered by the Board of Directors, which makes the final decision on them. All directors including the two external directors and the five corporate auditors including the three external corporate auditors attend meetings of the Board of Directors, which are led by the chairman of the board.
For important administrative issues, the Management Committee, which is chaired by the president and includes directors who are also corporate executive officers, corporate auditors and others as members, makes drafts and proposals, and decides on specific management activities. In addition, the executive vice president of Operations & Airport Services chairs the Operations Committee, whichhandles structural issues related to ANA Group operations. Its perspective covers organization, cultivation of human assets, systems, regulations and authority in investigating and deciding on interdivisional solutions among the relevant Group airlines. The CSR Promotion Committee, the supreme decision making body
Based on its belief that a competitive management structure is indispensable in a severe operating environment, ANA appoints persons fully knowledgeable about the business and well-versed in management as directors, and posts personnel with abundant experience and highly specialized knowledge in the various divisions as corporate executive officers, who are given the authority to oversee divisional operations, to conduct functional and effective execution of management activities. In addition,
ANA has adopted an auditing system comprising the Board of Directors and corporate auditors, to supervise and audit the execution of duties by directors. Further, ANA has strengthened the supervisory functions of the Board of Directors through measures such as appointment of external directors and has enhanced the auditing capabilities of corporate auditors by appointing full-time external corporate auditors.
Under the Corporation Law of Japan, important issues must be considered by the Board of Directors, which makes the final decision on them. All directors including the two external directors and the five corporate auditors including the three external corporate auditors attend meetings of the Board of Directors, which are led by the chairman of the board.
For important administrative issues, the Management Committee, which is chaired by the president and includes directors who are also corporate executive officers, corporate auditors and others as members, makes drafts and proposals, and decides on specific management activities. In addition, the executive vice president of Operations & Airport Services chairs the Operations Committee, whichhandles structural issues related to ANA Group operations. Its perspective covers organization, cultivation of human assets, systems, regulations and authority in investigating and deciding on interdivisional solutions among the relevant Group airlines. The CSR Promotion Committee, the supreme decision making body
The Internal Audit Division conducts internal audits and reports directly to the president. It carries out operational audits, accounting audits and evaluations for ANA and ANA Group companies pursuant to the “Evaluation System for Internal Controls for Financial Reporting” under the Financial Instruments and Exchange Law of Japan. The Division conducts regularly scheduled audits according to the plan for the fiscal year and unscheduled audits at the will of senior management. Scheduled audits are conducted from an independent and objective standpoint based on risk analysis of ANA’s divisions and Group companies. In the fiscal year ended March 2012, the Internal Audit Division emphasized audits of theconsistency of departments’ action plans with the Group’s Mid-term Corporate Strategy, and the management of departments’ operations. Audits were conducted in about 20 locations, focused on headquarters, front-line departments and overseas workplaces. Auditing results are reported to the president each month and to the corporate auditors on a quarterly basis.Audits by corporate auditors are performed by the five corporate auditors, three of whom are external corporate auditors. Primarily conducted by a full-time external corporate auditor with a financial institution background, the audits are carried out by full-time corporate auditors well-versed in ANA’s internal operations and highly independent external corporate auditors.
Each corporate auditor conducts audits of operations at each office and surveys of subsidiaries, reporting the results to the Board ofCorporate Auditors and to the representative directors andsharing opinions on the results. The auditors share information and opinions with the Internal Audit Division and the independent auditors on a quarterly basis and work to enhance auditing. To support audits by corporate auditors, ANA established the Corporate Auditors Office, which reports directly to the corporate auditors, to enhance the audit structure in cooperation with the Internal Audit Division,
which reports directly to the president, and the independent auditors.
As for account auditing, Ernst & Young ShinNihon LLC audits the Company, its work sites, and its Group companies in accordance with the Corporation Law of Japan and the Financial Instruments and Exchange Law of Japan. Auditing results are reported to ANA’s management and to the Board of Corporate Auditors. There are 12 certified public accountants and 19 other staff members assisting with audit services.
Each corporate auditor conducts audits of operations at each office and surveys of subsidiaries, reporting the results to the Board ofCorporate Auditors and to the representative directors andsharing opinions on the results. The auditors share information and opinions with the Internal Audit Division and the independent auditors on a quarterly basis and work to enhance auditing. To support audits by corporate auditors, ANA established the Corporate Auditors Office, which reports directly to the corporate auditors, to enhance the audit structure in cooperation with the Internal Audit Division,
which reports directly to the president, and the independent auditors.As for account auditing, Ernst & Young ShinNihon LLC audits the Company, its work sites, and its Group companies in accordance with the Corporation Law of Japan and the Financial Instruments and Exchange Law of Japan. Auditing results are reported to ANA’s management and to the Board of Corporate Auditors. There are 12 certified public accountants and 19 other staff members assisting with audit services.
As part of corporate governance at ANA, the Company appoints external directors to receive appropriate advice about ANA’s management from an independent perspective, because the Company has judged that it would further strengthen the management structure. ANA has two external directors: Mr. Misao Kimura and Mr. Shosuke Mori. Their appointments have been based on the assessment that Mr. Kimura, as a manager within the transport industry, and Mr. Mori, as a manager of a business with a strong public interest, are able to use their managerial experience and broad insights to provide appropriate advice to the Company’s management from a third-party perspective, which would further strengthen its management structure.
Mr. Kimura serves as an adviser of Nagoya Railroad Co., Ltd. This company is a major ANA shareholder, but not a primary shareholder because it owns less than 5% of issued shares. Nagoya Railroad transacts business with the ANA Group including consignment sales of airline tickets, but is not a major ANA customer or supplier. Mr. Kimura therefore has no conflict of interest with common shareholders.
Mr. Mori is the chairman of the board of directors of The Kansai Electric Power Co., Inc. While the ANA Group has normal transactions with the company as a customer for electric power, there is no particular interest at stake. In their positions on the Board of Directors, both use their abundant experience and broad insights to make statements as they deem necessary. They also provide advice and exchange opinions with representative directors as needed outside of meetings of the Board of Directors.
Mr. Kimura serves as an adviser of Nagoya Railroad Co., Ltd. This company is a major ANA shareholder, but not a primary shareholder because it owns less than 5% of issued shares. Nagoya Railroad transacts business with the ANA Group including consignment sales of airline tickets, but is not a major ANA customer or supplier. Mr. Kimura therefore has no conflict of interest with common shareholders.
Mr. Mori is the chairman of the board of directors of The Kansai Electric Power Co., Inc. While the ANA Group has normal transactions with the company as a customer for electric power, there is no particular interest at stake. In their positions on the Board of Directors, both use their abundant experience and broad insights to make statements as they deem necessary. They also provide advice and exchange opinions with representative directors as needed outside of meetings of the Board of Directors.
ANA has three external corporate auditors: Mr. Sumihito Okawa, Mr. Shingo Matsuo and Mr. Tatsuo Kondo. Mr. Okawa assumed his position as full-time corporate auditor in June 2011. As Mr. Okawa served as the representative of a policy finance institution and Mr. Matsuo and Mr. Kondo are top executives of highly public businesses, the Company deemed that they would further enhance its auditing system by making use of their abundant experience and deep insight, and appointed them as external corporate auditors.
As a full-time corporate auditor, Mr. Okawa attends meetings of the Board of Directors, the Board of Auditors, the Management Committee and other regularlyscheduled meetings of officers, and conducts visiting audits of offices and divisions inside and outside the Company. In addition to attending meetings of the Board of Directors and the Board of Auditors, Mr. Matsuo and Mr. Kondo also exchange opinions with the representative directors as needed.There are no particular interests at stake between the ANA Group and Mr. Okawa, Mr. Matsuo, and Mr. Kondo. While the ANA Group, as a customer for electric power, has normal transactions with Kyushu Electric Power Co., Inc., for which Mr. Matsuo serves as adviser, and with Hokkaido Electric Power Co., Inc., for which Mr. Kondo serves as director and adviser, there is no particular interest at stake. As of the end of March 2012, the ANA Group has outstanding borrowings from Development Bank of Japan Inc. with which Mr. Okawa was formerly affiliated. However, this was due to the ANA Group's past receipt of emergency funding under the Support System for Emergency Response, etc., which the Group is repaying according to schedule.
As a full-time corporate auditor, Mr. Okawa attends meetings of the Board of Directors, the Board of Auditors, the Management Committee and other regularlyscheduled meetings of officers, and conducts visiting audits of offices and divisions inside and outside the Company. In addition to attending meetings of the Board of Directors and the Board of Auditors, Mr. Matsuo and Mr. Kondo also exchange opinions with the representative directors as needed.There are no particular interests at stake between the ANA Group and Mr. Okawa, Mr. Matsuo, and Mr. Kondo. While the ANA Group, as a customer for electric power, has normal transactions with Kyushu Electric Power Co., Inc., for which Mr. Matsuo serves as adviser, and with Hokkaido Electric Power Co., Inc., for which Mr. Kondo serves as director and adviser, there is no particular interest at stake. As of the end of March 2012, the ANA Group has outstanding borrowings from Development Bank of Japan Inc. with which Mr. Okawa was formerly affiliated. However, this was due to the ANA Group's past receipt of emergency funding under the Support System for Emergency Response, etc., which the Group is repaying according to schedule.
ANA has appointed five independent officers: Mr. Kimura and Mr. Mori, the external directors, and Mr. Okawa, Mr. Matsuo and Mr. Kondo, the external corporate auditors.
The basic policies used in determination of remuneration of a director of the Company are as follows.
Based on the above policies, in February 2011 the Company formed the Remuneration Advisory Committee, with external directors and outside experts comprising a majority of the members. The Committee commissioned a study of the remuneration levels at other companies to an external institution specializing in such research, and established ANA’s remuneration system and standards. The directors’remuneration system, which was introduced from August, 2011, newly set annual bonuses in addition to the existing fixed remuneration (monthly remuneration), thereby enhancing the connection with the Company’s performance. External directors receive fixed remuneration (monthly remuneration) only. Remuneration for a corporate auditor consists of fixed remuneration (monthly remuneration) determined by taking into consideration his/her function and the need to appoint and retain a capable person. The standards for remuneration were set based on other companies’ levels as researched by an external institution upon ANA’s request. The retirement allowance system was abolished in 2004.
- (i) Ensure transparency, fairness and objectivity of remuneration and establish a remuneration level worthy of his/her roles and responsibilities.
- (ii) Reinforce incentives for achieving management objectives by introducing performance-linked remuneration based on management strategies.
- (iii) Aim to establish a remuneration scheme that enables the Company to share profits with its shareholders by working to raise medium-to-long-term corporate value.
Based on the above policies, in February 2011 the Company formed the Remuneration Advisory Committee, with external directors and outside experts comprising a majority of the members. The Committee commissioned a study of the remuneration levels at other companies to an external institution specializing in such research, and established ANA’s remuneration system and standards. The directors’remuneration system, which was introduced from August, 2011, newly set annual bonuses in addition to the existing fixed remuneration (monthly remuneration), thereby enhancing the connection with the Company’s performance. External directors receive fixed remuneration (monthly remuneration) only. Remuneration for a corporate auditor consists of fixed remuneration (monthly remuneration) determined by taking into consideration his/her function and the need to appoint and retain a capable person. The standards for remuneration were set based on other companies’ levels as researched by an external institution upon ANA’s request. The retirement allowance system was abolished in 2004.