Corporate Governance

The Company’s Board of Directors is composed of twelve Directors, nine of which are Directors who are not Audit & Supervisory Committee Members and three Directors who are Audit & Supervisory Committee Members, including four independent Outside Directors. The Board decides the important business policies of the Company and the Group, supervises business execution, and receives reports on the status of business execution. Further, in order to expedite decision-making, decisions on important business execution are flexibly delegated to the Directors, thereby enabling expedited and flexible decision-making.

The Company’s Audit & Supervisory Committee is composed of three Directors who are Audit & Supervisory Committee Members, including two independent Outside Directors. Audit & Supervisory Committee conducts audits based on an annual corporate audit plan established in accordance with the audit policy and the assignment of duties determined by the Audit & Supervisory Committee. This is executed in accordance with the internal control system by utilizing the Internal Audit Department positioned under the direct control of the Audit & Supervisory Committee, and in close cooperation with the accounting auditor. Based on these audits, at the Audit & Supervisor Committee, they share information regarding the status of implementation and results of the audits and exchange opinions.

Audit & Supervisory Committee and the Company’s accounting auditors work in close collaboration to enhance the efficiency and effectiveness of their respective audits. In addition to the regular meetings held several times each year, they meet on an ad hoc basis, endeavoring to mutually ensure appropriateness and credibility of performance of their duties. This is achieved through such measures as briefing, consultation or inquiries, and confirmation on matters that require special attention, regarding the annual audit plans and site audit plans (including audits of consolidated subsidiaries) prepared at the beginning of each fiscal year.

Further, Audit & Supervisory Committee works in close collaboration with the Internal Audit Department under the direct control of the committee to enhance the efficiency and effectiveness of their respective audits. Audit & Supervisory Committee Members receive and confirm copies of the audit notification stating such matters as the schedule, subject, purpose, method and other matters of the relevant audit which is given from the Internal Audit Department whenever they implement an audit pursuant to the annual audit plan. After completion of the audit, Audit & Supervisory Committee Members receive explanations concerning matters pointed out and status of implementation of improvement by way of the report on implementation of internal audits, based on which mutual exchange of opinions is conducted between Audit & Supervisory Committee Members and the Internal Audit Department personnel.

In order to ensure transparency and objectivity in appointing Directors and Executive Officers, and determining remuneration for them, the Company has established two advisory bodies of the Board of Directors, the Nomination Advisory Committee and Compensation Advisory Committee, each with the chairperson and majority of the members  being independent Outside Directors. The chairperson and members of each such committee are appointed by the Board of Directors.

<Members of main organs> 

Remuneration for Directors is designed in such a manner that values can be shared with the shareholders and the level is appropriate for their duties, with due consideration given to incentives for continued improvement of corporate performance as well as to securing talented human resources.

In order to ensure transparency and objectivity regarding the remuneration for Directors, as remuneration for Directors who are not Audit & Supervisory Committee Members, the total amount of monthly "fixed compensation" and "bonuses" are determined by resolution of the Board of Directors, in line with a review by the Compensation Advisory Committee and within the ranges approved by a general meeting of shareholders, and the authority for the determination of individual amount is delegated to President in order to enable flexible decision-making regarding remuneration. When such delegation is accepted, President shall make a decision based on the content confirmed by the Compensation Advisory Committee.
As to the "stock compensation," a certain number of shares of the Company are allotted according to the number of points calculated in accordance with the Share Distribution Regulations, which are confirmed by the Compensation Advisory Committee and determined by the Board of Directors.
Remuneration for Directors who are Audit & Supervisory Committee Members is determined by consultation among the Audit & Supervisory Committee Members within the ranges approved by a general meeting of shareholders.

・The target indicators for "stock compensation" are the consolidated ROE, the operating income (both before goodwill
   amortization) and the net sales of new business domains set in the performance targets in the 2023 Medium-Term
   Management Plan. Based on the degree of achievement toward those targets, the number of shares to be allotted
   is determined according to the  number of points given at a certain fixed time stipulated in the "Share Distribution
   Regulations".
・Remuneration for Directors who are Audit & Supervisory Committee Members and Outside Directors consist only of
   "fixed compensation."
 

The remuneration for Directors and Audit & Supervisory Board Members ("A&SB Members") for the fiscal year ended March 31, 2021 is as follows:

1. The Company transitioned to a Company with Audit & Supervisory Committee" by the resolution of 74th Ordinary
    General Meeting of Shareholders held on June 26, 2020.
2. The amounts paid to Directors do not include employee salary portions for Directors who have concurrent
    responsibilities as employees.

Policy for Training of Directors

It is the Company’s basic policy to appropriately provide each Director with such training opportunities as are necessary for them to fulfill their respective roles and responsibilities, regularly or as necessary. Directors endeavor to acquire, update and deepen necessary knowledge by participating in in-house training or seminars by TSE, lawyers, specialists of various fields and external organizations, etc. Opportunities are also provided for Outside Directors to deepen knowledge and understanding regarding the business, finance, organizations and other matters of the Group through participating in factory tours and site visits, etc. of the Company and its subsidiaries.

Corporate Governance Report

 

Evaluation on Effectiveness of the Board of Directors