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1. Accounting(Revision of Companies Act and External Director)

A bill to revise the Companies Act will be promulgated soon, coming into effect sometime around spring 2015. In this revision, the following points are included: (1)Obligatory disclosure of any reason for the non-appointment of any external director,(2)The creation of a system of companies with the Audit and Supervisory Committee, and (3)Tightening the requirements for external directors and outside statutory auditors.

Meanwhile, 2,194 companies (64.4%) out of 3,408 of all listed companies have appointed an external director according to “the state of appointment of external directors wi thin the companies listed on the Tokyo Stock Exchange (TSE)” that was announced on Ju ne 17 by the TSE.(Source:“Keiei Zaimu Magazine” No.3169)

2. Taxation (Reduction of the Effective Corporate tax rate)

The government adopted a reduction of the Effective Corporate tax rate at an extraordi nary cabinet meeting last June. The current rate of 36% will be reduced within the 20% -29% range over the next few years. The details of this decision will be finalized in the outline of the 2015 tax reforms.(Source: “Zeimu Tsushin Magazine” No.3317)

3. Labor Management(Results of 2013 Regular On-site Inspections by Tokyo Labor Bureau)

The Tokyo Labor Bureau announced the results of the regular on-site inspections conducted in 2013 by the Tokyo Labor Bureau and the 18 Labor Standards Inspection Offices under its administration. (Regular on-site inspections: On-site inspections of business entities conducted by Labor Standards Inspectors based on varied information, industrial accident reports or the results of past instructions and supervisions, etc.)Of the 9,304 inspections, violations were discovered in 6,612 cases, which accounts for as much as 71.1% of all inspections.

The most common violations were inadequate management of employees’ working hours, fo llowed by unpaid overtime wages and failures to clearly indicate working conditions. T here were many cases where unpaid overtime wages occurred as a result of the employers’ inappropriate management of the employees’ working hours. Once again, employers are required to comply with the law in their management of labor. (Ministry of Health, Labor and Welfare, “Results of Regular On-site Inspections 2013”)

4. This Week’s Words of Wisdom

“If you believe satisfactory management can be achieved by listening to your staff’s desires and encouraging them to follow them, then you are merely in a kindergarten of democracy.” (Anonymous)

Once I heard that the ideal type of leader is a consensus-seeker who is able to tie together varying opinions and I felt uneasiness with this idea. Although it is important to listen to the opinions of others, I think the obligation of a leader is to make responsible decisions for the good of others.

The referring page is Nagamine & Mishima JC Accounting K.K.

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