Initiatives for All Stakeholders Governance

Corporate Governance

Management Oversight Functions and Board Attendance

As the Company’s highest decision-making management entity, the Board of Directors meets one or more times every month and decides on important matters focused on the exclusive authority matters prescribed in Article 416 of the Companies Act. The Board of Directors comprises six directors, four of whom are outside directors. The Company has established the following committees:

1. Nominating Committee

   The body that decides the content of proposals concerning the appointment and dismissal of directors to be submitted to the Shareholders’ Meeting. It comprises three directors, two of whom are outside directors.

2. Compensation Committee

   The Compensation Committee is the body that decides the details of the compensation awarded to individual directors and executive officers. It comprises three directors, two of whom are outside directors.

3. Audit Committee

   Meeting in principle once a month, this is the body that decides on audits with regard to any illegality or impropriety on the part of directors or executive officers in the execution of their business duties. It determines the content of proposals concerning the appointment and dismissal of the accounting auditor to be submitted to the Shareholders’ Meeting. It comprises three directors, all of whom are outside directors.

Director compensation and skill matrix

Director Compensation

Having established the Compensation Committee, the Company has created policies relating to the determination of the amounts of remuneration and other payments for its directors and executive officers. The Compensation Committee comprises one director and two outside directors. In cases where matters concerning the remuneration of the committee members themselves are discussed, the committee members do not attend. An outline of the deliberation methods follows.

Director compensation

Director compensation considers factors that include a director’s career, expert knowledge, level of ability, compensation history, responsibilities and the results of a survey on the compensation rates of other companies. Individual remuneration amounts are decided at Compensation Committee meetings. Compensation for directors who have no concurrent executive officer status is comprised of basic compensation (fixed) of an amount that reflects their duties.

Executive Officer compensation

Executive officer compensation is decided on an individual basis by the Compensation Committee. It considers the required role, the authorities given, and the extent of the responsibilities to be fulfilled in his or her delegated duties. In addition, it incorporates the results of a survey on the compensation levels of other companies.
The compensation amount for executive officers resident in Japan consists of “basic compensation (fixed)”, “performance-linked compensation”, and “shares with restriction on transfer”. The compensation amount for executive officers not resident in Japan consists of “basic compensation (fixed)”, and “performance-linked compensation”.
Performance-linked compensation is decided based on our policy and is awarded as an incentive to improve Group business performance. Group revenue and operating profit are used as the benchmarks for earnings performance, with the total amount paid decided by the following method:
Shares with restriction on transfer are awarded to eligible executive officers to expose them to the same advantages and disadvantages of share price fluctuation as shareholders, and to further increase their motivation to contribute to increasing the share price and improving corporate value.

*Total amount payable = the total amount based on target criteria for each executive officer x {(a coefficient linked to the rate of achievement of the Group revenue target for the fiscal year x 40%) + (a coefficient linked to the rate of achievement of the Group operating profit target for the fiscal year x 60%)}

Total compensation for FY6/2022

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Directors’ skill matrix

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