J apan A udit & S upervisory
B oard Members A ssociation

Association Brochure

Brief Explanation of JASBAThe Japan Audit & Supervisory Board Members Association (“JASBA”) is a public-service organization
established in 1974. This was the year when Japan's Commercial Code(*) was revised so as to strengthen
the authority and independence of Audit & Supervisory Board Members.
(*) Laws governing companies used to be included in the Commercial Code. They became an independent act in2005 as a result of enactment of the Companies Act which came into effect in 2006.

In those years, there were several corporate scandals, even among major Japanese companies, in which
Directors were deeply involved. “Auditing” had become recognized in the Japanese business world as oneof the most important and effective means to prevent such kind of corporate scandals, and many
companies as well as academic circles strongly supported establishment of an organization helping Audit& Supervisory Board Members fulfill their expected roles and functions. As a result, JASBA wasestablished.
Since the establishment of JASBA, there has been a series of revisions to the related Codes and Acts,
which included introduction of the Audit Committee system. JASBA expanded its membership to Audit
Committee Members and other similar type of officers（collectively “Similar Type Members”）who audit
activities of an organization to which they belong. Currently the Association has about 5,900 members,either corporations or individuals, and about 7,700 individuals registered by them (“RegisteredIndividuals”). They are from both large and small companies throughout Japan in all kinds of industrial
sectors.

Our current main activities are:1) Provide Audit & Supervisory Board Members and other Similar Type Members with necessary
knowledge, auditing standards and related information.
2) Study and publish the most desirable auditing practices for various subjects.
3) Research the actual situation of corporate governance among Japanese companies.
4) Publish JASBA's views regarding improvement of corporate governance in Japan from the viewpoint ofAudit & Supervisory Board Members and other Similar Type Members.
5) Publish the Association's journal and other publications.
The business world has changed drastically in becoming globalized and the corporate governance system ofJapan is expected to change much more to reflect such changes in business practices. JASBA’s roles are
now more important for the sound development of the corporate governance system of Japan.
1What is JASBA?
Major Activities(1) Study, Recommendations and Research◦ To study the corporate governance system (including Audit & Supervisory Board Members system)and publish recommendations on its improvement on various occasions, such as at committees heldby MOJ, METI, FSA, JICPA and so on.
◦ To research the corporate governance system.

(2) Seminars◦ To host national conferences for its members twice a year. The program includes speech by amanagement executive and a panel discussion on a specific theme.
◦ To host seminars and lectures on various subjects such as law, accounting and risk management. InFY2013 (September 2012 to August 2013), JASBA hosted 245 seminars and had 70,707 attendants
in total.

(3) Working Group Activities◦ To organize working groups which are comprised of the Registered Individuals. The members ofeach working group make presentations respectively at the meetings of the working group based
upon their experience. After the presentation, they exchange their views and opinions. Through thisprocess, they can access the practices of other members, which enables them to enrich theirknowledge and skills.
◦ Each office has one or more working groups (Head Office has 17 working groups). They are formed
mainly on the basis of industry or size of the company.

(4) Consultation Services◦ To offer opportunities for the Registered Individuals to consult, either online or in person, with legal
experts on issues they have encountered through their ordinary activities.

(5) Information Services◦ To publish JASBA's monthly journal and provide related information through uploads to theJASBA’s official website.

(6) Support for Small and Medium Sized Enterprises◦ To support the Audit & Supervisory Board Members and Similar Type Members of small andmedium sized enterprises by hosting seminars and publishing materials.

(7) Support for Staff members of Audit & Supervisory Board Members andAudit Committees◦ To support the staff of Audit & Supervisory Board Members and Similar Type Members, by hostingseminars, publishing materials and organizing working groups similar to those of the members ofJASBA.

(8) Job Opportunity Services◦ To upload a list of current/ former Registered Individuals who desire to be listed there. The list serves
as a reference for parties who recruit Audit & Supervisory Board Members and officers charged withsupervisory functions.
2What is JASBA?
JASBA Member Composition(1) Number of JASBA Member
NUMBER
7000
6140 5976 5911
5829 5829 5796 5886

6000
4874

5000
3786

4000
3229
3000

2437
1839

2000
1000 858
01975

1136

1980 1985 1990 1995 2000

2005 2008 2009 2010 2011 2012 2013 2014
YEAR

(2) Corporate Membership Composition
Listed/ Unlisted

CapitalOthers, 100 (2%)

more than 50
billion yen,
305 (5%)from 10 billion yen tounder 50 billion yen,
851 (15%)others, 100 (2%)

under 500
million yen,
1448 (25%)

TSE 1st,1643 (28%)
Unlisted Companies,2991 (51%)
TSE 2nd,477 (8%)

from a billion yen tounder 5 billion yen,
1923 (33%)

OtherExchanges,
675 (11%)from 5 billion yen tounder 10 billion yen,
628 (11%)from 500 million yen tounder a billion yen,
631 (11%)(As of August 2014)3

Mission
Mission of Audit & Supervisory Board Members
We aim to contribute extensively to the sound and ongoing growth of corporations and society by
maintaining a fair and impartial stance in our role in upholding corporate governance*1.

Guidelines for Conduct of A&S Board Members(1) We meet the expectations of all stakeholders*2 by undertaking continuous education, cultivating a spiritof independence and self-discipline, and being trustworthy.
(2) We perform our daily activities as A&S Board Members with fairness and in good faith based on theprinciple of integrity*3, the precepts generally accepted in society and accurate information sourced
from our on-site visits.
(3) We strive to strengthen corporate governance by carrying out our duties as A&S Board Members in aprincipled and professional manner and by being accountable in all circumstances.

*1 “in our role in upholding corporate governance”
This phrase conveys that A&S Board Members bear key responsibility, alongside corporate management, forstrengthening corporate governance.

*2 “meet the expectations of all stakeholders”
This phrase conveys that A&S Board Members act for shareholders who have entrusted them withresponsibilities, and that A&S Board Members’ accommodation of the expectations of all stakeholders in a fairmanner leads in turn to increased benefit to shareholders.

*3 “based on the principle of integrity”
This phrase conveys the basic approach of A&S Board Members in carrying out their auditing activities. In otherwords, integrity underlies A&S Board Members’ quest to obtain sufficient and accurate information.
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Mission
Mission of the Japan Audit & Supervisory Board Members Association
We aim to contribute to the creation of an affluent global community*1 by:・raising the awareness of people both in and outside Japan about the reliability and value of Japan’s A&S
Board Members system*2 and・establishing an effective system of corporate governance by promoting knowledge about the role andmission of A&S Board Members and making A&S Board Members more conscious of their role andmission.

Initiatives of the Japan Audit & Supervisory Board Members Association(1) We research the roles and functions of A&S Board Members*3 and issue guidelines for conduct thatmeet the needs and expectations of society, so that A&S Board Members can fully discharge theirresponsibilities.
(2) We offer A&S Board Members opportunities to deepen and increase their knowledge andconsciousness of their role, so that they can assist corporations in performing their corporate social
responsibility commitments and contribute to strengthening corporate governance.
(3) We seek to propose the most effective form of corporate governance for Japan through broad dialogue
with society*4, in order to increase the value of the A&S Board Members system.
*1 “contribute to the creation of an affluent global community”

Now that the JASBA is a public interest incorporated association, it is even more strongly encouraged to develop
ties with society. This is also indicated in its new articles of incorporation. This phrase conveys that the JASBA,
as a member of society, will make appropriate contributions to Japanese society and also to the global community,in light of this new role expected of the JASBA.

*2 “raising the awareness of people both in and outside Japan, about the reliability
and value of Japan’s A&S Board Members system”

The functions of Japan’s A&S Board Members system have been reinforced by numerous revisions to laws andregulations applying to A&S Board Members. At the same time, the expectations of society underlying such legal
revisions have continued to increase. This phrase expresses the resolve of the JASBA to actively explain that theA&S Board Members system has earned great trust in terms of Japanese corporate practices and that the system
has a substantial and adequate function, and to raise people's awareness and understanding of the A&S Board
Members system, with a view to reaching the wider global community.

*3 “research the roles and functions of A&S Board Members”

Many aspects of the role of A&S Board Members are provided by law; however, the term “functions” refers to theactual impact that A&S Board Members have on society by carrying out their role. The JASBA shall researchwhat role A&S Board Members should play and consequently what functions A&S Board Members shouldperform.

*4 “through broad dialogue with society”

The JASBA shall proactively make recommendations and offer opinions on the most effective system of corporate
governance and the A&S Board Members system in Japan. Both in and outside Japan, the JASBA shall actively
explain and raise people's awareness of the reliability and value of A&S Board Members.
5What is an Audit & Supervisory Board Member?
Fundamental Role
Audit & Supervisory Board Members must be elected at a shareholders' meeting, and their role is to“audit” and “supervise” the activities of management.

Audit & Supervisory Board Members System
Shareholders＝externalAppointment
Supervisory Function
Board of Directors(to supervise the Directorsin charge of Management)

Collaboration(attend/report/advice)

Audit & Supervisory Board(Members)

Audit & Supervisory
Board Members
Audit as a part ofSupervisory Function

Directors

ExecutiveDirectors
andmanagement officers

Supervision

Management

ReportCollaboration

Audit(review of reasonableness,fairness and independence
from the management onthe audit conducted by theExternal Auditors)

Audit
Internal Auditors

External Auditors
6What is an Audit & Supervisory Board Member?
Powers, rights and obligations of the Audit & Supervisory Board Members(1) Research &Investigation

・Power to order officers and employees to report to them operations and affairs of the company.
・Power to investigate operations, financial status and affairs of the company.
・Power to investigate operations, financial status and affairs of subsidiaries.

(2) Actions on
operation ofthe company

・Obligation to attend and express their opinions at the meeting of the Board of Directors.
・Power to convene a meeting of the Board of Directors.
・Right to seek an injunction against an act by the Directors if certain requirements are satisfied.

(3) Actions on
externalauditors

・Power to order the external auditors to submit final/interim report on their audit.
・Right to consent to the Directors on submission to the shareholders meeting of their proposal on
appointment or removal of the external auditors.
・Right to consent to the Directors on fee for the external auditors.

(4) Reporting

・Obligation to submit their audit report and perform supplemental explanation at the annual shareholders
meeting.
・Obligation to investigate and report the result to the shareholders meeting if any violation of laws andregulations or constituent documents, or any material injustice is found in a proposal or its related materials
to be submitted to the shareholders meeting.

(5) Legal action
againstDirectors

・Obligation to examine and judge the reasonableness of a request by a shareholder to take legal action against
a Director or Directors for his/her (their) breach of duty of care and/or fiduciary duty to the company and if
such request is considered reasonable, to take legal action against them as a representative of the company.

Activities of the Audit & Supervisory Board Members(1) Hearing
from directors, officers andemployees

Meeting of the Members
・Preparation of Audit Report
・Preparation of Audit Plan
・Examination of materials to be submitted
to the meetings of the Board of Directors
・Report from full time/standing Memberson their activities
・Hearing from the external auditors on
their audit report(2) Communications
with the external auditors(3) Communications
with the internal auditors andtheir staff(4) On-site survey
at offices/factories etc of the company andits subsidiaries and affiliates(including overseas)(6) Inspectionof constituent documents andother important documents(7) Attending
and expressing opinions atthe meeting of the Boardof Directors(5) Communications
with the Members/Audit
Committee Members of subsidiaries
and affiliates7J apan A udit & S upervisory

B oard Members A ssociation

Kansai Chapter
1-4-16 Doujimahama
Kita-ku, Osaka-shi, Osaka 530-0004
Tel +81-6-6345-1631
Fax +81-6-6345-1649
Kyushu Chapter
8-10,Hakata-ekimae 3Chome
Hakata-ku, Fukuoka,812-0011
Tel +81-92-433-3627
Fax +81-92-433-3628

Headquarters
1-9-1 Marunouchi
Chiyoda-ku, Tokyo 100-0005
Tel +81-3-5219-6100

Chubu Chapter
2-1-1 Sakae
Naka-ku, Nagoya-shi, Aichi 460-0008
Tel +81-52-204-2131
Fax +81-52-204-2132

URL: https://www.kansa.or.jp/
EMAIL: kouhouka@kansa.or.jp

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