sample

THE AUDIT & SUPERVISORY BOARD
MEMBERS:
A BRIEF INTRODUCTION

Japan Audit & Supervisory Board Members Association (JASBA)TABLE OF CONTENTS

1. Introduction
1-1 About the Audit & Supervisory Board Members
1-2 Self Introduction

2. Function and Responsibility
2-1 Illustration of a Company with an Audit & Supervisory Board Members
2-2 Three types of Audits
2-3 Powers, rights and obligations

3. Activities of the Audit & Supervisory Board Members
3-1 Activities of the Audit & Supervisory Board Members(Roles regarding misconduct and wrongdoing within the company)

11. Introduction
1-1 About the Audit & Supervisory Board Members• Appointed by shareholders and independent from theBoard of Directors.
• Each member is expected to perform his/her roles
individually.
• To audit and supervise the execution of duties bydirectors.
Duties of directors include monitoring subsidiaries.

Therefore the Audit & Supervisory Board Members areauthorized to see operations of subsidiaries.

• The Audit & Supervisory Board is a corporate bodyauthorized by laws of Japan.
21-2 Self Introduction
Existence of various types of Members enables supervision from different angles.

Photo

Photo

Full-time/Standing

Full-time/Standing

Photo

Photo
External/Outside

External/Outside

Full-time/Standing -one or more
•Spend main part of their working time to perform their duties as Members.
•Get information on the operation and affairs of the company.

External/Outside -half or more•Independent from the company's management.
•Neutral and fair assessment is expected.

32. Function and Responsibility
2-1 Illustration of a Company with an Audit & Supervisory Board Members
Shareholders=External/Outside
Appointment

Supervisory Function
Board of Directors(Attend/Advise)

Audit & Supervisory Board

Collaboration(Report)（※）Audit as a part ofSupervisory Function

Audit & Supervisory Board Members

Supervision
Report★AuditExecutiveDirectors andmanagement
officers

Management

Internal Auditors

AuditCollaboration（Details on Page 5）External Auditors(Accounting Auditors)★Review of reasonableness, fairness andindependence from the management on theaudit conducted by the External Auditors(Accounting Auditors).

4

2-2 Three Types of Audits

Audit and supervise theactivities of directors
management under theCompanies Act of Japan.

Audit & Supervisory Boardi.
ii.
iii.

Statutory body
Independence from directors
Appointed by shareholders

Collaboration
Audit the operations ofmanagement under thedirector's order.

Audit the financial
statements under theCompanies Act of Japan.

(Meeting/Planning/Hearing etc...)External Auditors(Accounting Auditors)

Internal Auditors※具体的な組織名を入れて下さい（任意）
i.
ii.
iii.

Non-statutory body
Under the direct control of themanagement
One of the company's departments※具体的な監査法人名を入れて下さい（任意）
i.
ii.
iii.

Statutory body
An outside professional bodyAppointed by shareholders

52-3 POWERS, RIGHTS AND OBLIGATIONS
Research & Investigation• to order officers and employees to report operations and affairs of the company.
• to investigate operations, financial status and affairs of the company/subsidiaries.

Actions on operation of the company• to attend and express their opinions at the meeting of the Board of Directors.
• to seek an injunction against an act by the directors if certain requirements are satisfied.

Actions on external auditors• to order the external/accounting auditors to submit final/interim report on their audit.
• to propose to the shareholders meeting on appointment of the external/accounting auditors.
• to consent to the directors on fee for the external/accounting auditors.

Reporting• to submit and explain their audit report at the shareholders meeting.
• to report the result to the shareholders meeting if any violation of laws/regulations/constituent
documents, or any material injustice of proposal/related materials of the shareholders meeting.

Legal action against Directors• to examine and judge the reasonableness of a request by a shareholder to take legal action against
a director or directors for their breach of duty of care and/or fiduciary duty to the company.
• if it's considered reasonable, to take legal action against them as a representative of the company.

6

3. ACTIVITIES OF THE AUDIT & SUPERVISORY BOARD MEMBERS
3-1 ACTIVITIES OF THE AUDIT & SUPERVISORY BOARD MEMBERS
Shareholders meeting

Activities according to the audit plan

• Attending important meetings• Hearing from directors, officers, employees• On-site survey at offices

Actions on operation ofthe company

Actions on
external auditors• Attending and expressing opinions at the• Communications with the external/accounting

meeting of the Board of Directors• Audit of annual reports & accounting

auditors and the internal auditors• Inspection of the important documents

Meeting of the Members

Research & Investigation

documents

Preparation of Audit Report
Shareholders meeting7

(ROLES REGARDING MISCONDUCT AND WRONGDOING WITHIN THE COMPANY)

Ordinary Activities
Audit in accordance with
Annual Audit Plan etc

Prevention ofmisconduct andwrongdoing• Attendance at meetings of the Board ofDirectors and identification of problems on theproposals and other documents submitted atthe meetings• On-site survey, inspection of constituent
documents and other important documents• Exchange of opinions with external auditors• Report to the shareholders result of audit

Minimization ofdamage to thecompany• Ensuring cooperation by third party experts(e.g. setting up of a committee forinvestigation in which they participate)• Advice at the meeting of the Board ofDirectors• Seeking an injunction against specificmisconduct and wrongdoing by the directors• Legal action against directors who have notexercised required duty of care or fiduciary
duty

Occurrence ofmisconduct andwrongdoing

Damage to thecompany

8