Basic Approach to Corporate Governance

We strive to fulfill the mission stated in the Mabuchi Group’s management principle, "Contributing to international society and continuously increasing our contribution," through the small DC motor business. We understand that realizing this principle is our raison d’être, and we recognize that corporate governance comprises the organizational/management systems and various managerial measures that support those systems. Accordingly, we believe that the fundamental objective in establishing and implementing an appropriate corporate governance framework is to further the interests of our shareholders and other stakeholders on an ongoing basis through the creation of fair profits and the enhancement of corporate value.
Constructing and maintaining a corporate governance system along the lines given below are indispensable for Mabuchi as a listed company.

1. To clearly separate management decision-making and efficient business execution, and to clarify the scope of accountability,
2. To build and operate a sound internal control system, namely, to effectively work the internal control system and the management supervision system,
3. To appoint a suitable number of independent corporate officers whose interests do not conflict with those of general shareholders to ensure the objectivity and neutrality of management supervision functions
4. To foster a corporate culture in which all Group employees recognize and share the understanding that the practices of corporate ethics and compliance support the organization’s social impartiality and are fundamental to living up to the trust and expectations of all stakeholders
5. To disclose corporate information to shareholders and other stakeholders in an appropriate, fair, timely and clear manner and to ensure accountability through the Board of Directors, the Board of Auditors and other bodies

The Mabuchi Group employs a simple corporate management structure by establishing a corporate group consisting of Mabuchi Motor Co., Ltd., and its wholly owned subsidiaries as well as focusing and specializing its business resources on and in the small DC motor business. The Mabuchi Group employs the Corporate Auditor System as the best-suited organizational design after considering such matters as directors' duties, management efficiency and the maintenance of a management supervisory system that is appropriate to the above business contents and corporate management structure.

Outline of Corporate Institutions

Board of Directors and Executive Committee

Management decision-making is carried out by the Board of Directors, consisting of seven directors (including six resident in Japan) familiar with the Company’s management environment and business, and an Executive Committee, primarily composed of executive managing directors. The Board of Directors quintessentially serves the function of supervising management decision-making and the execution of directors’ duties and, as required by laws and ordinances, reporting on important executive management decisions and conditions. Responsibility for executing decisions that have been made by the Board of Directors is transferred to the representative directors and the executive managing directors. The Board of Directors convenes regularly once a month and at other times as required.
Mabuchi has established an Executive Committee, primarily composed of executive managing directors, with the objectives of supporting the functions of the Board of Directors, conducting preliminary consultations relating to important issues for deliberation by the Board of Directors, carrying out executive business decision-making outside the scope of the Board of Directors’ legal powers, and reporting on executive business conditions. This arrangement enhances the Board of Directors function, as it allows the Board to prioritize deliberation of reports and proposals, making decisions on these topics and monitoring and supervising the execution of duties. The Executive Committee meets regularly once a month.
In addition, Mabuchi has introduced an Executive Officer System that centralizes strategic decision-making and supervision functions on the Board of Directors and delegates powers and responsibilities to executive officers for the everyday execution of their duties. This system serves to enhance the functions of both the Board of Directors and the executive officers.

Board of Auditors

The corporate auditors (three of whom are independent outside auditors) carry out audits of the execution of duties by the Board of Directors and other bodies in accordance with legal stipulations and the auditing standards, policies, plans and apportioned duties determined by the Board of Auditors. Specifically, auditors attend meetings of the Board of Directors and the Management Council and other important meetings, oversee major business execution decisions and documentation related to their execution, if necessary requesting directors and employees to provide such documents or to submit reports, in order to audit and supervise execution of duties by the directors. The Board of Auditors convenes every second month and holds regular monthly meetings for the exchange of opinions between auditors and essential deliberations regarding the execution of duties by the Board of Directors.

Internal Audit Department

Mabuchi has established an Internal Audit Department, with three full-time members, under the direct control of the president. This body liaises with the Appropriate Auditing Committee and the Director Responsible for Internal Control and conducts ongoing supervision of the upgrading, running and effectiveness of the internal control framework for Mabuchi and its Group companies. The Internal Audit Department reports its findings to the president, the Board of Directors and the Board of Auditors.

Disclosure of Corporate Management Data

Mabuchi’s basic policy is to strive to carry out impartial, timely and clear information disclosure to ensure a fair evaluation of the Company’s corporate value and to gain the trust of its shareholders and investors. We innovate and improve our information disclosure to ensure highly effective data delivery that will cultivate broad understanding of the Company’s business activities.

Risk Management System

In order to prevent or reduce damage arising from the various risks relating to its corporate activities and to ensure early recovery and minimize damage that materializes from such risks, Mabuchi has established a Risk Management Committee to identify and evaluate risk from a Group-wide perspective and to formulate strategic countermeasures. In addition, we have formed a Group Emergency Response System to prepare for contingencies, with the objective of securing systems for communications and initial response in the event of a crisis.