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Corporate Governance

Corporate Governance Support System

Our support system of corporate governance is on top of various organizations stipulated under Companies Act (General Shareholder's Meeting, Representative Director, Board of Directors, Board of Auditors, and Accounting Auditors). We have also deployed a Corporate Officer System in order to ensure prompt management decision making and execution of work operations by making clear the supervision of our management and execution of work operations.
Also, in order to fortify strategizing functions in our top management, we conduct deliberation to understand the current status of various business schemes and business strategies by holding Management Meeting among our Directors as core members. The Chair of the Board Meeting is our Chairman and cannot serve as a Corporate Officer at the same time. Furthermore, at the 138th General Shareholder's Meeting held on March 28, 2014, a proposal was made and approved to select two candidates as External Directors.
The attendance rate of Internal Officers at the Board of Directors was 100%. As for the attendance rate of Outside Officers at the Board of Directors, Outside Director Naozumi Furukawa had an attendance rate of 75% (9 out of 12 times), Outside Director Hideichi Okada had an attendance rate of 82.2% (13 out of 16 times), Outside Audit & Supervisory Board Member Yoshiki Sato had an attendance rate of 75% (12 out of 16 times), Outside Audit & Supervisory Board Member Go Kajitani had an attendance rate of 100% (16 times), and Outside Audit & Supervisory Board Member Akio Yamada had an attendance rate of 91.7% (11 out of 12 times). The attendance rate at the Board of Auditors was 100% for all Outside Audit & Supervisory Board Members.

Board of Directors Board of Auditors
Number of time attended Attendance rate Number of time attended Attendance rate
Naozumi Furukawa 9/12 75.0% - -
Hideichi Okada 13/16 82.2% - -
Yoshiki Sato 12/16 75.0% 5/5 100%
Go Kajitani 16/16 100% 5/5 100%
Akio Yamada 11/12 91.7% 5/5 100%

* Positions as of March 28, 2014.

* Please refer to the section on officers in the annual report and Directors, Audit & Supervisory Board Members, and Corporate Officers for the career history and scope of responsibilities of officers.

Reasons for the selection of Outside Directors and Outside Audit & Supervisory Board Members

  • Naozumi Furukawa
    Naozumi Furukawa was appointed as a Director in March 2014 to actively express his opinion and provide advice based on an extensive knowledge of corporate management, accounting, and finance. He was selected as an Outside Director so that we can continue to incorporate his abundant experience and insight as an officer of Zeon Corporation in corporate management.
  • Hideichi Okada
    Hideichi Okada was appointed as a Director in March 2013 to actively express his opinion and provide advice from an international perspective based on deep insights related to phenomena surrounding corporate management including the economy and society. He was selected as an Independent Outside Director as stipulated by the Tokyo Stock Exchange so that we can incorporate his abundant experience and insight related to government offices in corporate management.
  • Yoshiki Sato
    Yoshiki Sato was appointed as an Outside Audit & Supervisory Board Member in June 2011 to actively express his opinion and provide advice based on an extensive knowledge of corporate management, accounting, and finance. He was selected as an Independent Outside Director as stipulated by the Tokyo Stock Exchange to further strengthen our auditing system by utilizing his extensive experience and deep insights as an officer of Asahi Mutual Life Insurance Company and experience as an Outside Audit & Supervisory Board Member at other companies.
  • Akio Yamada
    Akio Yamada was selected as an Independent Outside Director as stipulated by the Tokyo Stock Exchange to actively express his opinion and provide advice based on specialized knowledge gained through experience at government agencies and incorporate his experience as an Outside Audit & Supervisory Board Member at other companies in our audits and the strengthening of our audit system.
  • Go Kajitani
    He was selected as an Independent Outside Director as stipulated by the Tokyo Stock Exchange as it was deemed that it would be possible to strengthen our audit system by leveraging his deep insights as a lawyer and his abundant experience in the legal world. (He resigned in March 2015.)

At the 16th Board of Directors' Meeting for FY 2013, 83 proposals were deliberated.
In addition, we seek and incorporate the opinions of institutional investors in matters including proposals at the General Shareholder's Meeting for Outside Officers, proposals on dividends and the Corporate Governance Code, and how the Stewardship Code response policy.

Under our systems, Audit & Supervisory Board Members can get know the status of our business operations by attending various important meetings or committees such as the Management Meeting, and the Internal Audit Office that serves as an independent organization conducts internal audits of each business to check that operations are being conducted properly.

We have three pillars in our auditing system; the audits done by our Audit & Supervisory Board Members who supervise work execution by our Directors, accounting audits done by our independent accounting auditors as external audits, finally, the audits done by our Internal Audit Department for work operation by our each corporate division and group companies, plus accounting audits. They function by maintaining each other's independency; by establishing the three pillars of the audit system, our Audit & Supervisory Board Members can fortify the function of Audit & Supervisory Board Members by obtaining information from our Accounting Auditors and Internal Audit Department in a timely manner.

Also, in order to secure transparency and fairness in appointment and various benefits of our Directors, we determine them at the Board of Directors' Meeting by establishing a voluntary Personnel/Remuneration Committee for Corporate Officers and Directors followed by our review. Also, the measurement for critical matters such as conflict of interest will be determined in accordance with the Regulations of our Board of Directors. Also, the measurement for critical matters such as conflict of interest will be determined in accordance with the Regulations of our Board of Directors as a general rule.

Corporate Governance Support System

Improvement of our Corporate Governance System

We have made resolutions under the "Basic Guidelines for Corporate Governance in Accordance with Companies Act" during our Board of Directors' Meeting in May 2006. Not only do we follow up with their activity status every year, but also we keep making further enhancements such as our review by aiming for clearer description of the "Guidelines of the Elimination of Anti-Social Behavior" in April 2009. Also, to comply with the J-SOX Law effective from the fiscal year of 2008 (evaluation of support system for financial account in accordance with Financial Instruments and Exchange Act), it has been confirmed that our corporate governance system is effective both in internal and external evaluation in the fiscal year of 2014. We will continue to make improvements on this aspect as well in order to maintain our sustainable and effective functions.

Remuneration for Corporate Officers and Directors

Candidates for Directors and Audit & Supervisory Board Members are selected by the Personnel/ Remuneration Committee for Corporate Officers and Directors, submitted to a resolution by the Board of Directors, and then submitted to approval by the General Shareholder's Meeting. For remuneration, the Board of Directors has established a policy of "establishing a Personnel/Remuneration Committee for Corporate Officers and Directors to secure transparency and fairness and then determining remuneration at the Board of Directors." For the remuneration of Audit & Supervisory Board Members, the Board of Directors has established a policy of "determining remuneration by Audit & Supervisory Board Members after deliberation by the Board of Directors in order to ensure the transparency, fairness, and independence of audits." It was 609 million yen for FY 2014. We seek the opinions of stakeholders through means such as a shareholder questionnaire and the "Contact Us" page of our official website.

Details of executive remuneration

Executive category Total remuneration
(Million yen)
Total by type of remuneration
(Million yen)
Number of applicable executives (persons)
Basic remuneration Bonus
Directors (excluding Outside Directors) 523 374 149 10
Audit & Supervisory Board Members (excluding Outside Audit & Supervisory Board Members) 58 45 13 2
Outside Officers 28 28 - 6