List of Directors
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Following the conclusion of the 85th Ordinary General Meeting of Shareholders held on June 28, 2011, the Company implemented a system with 3 Outside Directors and 2 Outside Audit & Supervisory Board Members. Furthermore, the Company made a transition to a Company with an Audit Committee by resolution of the 89th Ordinary General Meeting of Shareholders held on June 25, 2015 and has adopted a system with five Outside Directors (including two Audit Committee Members). Upon that transition, Outside Officers were collected and made members of the Board of Directors to raise the ratio of Outside Directors in the Board of Directors. This contributed to the enhancement of deliberations by allowing more active discussion in the light of the viewpoints of various stakeholders.
After the close of the 91st Ordinary General Meeting of Shareholders held on June 28, 2017, the number of Outside Directors was four (including two Audit & Supervisory Committee Members). At present, the number is five (including three Audit & Supervisory Committee Members), as resolved at the 95th Ordinary General Meeting of Shareholders held on June 24, 2021. By appointing Outside Directors who have rich experience as the top management of global business companies or broad knowledge and excellent insight as lawyers, CPAs, and members of other professions, Anritsu expects to obtain advice and suggestions from an outside perspective, and to utilize such advice and suggestions to address its managerial challenges. Since all the Outside Directors join the Nominating Committee and the Compensation Committee as members, we believe that deliberations at the meetings and the boards’ decision-making process will become more objective and impartial, thereby contributing to ensuring transparency of the Company management.
The Company has assigned all of Outside Directors as its Independent Officers and filed them with the Tokyo Stock Exchange. As for the holding of shares in the Company by Outside Directors, none holds shares in the Company at present. There are no personal, capital or trading relationships, or other conflicting interests between the Company and each of its Outside Directors. Therefore, the Company judges that there are no potential conflicting interests between them and the general shareholders, on the grounds that none of them is a person who executes business, principal shareholder or former employee of the major clients of the Company or the Company’s affiliates, and that the Company recognizes no significant matters concerning these Outside Directors that affect their independence.
In selecting Outside Directors, the Company pays close attention to definitions of judging potential conflicts of interest with general shareholders as laid down in the “Guidelines Concerning Listed Company Compliance, etc.” of the Tokyo Stock Exchange. This precludes any possibility of selecting a person who may be under significant influence of the Company’s management or exerts a significant influence on the Company’s management. In addition to this, with a view to reflecting various stakeholders’ views on the supervision and proper management of the Company Group’s operations, the Company places importance on the diversity of nominees’ professional competence, background and other aspects.
In order to facilitate sustainable and robust corporate governance, the Company believes that it is needed to exclude arbitrariness in selecting and nominating candidates for Outside Directors, and to establish an environment that maintains the independence of Outside Directors after they assume their office. In line with this notion, the Board of Directors resolved to adopt the “Criteria for the independence of Outside Officers” as detailed below. The establishment and revisions of these criteria shall obtain an approval and be resolved by the Board of Directors after deliberation at the Nomination Committee, which is an advisory body of the Board of Directors. The Company emphasizes the importance of its Outside Directors remaining neutral and independent of the Company. In light of this, in selecting candidates for these positions, it adequately considers whether or not their independence meets these criteria.
Criteria for the independence of Outside Officers
With reference to the results from reasonable assessments conducted by the Company and other information, the Company judges that the Outside Director (hereinafter referred to as the “Outside Officer”) or Outside Officer candidate is sufficiently independent of the Company’s management if he/she or his/her business title does not fall into any of the categories as set out below.
- A person who executes business*1 of the Company or its subsidiaries (hereinafter collectively referred to as the “Company Group”);
- A principal shareholder*2 of the Company or a person who executes business*1 for such shareholder;
- A person who executes business*1 of an organization of which the Company Group is a principal shareholder*2;
- A person of an organization of which the Company Group is a major client*3, or a person who executes business*1 for such organization;
- A major client*3 of the Company Group or a person who executes business*1 for such client;
- A person of an organization which receives a large amount of contributions in the form of money or other asset*4 from the Company Group, or a person who executes business*1 for such organization;
- A consultant, professional accountant (e.g. certified public accountant) or legal professional (e.g. lawyer) who receives a large amount of money or other asset*4 other than Director’s compensation (if the subject receiving a large amount of money or other asset*4 is a corporation or institution such as association, then a person belonging to one of these organizations);
- A person from an organization with which the Company Group has a reciprocal Outside Director appointment*5 relationship;
- A person who has fallen under any of the above 1 to 8 in the past*6;
- A person who is a spouse or relative within the second degree of those stated in a) or b) below;
- Important persons*7 of those described in the above 1 (note that these include both incumbent and former Directors who are/were not persons who execute business*1 when judging the independence of Outside Directors elected as Audit Committee Members or their candidates);
- Important persons*7 of those described in the above 2 to 8; or
- Other than those described above, a person whose circumstances are reasonably considered incapable of fulfilling Outside Director’s responsibilities, from his/her perspective being independent of the Company.
- *1. “A person who executes business” refers to a person who executes operations of Director (excluding Outside Director), Officers, employees (including Executive Officers), etc. It also refers to a person who executes operations of a legal entity (other than a corporation) or an institution, e.g. association.
- *2. A shareholder whose voting common stocks in the Company (held either directly or indirectly) accounts for 10 percent or more of the total is reasonably deemed as a “principal shareholder.”
- *3. “Major client” is defined according to the description of a “major client” prescribed in III 5. (3)-2 of the Guidelines Concerning Listed Company Compliance, etc. of the Tokyo Stock Exchange.
- *4. The Company reasonably assesses that the value of “money or other asset” awarded to the person is “large,” if it, for any fiscal year, stands at 10 million yen or more, or accounts for 1 percent or more of the person’s gross income, whichever is greater.
- *5. “Reciprocal Outside Director appointment” refers to a relationship between the Company Group and another company where an incumbent Outside Director of the other company was previously an employee of the Company Group and in reverse an Outside Director of the Company Group was previously an employee of the relevant other company.
- *6. The “past” in this context does not represent any specific period of time with regard to the person stated in 1 above, whereas the term “past” referring to the above 2 to 8 means the previous 5 fiscal years including the most recent one.
- *7. The term “important persons” specified in a) means persons who execute business as stated in the above 1. They include important employees such as Executive Officers but exclude those whose positions are General Managers or lower. With regard to the “important persons” of those described in the above 2 to 8 (excluding 7) as specified in b), the criteria is limited to important persons who execute business and ranked at important positions, such as Director, Officer or Executive Officer. Separately the “important persons” referred to in the above 7 are limited to those with professional qualifications, such as public certified accountants or lawyers.
- *8. The Company will separately set out, as necessary, the criteria for “the amount of transactions or contributions that can be deemed not to have significant influence on shareholders’ decisions regarding the exercise of their voting rights,” concerning “Listed company clients and Directors who were previously employees of such clients” and “Beneficiaries of contributions made by listed companies or Directors who were previously employees of such beneficiaries” (both are mandatory attributable information to be incorporated in the Corporate Governance Report and Independent Directors/Auditors Notification filed with the Tokyo Stock Exchange in accordance with the Exchange’s rules).
Coordination between the supervision by Outside Directors, internal audit, audit by the Audit Committee and the accounting audit, and their relationship with the internal control departments
The Company adopts an approach whereby Outside Directors not elected as Audit Committee Members are allowed to attend the audit-related exercises as observers, including domestic site visits and quarterly reviews by the Accounting Auditor. By continuation of this approach, such as participation in site visits, we will promote the Outside Directors’ understanding of the status of execution of operations in the Company, while facilitating better mutual cooperation between the audit by the Internal Auditing Center and that by the Audit Committee. In the meantime, Outside Directors hold meetings and other sessions for exchanging opinions with the Accounting Auditor, accounting departments and internal control departments as appropriate, while periodically receiving reports at the Board of Directors meetings on the status of operations of internal control, etc. to keep abreast of the latest internal control environment of the Group.
These approaches, joined in by all Outside Directors, along with the aforementioned “free discussions,” provide opportunities for them to deepen their understanding of the Group’s business and its management environment, which are believed to facilitate appropriate supervision by the Board of Directors based on the information about the management issues, etc. collected through each member of the Independent Committee and shared by all Directors. Moreover, Outside Directors from time to time provide the senior management with lectures, etc. based on the subjects concerning their fields of study and specialty, offering excellent opportunities for management resources development.