2.0 corporate governance mechanisms
The chairman of the Board is Philip Hampton since 2004. It consists of three Executive Directors and six Non-Executive Directors.
2.1 Division of responsibilities between the Chairman and the Chief Executive
Corporate governance of Sainsbury set division of responsibilities between the Chairman and the Chief Executive.
The chairman is the leadership of the board. His responsibilities are designing its agenda and ensuring effectiveness of the board. Also the chairman of Sainsbury keeps communicating with shareholders effectively because the Board must know the opinions of major shareholders. In addition he makes sure that the Chief Executive could get a strategy, which must be supported by the Board as a whole. Furthermore Philip Hampton promotes constructive relations between the Executive and Non-Executive Directors.
Justin King is the Chief Executive of Sainsbury, his responsibilities is executing the strategy, which was agreed by the Board. He also creates a framework of values, organization and objectives to make sure the successful delivery of key targets. Finally he takes a leading role, with the Chairman, in the relationship with all external agencies and in promoting Sainsbury’s.
The division of responsibilities can help company to increase corporate governance and reduce the principal-agent problem. Chief Executive’s strategy must be agreed by the Board, at the same time, the Chairman must effectively communicate with shareholders. Therefore the Board will monitor the strategy and make sure it is represent the shareholders’ profit.
2.2 Independence of Non-Executive Directors
Non-Executive Directors are elected by shareholders at the first Annual General
Meeting and appointed for an initial three-year term. If they get mutual agreement and shareholders’ agreement, their appointment could be extended for a second term. There has a regulation to increase the independence that all the Non-Executive Directors are independent according to the provisions of the Code. This means that there is no compromise to the independence of the Directors who have executive or non-executive roles with other companies.
Directors may have a direct or indirect interest that conflicts with company’s interests without independence. The Board has established procedures for the disclosure by Directors of any such conflicts, and also for the consideration and authorization of these conflicts by the Board. In accordance with the Act, the Board considered and authorized each Director’s reported potential conflicts of interest during the year. The Board will continue to monitor and review potential conflicts of interest on a regular basis.
2.3 Remuneration Committee
The Committee is chaired by Bob Stack who was appointed a Non-Executive Director and Chairman of the Committee on 1 January 2005.
There are four main responsibilities for Remuneration Committee:
First, determining and agreeing with the Board the broad remuneration policy for the Chairman, Executive Directors and the Operating Board Directors;
Second, setting individual remuneration arrangements for the Chairman and Executive Directors;
Third, recommending and monitoring the level and structure of remuneration for those members of senior management within the scope of the Committee, namely the Operating Board Directors and any other executive whose salary exceeds that of any Operating Board Director;
Fourth, approving the service agreements of each Executive Director and including termination arrangements.
J Sainsbury plc is a PLC (Public limited Company). Also it has a limited liability, which means that no shareholder of Sainsbury is personally responsible for the debts, obligations, or acts of the company. From the data of FAME, GOVERNMENT OF QATAR via its funds has 26.01% of total shares, THREE DELTA (HOLDCO) LLP own 25%, RAZINO LTD occupy 6.98%, LORD SAINSBURY OF TURVILLE has 5.83%, LEGAL
Kaizen Costing Method And Its Role In The Management Of An Entity Accounting Essay
1. Introduction The purpose of my article is to let the managers know about a costing method, which applied even in the current crisis, will not only lead to an avoidance of bankruptcy, but may lead to even make a profit by improving competitiveness and financial efficiency.
Quality means to continuously meet the customers’ demands, total quality means to continuously meet the customers’ demands in terms of minimum cost, and total quality management ensures to continuously meet the customers’ demands in terms of minimum cost, involving all employees.
The main objective of this research is to identify a solution to permanent increase of production quality while reducing cost and time of selling. To achieve this goal, we conducted a theoretical fundamental research, through which I tried to transpose several features of Japanese management plan for a new costing method.
With no intention to exhaust the limits of thissubject matter, I made appeal in my scientific approach to a rigorous study of the literature and analyzed various points of view raised by specialists in this field. I made appeal to research methods such as documentation, analysis, synthesis. Assumptions, methodology approach and the results are my own contributions.
Maintenance and improvement are two inseparable concepts in Japanese management. Improvement is assessed by two terms: kaizen and innovation.
Kaizen is a Japanese management concept launched by Masaaki Imai, which proved to be the key to Japanese competitive success. The significance of this concept is: KAI = Change and ZEN = for better, and the translation is “continuous improvement”, that means small improvements to the ongoing efforts. Unlike the Western conception, implying total change, at large intervals of time, using large amounts of resources and a high cost level, Kaizen Costing seeks daily, gradual, slow, but continuous improvements, which take place at minimal cost.
Kaizen Costing message strategy is that a single day should not pass without an improvement to intervene in the activity of each employee or each entity. The Japanese have shown that by applying this strategy, improvement is achieved with minimal expenditure. Specific characteristics that ensure successful approach of Kaizen activities are the following:
disregards all ideas implemented so far in the organization of production;
rejects the whole existent situation;
it does not look for perfection, seeking a 40-50% improvement of the existent situation, but at an acceptable cost;
allows any manager to use their knowledge and personal skills;
the ideas produced by many people are better than the ideas of a single person;
the improvements have no limits.
Cost is one of the basic synthetic indicators that characterize the effectiveness of an entity’s activity. The importance of production cost is related to “the functions it fulfills in the context of economic-financial mechanism, schematically presenting itself as follows: ensures the resumption of production, measures the means of production and labour, allows the calculation of some efficiency indicators and the real knowledge of activity quality, sizes the profitability of economic entities, etc.” 
Kaizen Costing Management is focused on improving each process of a technological product sheet, the main goal being eliminating losses and minimizing costs. Process improvement ensures production efficiency, kaizen type activities ensuring maximization of product value corresponding to the requirements of the beneficiary, a qualitative differentiation of this. There are eliminated all those functions of the product which the customer has no interest in and which bring a cost increase without a correspondent in value.
â€žThe KAIZEN principles presumes a practical approach and low costs of improvement. The Kaizen management system is based on the continuous loss reduction by means of methods that do not rely on investments, but on the improvement of the processes and the employees’performance. According to the Kaizen principles, we must be sure that, when we take an action, our action will go on in the best possible way and is not merely an intermediate action to generate a temporary result” 
Innovation is achieved by sudden changes and generates radical improvements, compared to the initial situation, which is due to significant investments in technology, performance and equipment. Figure no. 1 shows the distinction between innovation, kaizen and maintenance:
Source: Imai 1997
Figure no. 1
Therefore, “Imai (1997) describes that the improvement can be divided into Kaizen and innovation. Kaizen signifies small improvements as a result of ongoing efforts. Innovation involves a drastic improvement as a result of large investment of resources in new technology or equipment. The author also explains that in the context of Kaisen, management has two major functions: maintenance and improuvement. Maintenance refers to activities directed towards maintaining current technologies, managerial and operating standards, and upholding such standards through training and discipline. Under its maintenance function, management performs its assigned tasks so that everybody can follow standard operating procedure.” 
Thomas M. Fischer and Jochen A. Schmitz K in “Control Measures for Kaizen Costing-Formulation and Practical Use of the Half-Life Model” considered that “Kaizen costing focuses on continuous reductions of costs, which should be realized for existing products in a company. For planning and control purposes, comprehensive and efficient tools for measuring performance are required”  .
In implementing Kaizen Costing strategy, managers rely on other techniques, methods and tools such as: quality circles, suggestions system, kanban, total productive maintenance, action plans, etc. The success of this strategy is subject to a number of changes in the entity’s culture and value system on which it is based.
Suggesting small steps strategy, Kaizen Costing is a concept of “umbrella” which treats the basic methods and concepts applied in quality management in Japan and whose value is recognized worldwide (Figure no. 2).The superiority of the concept stems from the fact that, by applying small steps strategy, the necessary resources are insignificant, while the strategies based on innovations involve huge investments, although the results are relatively the same. In addition, Kaizen brings in the forefront the employees of the entity, who are motivated to participate consciously and responsibly to achieve the objectives of the entity. In this process the most important dimension is the organizational one, the ability to communicate. Successful implementation of this approach is given by the technical and managerial knowledge, put together, and by the across application of some management tools (ABC, benchmarking).
Source: http://afr.kaizen.com; Imai (1986)
Figure no. 2.
The implementation of Kaizen Costing management system in economic organizations in our country would bring immediate gains by eliminating waste and losses, increasing labour productivity by 20-30%, reducing operating costs by 15-20%, reducing used areas, reducing the equipment needs and increasing the use of the remaining, increasing staff motivation. Kaisen Costing focuses the entity interest and attention on those places where you can reduce costs, this means on operating the production process and its development in the most efficient way. Unlike Target (used by design staff before the product is in production), Costing Kaizen Costing is used by production staff during product manufacture. Both follow the same target, but they differ in the method of settling the target: on perspective, Target Costing is based on customer considerations, while Kaizen Costing is based on profitability targets imposed by manager.
As a method of cost calculation and resizing, Kaizen Costing represents the expression of returning to the source, through the causes of performance and the roots of productivity, what is possible in a cross-viewing, and performing a process analysis under the ABC Method. “Cost reduction approach results by comparing the target-cost to the estimated one, and is fulfilled in terms of value, through an iterative process of continuous improvement.” 
Thus, Kaizen Costing is not interested in the product but in manufacturing process, which is more than just a cost method, but a global management tool.
Obviously, there are factors that hinder implementation and obtaining good results in Romanian entities. Among them the most influential one is the mentality, or psychological profile of Romanians, which do not encourage the achievement requirements of such management, but there is great criticism concerning the stress staff has to deal with.
In conclusion Kaisen Costing is the ideal management system to reduce costs. Through the application of this management style in managerial accounting, entities with limited resources could significantly mitigate the negative impact of current economic and financial crisis. As Masaaki Imai shows, “Restructuring or reinventing your company can be destructive, expensive and often inoperable. Applying Kaizen in gemba (job, where the action occurs), significant improvement is achieved with low costs in core business processes – production and services – and can be obtained, as never before, major leaps in customer satisfaction, in quality, productivity and profitability.”
For those who want to learn and apply this management system, I mention the following advantages: implementation costs are reduced, as Kaizen makes better use of existing resources and does not require large investments in improving technology, staff training costs are lower than for other methods, in Romania there are consulting firms in the field, entities that have implemented Kaizen have achieved remarkable results in labor productivity, in cost reduction and competitiveness increase.