Corporate GovernanceOur basic policy on corporate governance
JASDEC fully recognizes its social obligation as the central body for the provision of the infrastructure
for securities clearing and settlement, which is an important base of the capital markets. Accordingly,
JASDEC has determined a basic management policy of providing a highly secure, convenientand efficient service. To this end, we ensure that our system meets the needs of users, including
investors, issuing companies and market intermediaries. We also make sure that our activities promote
corporate transparency and that our business operates with fairness and accountability, in line withthe public needs of our function. Our commitment to corporate governance is to earn and maintaina solid reputation for reliability as the central organization responsible for creating and operating theinfrastructure for securities clearing and settlement in Japan.

12Annual Report 2014

Overview of JASDEC’s management structure and corporate governance framework

General Shareholders’ Meeting

Business Operations Committee

Appointments/Dismissals

Appointments/
Dismissals

Appointments/
Dismissals

Subcommittees
Auditing

Audit & Supervisory Board

Board of Directors(Three including one Audit &Supervisory Board Member
serving on a full-time basis)
Reporting

Auditing(Five full-time, fourteen external)
Opinions, reports

Auditing

Appointment/Supervision

Audit & Supervisory
Board Member’s Office

Accounting auditors

Consultation

President & CEO

Integrated Risk
Management
CouncilMonitoring

Stock
Bond with share option
ETF
Foreign stock
Corporate bondCP
Investment trust
PSMS (Domestic Trade)
PSMS (Non-Residents’ Trade)ISO 20022

Internal Audit
OfficeConveying
information

Internalaudit
AdviceDepartments

Advisory Committee

Overview of implementation of corporate governance practices
Framework for management structure and corporate governance to exercise business judgments,manage operations and implement audits.
Corporate Structure• Board of Directors

work closely with Board Members and conduct regular

The Board of Directors is composed of 19 members,

exchanges of opinions, including through meetings withand is basically structured to achieve a balanced

the representative directors.

approach to business with user-oriented views, as well
• Business Operations Committee

neutrality and fairness. To fully reflect the opinions

Separately from the Board of Directors and theof users in our operations, nine of the 14 externalAudit & Supervisory Board, JASDEC has set up

directors are selected from JASDEC participants. The

the Business Operational Committee to fully reflectremaining five external directors come from an issuingthe needs of system users in our operations. The

company and a related organization, or from theCommittee examines important issues related toJapan Securities Dealers’ Association, academia andthe business of JASDEC, based on queries from thethe legal profession, enabling the Board to conduct

Board of Directors, and has ten subcommittees undervigorous discussions from a broad perspective

its control. Each subcommittee is responsible for ain consideration of the public good. In principle,

specific segment of operations, and is composed

the Board meets once a month to decide basicof members who are actually involved in the field.

management policies and discuss other key issues.

JASDEC applies the opinions provided by eachsubcommittee to various operational issues. JASDEC• Audit & Supervisory Board

discloses summaries of discussions and other

JASDEC employs the Audit & Supervisory Board

information by the committees to relevant parties forsystem for corporate governance instead of thegreater operational transparency.

committee system, as provided for in the Companies
Act. The Audit & Supervisory Board is made up of three

As the provider of key infrastructure elements for

Audit & Supervisory Board Members, two of whom are

the securities market, we are required to operate theselected from eligible participants (one each from asystem with an extremely high level of fairness andsecurities company and a bank) and all three (includingaccountability. To achieve this end, we have establishedan Audit & Supervisory Board Member who is serving

the Advisory Committee, which is composed of experts

on a full-time basis) are external Audit & Supervisory

in financial and securities systems. The committee

Board Members. In principle, the Audit & Supervisoryadvises JASDEC’s president from a broad perspective

Board holds a regular meeting each month. In line with

about wide-ranging issues relating to securities clearing

auditing plans and the basic policies established byand settlement system operations.

the Audit & Supervisory Board, Audit & Supervisory
Board Members audit the performance of the Board

JASDEC DVP Clearing Corporation (JDCC), JASDEC’s

Members by attending important meetings, including

wholly owned subsidiary, operates in accordance

those of the Board of Directors and assessing thewith a business philosophy similar to that of JASDEC.

status of operations and assets. To ensure that audits

JDCC has also set up a committee for reviewing

are effective, Audit & Supervisory Board Members

important issues regarding DVP operations to reflect

13
Annual Report 2014as business-oriented ideas on maintaining operational

Corporate Governancethe needs of users of the DVP settlement system

Directors and monitor its members’ execution offor non-exchange transaction deliveries (NETDs).

their duties. They also assess the legality of businessIn addition, JASDEC’s Board of Directors receives

operations by reviewing reports on auditing activities

reports regarding issues decided by JDCC’s Board offrom the Standing Audit & Supervisory Board Member.

Directors to ensure consistency in the activities of theJASDEC assigns staff specifically to assist Audit &two companies.
An outline of JASDEC’s management structure andSupervisory Board Members in their audits.
Audit & Supervisory Board Members perform

corporate governance systems is presented on theaudits in close cooperation with the Company’s

previous page.

accounting auditors. This includes hearing reports
from the accounting auditors on auditing plans and theRisk Management System

results of the audits.

As a result of organizational enhancement

LLC, audits financial documents and other information

implemented for FY2014, the supreme responsibility

as required under the Companies Act. We believe that nofor general risk management now rests with the Chiefparticular concerns, such as serious irregularities or illegal

Risk Officer (CRO). The Integrated Risk Management

actions, have been detected as a result of these audits.

The accounting auditor, Deloitte Touche Tohmatsu

14Council, which is chaired by the CRO, is responsible
for the development of risk management systems
throughout the JASDEC organization.

Annual Report 2014

Internal Audit, Audit & Supervisory Board
Member’s Audit, and Accounting Audit

Board of Directors and Audit & Supervisory
Board Members’ Limit of Liability
We expect Board of Directors and Audit &Supervisory Board Members to fully demonstrate
the skills involved in successfully executing their

JASDEC has established the Internal Audit Office,responsibilities. Additionally, to retain top-level

and internal auditing accomplished primarily throughprofessionals, we have set limits on liability foronsite surveys based on the audit plan, to assess

damages incurred by Board of Directors and Audit &the effectiveness of operational procedures. ForSupervisory Board Members.

Audit & Supervisory Board Member’s audit, an Audit& Supervisory Board Member serving on a full-timebasis routinely attends important meetings, such asResolutions on Election/Dismissal of
Board of Directors

those of the Board of Directors and the ExecutiveCommittee (comprised of executive managing

The election of Board of Directors by resolution at thedirectors serving on a full-time basis) and examines

general meeting of shareholders is conducted in thecirculars intended to obtain approvals of decisions bypresence of shareholders representing no less than one-persons in charge. The Standing Audit & Supervisory

third of voting rights held by eligible shareholders, andBoard Member performs audits in accordance

Board of Directors are elected by a majority vote of said

with the auditing plans established by the Audit &shareholders.

Supervisory Board, and provides the other Audit &The dismissal of Board of Directors by resolution atSupervisory Board Members with updates on thea general meeting of shareholders is conducted in theprogress of auditing activities at the meeting of Audit

presence of shareholders representing no less than one-& Supervisory Board, which takes place monthly.

third of voting rights held by eligible shareholders, andAudit & Supervisory Board Members serving on
a part-time basis attend meetings of the Board of

Board of Directors are dismissed on a vote of no less thantwo-thirds of voting rights held by said shareholders.