Corporate Governance
Basic Approach to Corporate Governance
Through a decision by the Board of Directors in December 2015, Fujitsu formulated a basic policy that sets out its approach to corporate governance (the "Corporate Governance Policy"). We updated the policy in September 2023 and, adopting the stance that the aim of corporate governance is to ensure better management, we constantly review the policy to ensure that it does not become rigid or lose its relevance. We also discuss it with the Board of Directors as appropriate, and strive to maintain the best corporate governance system at all times.
Corporate Governance Structure (as of June 23, 2025)
In accordance with its Corporate Governance Policy, the company outlines the following rules to ensure effective oversight and advice, given from the diverse perspectives of Non-Executive Directors (hereinafter, the term used for a combination of Independent Directors and Non-Executive Directors appointed from within the company), to Executive Directors on their business execution as part of the Board of Directors function while taking advantage of the company through the Audit & Supervisory Board system.
＜Board of Directors＞
The Company has a Board of Directors to serve as a body for making important decisions and overseeing management. The Board of Directors delegates the decision-making authority over business execution to the Representative Directors and subordinate Corporate Executive Officers to the broadest extent that is permitted by law and the Articles of Incorporation of the company and is considered to be reasonable and will mainly perform as oversight and advisory function. Moreover, the Board of Directors has been formed with Non-Executive Directors at its core so as to enable correction and remediation of errors, insufficiencies, and recklessness in business execution. And by ensuring that External Directors, who are highly independent and hold diverse perspectives, constitute the majority of the members of the Board of Directors, the oversight and advisory function of the Board of Directors is strengthened. Furthermore, in order to better define the management responsibility of the Directors, their terms were reduced from two years to one year in accordance with a resolution at the June 23, 2006 Annual Shareholders’ Meeting.
As of June 23, 2025, the Board of Directors consists of nine members in total, comprising three Executive Directors and six Non-Executive Directors (including five External Directors).
In FY2024, the Company held 15 Board of Directors meetings (including three extraordinary meetings) to flexibly resolve and report on the matters that come under the Board’s province pursuant to the Companies Act and the Regulations of the Board of Directors of the Company, convening extraordinary meetings as necessary in addition to monthly regular meetings. The Board identified the following five themes as the themes that it should focus on based on the business environment surrounding Fujitsu Group: 1) progress in the Medium-Term Management Plan, which the Board had approved; 2) mechanisms to )ink Materiality to business; 3) development and operation of internal control systems and oversight of risk management; 4)
monitoring of important M&As and reorganization cases; and 5) succession planning of Directors and others.
The Board had discussions with focus on these themes and continued monitoring them.)
Furthermore, the Board discussed agenda items such as shareholder returns, examinations of strategic shareholdings, and feedback on dialogues with shareholders and investors. It also received timely reports from the Risk Management & Compliance Committee that oversees risk management of the entire Group. The reports included monthly updates on the execution status of its tasks and the actions taken regarding individual risks that materialized in FY2024. The Board continued implementing oversight based on these reports. The Company carries out an evaluation of the effectiveness of the Board of Directors every year to improve corporate value by raising the Board’s effectiveness. In FY2024, as in FY2023, we conducted a questionnaire for all directors and corporate auditors and individual interviews with each officer based on the answers to the questionnaire, analyzed and evaluated the results, and discussed specific measures at the Board of Directors. As a solution to the issues identified through these efforts, the Company has made efforts to further improve the effectiveness of the Board of Directors by implementing measures such as (1) The Company created a new framework of intensive discussions to confirm the progress of the Medium-Term Management Plan resolved by the Board of Directors and to intensively discuss important management themes, (2) For efficient operation of the Board of Directors meeting, we offered videos explaining agenda items that are suitable for video-based explanation and conducted the meetings on the premise that the participants watched the video in advance using video recordings as an effort to operate the Board of Directors efficiently.
＜Audit & Supervisory Board＞
The Company has an Audit & Supervisory Board that performs the auditing and oversight functions. The auditing and oversight functions are carried out by Audit & Supervisory Board Members, who review the Board of Directors as well as business execution functions and attend important meetings, including meetings of the Board of Directors.
The Audit & Supervisory Board has five members, comprising two full-time Audit & Supervisory Board Members and three Independent External Audit & Supervisory Board Members.
In FY2024, the Company held 9 Audit & Supervisory Board meetings, mainly to develop and resolve its audit policy and audit plans, confirm the audit plan and method of Accounting Auditors, examine the appropriateness of their audit results and key audit matters and heard reports from the internal audit section. In addition, the full-time Audit & Supervisory Board Members reported and discussed on important items to External Audit & Supervisory Board Members.
In FY2024, Audit & Supervisory Board Members conducted the following audit activities with a focus on the building and operation of internal control systems and responses to management challenges in accordance with the approved audit policy and plans:
- Attending and expressing opinions at the Board of Directors meetings, meetings of Independent Officers, and other important meetings
- Reading important approval documents
- Exchanging opinions with Representative Directors
- Interviewing each business line at the Head Office and subsidiaries on their operations
- Hearing reports from statutory auditors of subsidiaries
- Hearing reports from Accounting Auditors
- Hearing the audit status and results from the internal audit section
- Hearing the status of whistleblowing from the compliance section
- Hearing the status of risk management and quality control
The discussion topics were potential risks of material misstatements in the consolidated financial statements and impacts of, and developments in, material events, etc. that occurred in FY2024.
＜Independent Directors &Auditors Council＞
The Company has Independent Directors and Auditors Council in response to the requirements of Japan’s Corporate Governance Code, which facilitates the activities of Independent Directors and Auditors, and in order to invigorate discussions on the medium- to long-term direction of the Company at its Board of Directors Meetings, the Company believes it essential to establish a system that enables Independent Directors and Auditors, who maintain a certain degree of separation from the execution of business activities, to consistently gain a deeper understanding of the Company’s business. Based on this recognition, the Company establish the Independent Directors and Auditors Council, which consists of all Independent Directors and Auditors (five Independent Directors and three Independent Auditors), and discusses the medium to long-term direction of the Company, shares information, and exchanges viewpoints so that each can formulate their own opinions.
In FY2024, the Company held 12 Independent Directors and Auditors Council meetings. The members continuously discussed important management matters such as progress in management policies and business restructuring of the Company and the Fujitsu Group including mergers and acquisitions and shared information and exchanged viewpoints. In addition, in cases of setting prior explanation of important matters that required resolutions at meetings of the Board of Directors as an agenda, a new framework was set up in which a body was structured as a meeting for prior explanation, and full-time Audit & Supervisory Board Members attended as observers. The meeting was held twice during the period under review.
＜Executive Nomination Committee and Compensation Committee＞
The Company has established the Executive Nomination Committee and the Compensation Committee as advisory bodies for its Board of Directors for the process of nominating Directors and Audit & Supervisory Board Members, for ensuring the transparency and objectivity of its process for determining executive compensation, to enable efficient and substantial discussions, as well as to ensure the fairness in the structure and level of executive compensation.
The Executive Nomination Committee deliberates on the candidates for Director and Audit & Supervisory Board Member positions in accordance with the Framework of Corporate Governance Structure and the Procedures and Policy for the nomination and dismissal of Directors and Auditors stipulated in the Policy, and it provides its recommendations or proposal to the Board of Directors. In addition, the Compensation Committee provides its recommendations or proposal on the level of base compensation and the method for calculating performance-based compensation to the Board of Directors in accordance with the Procedures and Policy of Determining Directors and Auditors Compensation, as stipulated in the Policy.
Executive Nomination Committee consists of three Non-Executive Directors (including two Independent Directors) and Compensation Committee consists of three Independent Directors. The Members of the 2 committees appointed in June 2025 are as follows. Additionally, the secretariats of both committees are operated by the Company’s HR and legal departments. The committee shall consist of Non-Executive Directors and Auditors, more than half of whom shall be Independent Directors. The Chair of the committee shall be an Independent Director.
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Executive Nomination Committee
Chairperson: Yoshiko Kojo (Independent Director)
Members: Kenichiro Sasae (Independent Director), Hidenori Furuta (Non-Executive Director) -
Compensation Committee
Chairperson: Byron Gill (Independent Director)
Members: Takuya Hirano(Independent Director), Izumi Kobayashi(Independent Director)
In FY2024, the Executive Nomination Committee met ten times and the Compensation Committee met six times. The Executive Nomination Committee considered a proposal for the election of Representative Directors, including the CEO, and proposals for the election of candidates for Directors, Audit & Supervisory Board Members, and the Chairperson of the Board of Directors, etc. The Compensation Committee discussed the level of compensation of Directors and evaluation indicators for the performance-related compensation for the Executive Directors. And each Committee provided its findings to the Board of Directors by the end of the period under review. The Executive Nomination Committee also considered the skills matrix, the succession planning for the CEO, etc. and the selection of candidates for External Directors and Audit & Supervisory Board Members, and conducted a peer-review of Non-Executive Directors, while the Compensation Committee discussed the disclosure scope of executive compensation.
The diagram below illustrates the Company's corporate governance structure. (As of June 23, 2025).
* Number inside parenthesis refers to number of Directors and /or Audit & Supervisory Board Members
Reasons for Adoption of Current Corporate Governance System
We believe that both direct oversight to business execution by the Non-Executive Directors and the oversight by Audit & Supervisory Board Members that stays distant from the decision making and operation of business execution should work jointly to ensure highly effective oversight performance. The company adopts “the company with Audit & Supervisory Board system” that establishes the Audit & Supervisory Board, which is composed of the Audit & Supervisory Board Members appointed as an independent agent.
Moreover, the Board of Directors has been formed with Non-Executive Directors at its core so as to enable correction and remediation of errors, insufficiencies, and recklessness in business execution. And External Directors constitute the majority of the members of the Board of Directors. The core of Non-Executive Directors shall be External Directors with a high degree of independence and diverse perspectives. Moreover, at least one Non-Executive Director is appointed from within the Company to complement the External Directors’ knowledge in the business fields and the culture of the Company, so that the efficiency of oversight and advice performance by the Non-Executive Directors is enhanced.
Basic Approach to the Internal Control System
The compensation of Directors and Auditors is determined based on the "Basic Policy on Executive Compensation," which sets out the details of individual compensation for Directors, and was decided by the Board of Directors in response to a recommendation from the Compensation Committee.
Basic Approach to the Internal Control System
To continuously increase the corporate value of the Fujitsu Group, it is necessary to pursue management efficiency and control risks arising from business activities. Recognizing this, the Board of Directors have formulated the "Policy on the Internal Control System", which provides guidelines on: a) how to practice and promote the Fujitsu Way, the principles that underlie the Fujitsu Group’s conduct; and b) what systems and rules are used to pursue management efficiency and control the risks arising from the Company’s business activities.
See below for the full text of the Policy on the Internal Control System and an overview of the operating status of the systems tasked with ensuring appropriate business practices.
Disclosures Relating to Corporate Governance
Board of Directors (as of June 23, 2025)
FY2024 Attendance at Meetings of the Board of Directors or Audit & Supervisory Board
Skills of directors and auditors
As a global company making the world more sustainable by building trust in society through innovation, our company has identified requisite qualities including diversity and the necessary skills for Directors and Audit & Supervisory Board Members to execute operations and provide appropriate advice and supervision in their respective roles.The table indicates skills that the Board of Directors highly expected of, among the skills that each Directors and Audit & Supervisory Board Members possesses.
Directors (as of June 23, 2025)
Auditors (As of June 23, 2025)
Definitions of skill matrix categories
