Securing Growth and Improved Profitability From FY 2004

 The second change to our corporate structure is the adoption of the “Company with Committees System”, scheduled for approval at our General Shareholders’ Meeting at the end of June.
 NSK introduced its current non-statutory executive officer system and appointed an outside director in 1999 to strengthen the monitoring and audit functions of its board of directors. At the same time, we established a non-statutory compensation committee, and last year established an audit committee to improve the transparency of our management.
This year, while maintaining the present NSK-style corporate governance principle, we will upgrade the compensation, audit, and nomination committee to meet statutory requirements of the Japanese Commercial Code, abolish the current executive officer system and introduce a new statutory executive officer system to build a new corporate governance structure.
 The board of directors will maintain its monitoring functions over overall business operations, but transfer more of its functions and authority to the new executive officers, to increase flexibility and speed of management.
 By upgrading the audit committee to statutory status and establishing an internal control system within the new executive officer system, we will be able to reinforce monitoring and risk management functions of the entire NSK Group.
 Through the new corporate governance system, we hope to ultimately increase shareholder value of our company.