The Company separates the decision-making and monitoring functions of the Board of Directors from the business execution functions of the Executive Officers.
The Board of Directors system was streamlined in accordance with the adoption of an executive officer system in 2000. Discussion by the small number of people involved facilitates prompt decision-making. Matters to be discussed by the Board of Directors have been stipulated in the Board of Directors Rules and, at the Board meetings, candid and proactive opinions are expressed even by Outside Directors, while matters pursuant to provisions of the Companies Act and the Articles of Incorporation and other important matters relating the Company and the Group are resolved and the status of execution of duties is reported through fruitful discussions. All Directors attended the Board of Directors’ meetings, which were held 13 times during the fiscal year ended March 31, 2020. In addition, as initiatives in each quarter, following the Board of Directors’ meetings, a “free discussion” is held with the participation of all Directors (including Outside Directors and Directors elected as Audit Committee Members), Vice Presidents and Executive Officers and heads of business divisions. At those times, vigorous discussions take place regarding medium- to long-term management issues and others based on presentations and themes relating to the Group’s various businesses.
Important matters related to business execution are deliberated on and resolved by the Management Strategy Conference, chaired by the Group CEO and comprising Executive Directors, Vice Presidents and others. The Management Strategy Conference is held regularly once a month and when necessary to make decisions on global management, the formulation of general strategies on group management and other important matters related to business execution that are not be discussed at the Board of Directors’ meetings, in addition to discussing matters, excluding ones to be resolved exclusively by the Board of Directors, before they are presented to the Board of Directors, in an effort to enhance deliberations.
The Company has established the Nomination Committee as an advisory body to the Board of Directors, with the aim of improving transparency, objectivity and fairness in the selection and removal of Directors and the resignation of Representative Directors, as well as obtaining advice and recommendations concerning the development of management personnel capacity. The Nomination Committee deliberates and provides recommendations regarding the following matters.
- Proposals for the selection of candidates for Directors and the dismissal of Directors
- Advice and recommendations about the assumption and retirement from office of the Group CEO and succession plans
- Advice and recommendations about proposals for the selection of candidates for Vice Presidents and Executive Officers and the dismissal of Vice Presidents and Executive Officers as well as succession plans
- Proposals on the members of the Board of Directors (the ratio between Internal Directors and Outside Directors, areas of the members’ expertise, professional careers, etc.)
- Examination and preparation of the requirements for Directors and their selection criteria
- Advice and recommendations about the management and operation of several systems (a term of office, an age limit, etc. for each position) regarding the Company’s officers (including Executive Officers) as the whole and revisions of such systems
- Advice and recommendations about “Training Program for Next-Generation of Executives” as well as training for Directors, Executive Officers or their successors
Furthermore, the Company has established the Compensation Committee as an advisory body to the Board of Directors for deliberating and reporting on the compensation, etc. of Directors, Vice Presidents and Executive Officers, which is an essential matter relating to corporate governance, including bonuses and other performance-based compensation based on the evaluation of performance for the previous fiscal year, as well as the scheme, content, level and balance of distribution, etc. of the compensation of officers for the fiscal year ended March 31, 2019. Moreover, the Company has established the Compensation Committee as an advisory body to the Board of Directors for deliberating and reporting on the compensation, etc. of Directors, Vice Presidents and Executive Officers, which is an essential matter relating to corporate governance, including bonuses and other performance-based compensation based on the evaluation of performance for the previous fiscal year, as well as the scheme, content, level and balance of distribution, etc. of the compensation of officers for the current fiscal year.
Currently, the Nomination Committee and the Compensation Committee comprise six Directors, namely all Outside Directors (four Directors including those elected as Audit Committee Members, namely Takaya Seki, Kazuyoshi Aoki, Norio Igarashi and Keiko Shimizu), and Hirokazu Hamada, Representative Director, President and Group CEO, as well as one Director (Akifumi Kubota) nominated by the Group CEO, while the chairperson of each committee is elected from among Outside Directors.
In addition, an Independent Committee has been operated, comprising only Outside Directors as an initiative since the transition to a Company with an Audit Committee. The Chairperson of the Independent Committee is elected by mutual vote of the Outside Directors as a “Lead Independent Outside Director,” who undertakes the role of summarizing the opinions of Outside Directors, communicating and coordinating with the Company’s top management. As a result, a venue for free and active discussion has been created led by robust and smooth communications among Outside Directors, resulting in facilitating an exchange of information and sharing the same problem recognition among officers from the stance of being independent and objective. The Company expects the Independent Committee to contribute to the enhancement of the Group’s corporate value through the advice provided to the management, recommendations on the evaluation of effectiveness of the Board of Directors and reports on matters for which advice was sought from the Board of Directors.
The Audit Committee sets the “Auditing Standard for Audit Committee,” receives business reports from the Group, investigates the status of business execution and assets and/or exercises its authority to appoint or dismiss the Accounting Auditor. Taking these steps, the Audit Committee conducts an audit on business execution by Directors, the effectiveness of the internal control system, the business performance, the financial condition and the like of the Company. Matters relating to audits including the progress of the audit by the Audit Committee (including the matters relating to the full-time committee members and the chairperson), progress of the internal audit and the accounting audit are stated in “(3) Status of Audits.”