Dentsu Integrated Report 2018

In recent years, corporate governance has attracted a lot of media coverage and has come to mean a variety of things. Personally, I understand the term to denote management, conducted by managers, that reflects the kind of management demanded by shareholders. However, to distinguish between owners (shareholders) and management (managers), many modern corporations find that it is not so easy to completely align management demanded by shareholders with that conducted by managers.

The primary aim of corporate governance is to provide guidance, so that management might be seen by shareholders as being convincing in terms of balance between growth and stability, long-term investment and short-term returns, as well as scale and efficiency. The secondary objective is to appropriately explain these initiatives and degree of achievement to obtain shareholder support.

We have done much to improve our corporate governance system and its implementation. Currently, it is our goal to conduct Dentsu Group management in such a way as will garner shareholder approval with respect to our globalized, digitized, and value-added business efforts. Another important focus is on innovation management, whereby management and stakeholders—including customers, business partners, employees and society—coexist and work well together. An example of this kind of management involves the supervision of managers, to make sure that the Dentsu Group working environment reforms in Japan are promoted.

To maintain the system of rules, practices, and processes by which a firm is directed and controlled, in 2016 Dentsu transitioned to being an enterprise with an Audit and Supervisory Committee, and increased the number of independent outside directors. This has resulted in lively discussions at Board of Director and Audit and Supervisory Committee meetings. There is a constant awareness, among the directors and committee members, regarding the need for us to engage in the kind of management that our shareholders and other stakeholders expect. Before meetings, outside directors are provided with the information they require through briefings on agendas. In addition to prepared proposals, we also discuss new agenda items proposed by outside directors.

In order to summarize the Dentsu Group’s management performance we prepare appropriate financial statements and create the Dentsu Integrated Report. This report is designed to increase understanding of, and support for, our management practices. Regardless of whether the Group’s performance is good or bad, the Board of Directors and Audit and Supervisory Committee work with independent accounting auditors to ensure the financial statements are an accurate and timely representation of management.