Corporate Governance

Latest Update : Apr.1, 2018

Outside Directors, Compensation for Directors, etc.

Internal Audits, Audits by Audit & Supervisory Board Members and Accounting Audits

Internal audits are conducted by the Internal Auditing Office (5 peoples). Internal audits are designed to correct nonconforming or inappropriate operational procedures and improve the quality and efficiency of operations in accordance with internal audit regulations.
The Audit & Supervisory Board is comprised of four members (two standing audit & supervisory board members and two audit & supervisory board members), three of which are Outside Audit & Supervisory Board Members. The audit & supervisory board members, working in line with the audit policy laid down by the Audit & Supervisory Board, attend Board of Directors' meetings and other key meetings. They also work to audit domestic offices and MinebeaMitsumi group companies, to conduct hearing from directors and executive officers, as well as to audit the activities of the directors through an inspection of business operations and assets.

The Audit & Supervisory Board meets regularly with the Internal Auditing Office to hear its annual auditing schedule, its purposes and all of these auditing results. When the Office conducts its internal auditing, the Audit & Supervisory Board Members discuss its purposes and focus beforehand, and attend these auditing if necessary. The Audit & Supervisory Board also meets with MinebeaMitsumi's independent auditor, KPMG AZSA LLC, to confirm information regarding the performance of audit systems, plans and implementation, as well as to exchange information and opinions. In witnessing the financial audits of domestic offices and MinebeaMitsumi group companies, the Board is also able to get a clear picture of MinebeaMitsumi's financial status on a regular basis.

Financial audits are conducted by KPMG AZSA LLC on the basis of an audit contract with MinebeaMitsumi and pursuant to the Companies Act and the Financial Instruments and Exchange Law. Audit of MinebeaMitsumi was performed by certified public accountants, Mr. Toshihiro Otsuka, Mr. Noriaki Nomura, and Mr. Takuju Kamiyama, who were assisted by 10 other certified public accountants, 3 US certified public accountants and 16 others.
The Audit & Supervisory Board reviews the details of the audit contract and compensation packages for the financial auditors to ensure the integrity of the auditing process by verifying the independence of the audit company.
The Audit & Supervisory Board Members, Internal Auditing Office, Independent Auditors and Outside Directors share information and opinions by regularly holding liaison meetings, etc. so that they can cooperate with each other. In addition, the Internal Control Division regularly checks the situation by accompanying audits executed by the Independent Auditors with the Audit & Supervisory Board Members, etc., and shares information and opinions as appropriate.

Outside Directors and Outside Audit & Supervisory Board Members

MinebeaMitsumi appoints those who are highly unlikely to have any conflict of interest with general shareholders as Outside Directors and Outside Auditor & Supervisory Board Members in light of the independence requirements of financial instruments exchanges.

Fulfilling their roles and functions, Outside Directors will employ their wealth of business as well as legal knowledge and insights to provide the guidance needed to ensure the sound management of the Company, promote compliance, and strengthen management oversight functions.

One of MinebeaMitsumi's two Outside Directors is Mr. Kohshi Murakami. Mr. Murakami has built up a strong foundation of legal expertise over his long career as a judge as well as an attorney and serves in a supervisory role independent from management. There are no conflicts of interest existing between him and the Company, including personal, investment or trade relationships. He has been deemed to be completely independent and since it is highly unlikely that any conflict of interest between him and the shareholders will arise, MinebeaMitsumi has registered him as an Outside Director. Also, as Independent Lead Director, Mr. Murakami participates in discussion of compensation for directors together with the President and Chief Executive Officer, and Chief Audit & Supervisory Board Member and contributes to enhance objectivity of compensation etc.

MinebeaMitsumi's another Outside Director, Mr. Takashi Matsuoka, is executive vice president of Keiaisha Co., Ltd. and owns 93,000 shares of MinebeaMitsumi stock. Keiaisha owns 10,100,000 shares of MinebeaMitsumi stock while MinebeaMitsumi owns 1,183,000 shares of Keiaisha stock. Keiaisha does business with us on a regular basis as a supplier of machinery and equipment, components and grease and other materials, etc. Its sales to MinebeaMitsumi totaled 3,146 million yen during this past fiscal year, which accounted for only a minor portion of our overall business transactions. Other than mentioned above, there are no conflicts of interest existing between him and MinebeaMitsumi, including personal, investment or trade relationships. He has been deemed to be completely independent and since it is highly unlikely that any conflict of interest between him and the shareholders will arise, MinebeaMitsumi has registered him as an Outside Director.

We believe the Outside Audit & Supervisory Board Members, in fulfilling their roles and functions, will harness their legal, accounting, and tax accounting expertise, as well as vast professional knowledge of finance and accounting to provide strict management oversight.

As a Standing Outside Audit & Supervisory Board Member, Mr. Kazuyoshi Tokimaru brings years of banking, finance, compliance and internal audit experience he gained at the Sumitomo Mitsui Trust Bank, Limited, which is one of our major banks. We believe he uses the expertise and insight he developed over the course of his career to fulfill his role as an auditor independent from management. Since he has retired from the bank in June 2015, he is not in a position to receive the influence of the bank. Further, it is highly unlikely that any conflict of interest between him and the shareholders will arise. While the amount we finance from the bank makes up about 31% of all our financing, we do business with many other banks and therefore it is highly unlikely that the bank could influence our decision-making process. Although the bank owns 15,413,000 shares of MinebeaMitsumi stock, it does not fall under the definition of "major shareholder" specified in the Financial Instruments and Exchange Act and does not exercise control over MinebeaMitsumi. MinebeaMitsumi owns shares of the Sumitomo Mitsui Trust Bank's common stock, but these shares account for only a minor percentage of all issued shares. Other than mentioned above, there are no conflicts of interest existing between him and MinebeaMitsumi, including personal, investment or trade relationships. He has been deemed to be completely independent and since it is highly unlikely that any conflict of interest between him and the shareholders will arise, MinebeaMitsumi has registered him as an Outside Director.

As a licensed accountant, Outside Audit & Supervisory Board Member, Mr. Hisayoshi Rikuna, is well versed in accounting and tax matters. He serves in a supervisory role independent from management using the expertise and professional knowledge he has gained over the course of his career. His appointment poses no conflict of interest with MinebeaMitsumi, including personal, investment or trade relationships. He has been deemed to be completely independent and since it is highly unlikely that any conflict of interest between him and the shareholders will arise, MinebeaMitsumi has registered him as an Outside Director.

As an attorney, Outside Audit & Supervisory Board Member, Mr. Shinichiro Shibasaki, is familiar with corporate legal affairs and serves in a supervisory role independent from management. There are no conflicts of interest existing between him and MinebeaMitsumi, including personal, investment or trade relationships. He has been deemed to be completely independent and since it is highly unlikely that any conflict of interest between him and the shareholders will arise, MinebeaMitsumi has registered him as an independent auditor.

Further, Outside Directors are communicating and exchanging views, etc. by holding a regular liaison council with the Audit & Supervisory Board Members, the Internal Auditing Office and the Accounting Auditor.

Compensation for Directors and Audit & Supervisory Board Members

Regarding compensation for directors and audit & supervisory board members, limits for directors and audit & supervisory board members as a group have been set by the resolution of the general shareholders meeting.

Directors' compensation packages consists of the basic compensation, which is paid in a fixed amount on a monthly basis, a bonus based on the Company's performance for a given year, and stock options which was resolved and introduced at the 66th Ordinary General Meeting of Shareholders held on June 28, 2012. Each Director's compensation package is determined by a resolution passed by the Board of Directors according to his functions, performance, the performance of the Company, and other factors. In the case of Outside Directors, compensation packages are determined according to their professional backgrounds and other factors. The stock option is not offered to Outside Directors.

Audit & Supervisory Board Members' compensation packages consist solely of the basic compensation, which is paid in a fixed amount on a monthly basis. Each Audit & Supervisory Board Member's compensation package is determined by the Audit & Supervisory Board Members.

The followings are total compensations for directors, audit & supervisory board members, Outside Directors and Outside Audit & Supervisory Board Members combined for this fiscal year.

  Total Compensation
(thousand yen)
Total for each class of compensation
(thousand yen)
Number of persons in each class
Basic compensation Bonus Stock Options
Directors
(excluding Outside Directors)
492,471 312,471 180,000 - 10
Audit & Supervisory Board Members
(excluding Outside Audit & Supervisory Board Members)
15,751 15,751 - - 1
Outside Directors and Outside Audit & Supervisory Board Members combined 51,436 51,436 - - 5
Total 559,658 379,658 180,000 - 16
Notes:
  1. The above figures include compensation paid to Mr. Hiroharu Katogi and Mr. Hiroyuki Yajima, who retired as MinebeaMitsumi's director as of the end of the 70th Ordinary General Meeting of Shareholders held on June 29, 2016.
  2. The compensation amount paid to directors does not include employee wages paid to directors who also held employee status.
  3. The 71st Ordinary General Meeting of Shareholders held on June 29, 2017, resolved that total compensation to directors would be capped at 1.5 billion yen annually (including total 50 million yen for Outside Directors). In addition, the 66th Ordinary General Meeting of Shareholders held on June 28, 2012, resolved to grant to directors (excluding outside directors) remunerations for stock options amounting up to 30 million yen per annum, which is within the amount prescribed as the annual remuneration for the Directors.
  4. The 61st Ordinary General Meeting of Shareholders held on June 28, 2007, resolved that total compensation for audit & supervisory board members would be capped at 100 million yen annually.
  5. The compensation figures above include 180,000 thousand yen of the allowance for bonuses to Directors accounted for this fiscal year.
  6. The compensation figures above have been rounded down to the nearest 1,000 yen.

An individual whose total compensation exceeds 100 million yen is as follows.

Name Position Company Total for each class of compensation
(thousand yen)
Total Compensation
(thousand yen)
Basic compensation Bonus Stock Options
Yoshihisa Kainuma Director MinebeaMitsumi 99,749 48,000 - 147,749

Limiting Liability of Directors and Audit & Supervisory Board Members

Pursuant to Companies Act Article 426, Paragraph 1, MinebeaMitsumi stipulates in its Articles of Incorporation that the Board of Directors has the authority to limit liability of Directors and Audit & Supervisory Board Members (including former Directors and Audit & Supervisory Board Members) for compensation of damages for acts defined in Companies Act Article 423, Paragraph 1. This is in order to create an environment in which Directors and Audit & Supervisory Board Members perform their full capacity to carry out the duties which are expected of them.

Content and Summary of Contracts Limiting Liability

A contract pursuant to Companies Act Article 427, Paragraph 1, is in force between Directors (excluding Executive Directors, etc.), Audit & Supervisory Board Members and MinebeaMitsumi. This contract limits compensation for damages detailed in Companies Act, Article 423, Paragraph 1. The maximum amount of compensation for damages based on this contract is prescribed by law. In addition, these limitations on liability are limited to situations when Directors (excluding Executive Directors, etc.) and Audit & Supervisory Board Members' duties which are the cause of the liability are well intentioned and lacking in negligence.

Equity holding

Total number of companies and amounts on the balance sheet of equity holdings which are not for pure investment

12 companies   5,633 million yen

Equity holdings of listed shares not for pure investment

(As of March 31, 2016)
Specified Investment Shares

Companies Number of shares Amount on B/S
(million yen)
(Purpose of holding)
Sumitomo Mitsui Trust Holdings, Inc. 3,084,854 1,016 To maintain better business relationship related to the financial transactions of our Group
Mitsubishi UFJ Financial Group, Inc. 2,189,700 1,141 To maintain better business relationship related to the financial transactions of our Group
Sumitomo Mitsui Financial Group, Inc. 141,740 483 To maintain better business relationship related to the financial transactions of our Group
The Hachijuni Bank, Ltd. 500,000 242 To maintain better business relationship related to the financial transactions of our Group
Mizuho Financial Group, Inc. 300,350 50 To maintain better business relationship related to the financial transactions of our Group
Nippon Steel & Sumitomo Metal Corporation 18,375 39 To maintain better business relationship related to the productive transactions of our Group

Regarded as Holding Shares
There is no corresponding item.

(As of March 31, 2017)
Specified Investment Shares

Companies Number of shares Amount on B/S
(million yen)
(Purpose of holding)
Sumitomo Mitsui Trust Holdings, Inc. 308,485 1,190 To maintain better business relationship related to the financial transactions of our Group
Mitsubishi UFJ Financial Group, Inc. 2,189,700 1,532 To maintain better business relationship related to the financial transactions of our Group
Sumitomo Mitsui Financial Group, Inc. 141,740 573 To maintain better business relationship related to the financial transactions of our Group
Iwasaki Electric Co., Ltd. 3,000,000 513 To maintain better business relationship related to the productive transactions of our Group
The Hachijuni Bank, Ltd. 500,000 314 To maintain better business relationship related to the financial transactions of our Group
Mizuho Financial Group, Inc. 300,350 61 To maintain better business relationship related to the financial transactions of our Group
Nippon Steel & Sumitomo Metal Corporation 18,375 47 To maintain better business relationship related to the productive transactions of our Group

Regarded as Holding Shares
There is no corresponding item.

Equity holdings of shares for pure investment (amount on B/S, dividends, or gains/losses on disposal or evaluation)

There is no corresponding item.

Change in purpose of equity holdings of shares from pure investment to othersThere is no corresponding item.

There is no corresponding item.

Change in purpose of equity holdings of shares from others to pure investmentThere is no corresponding item.

There is no corresponding item.

Compensation for Independent Auditors

Classification Previous consolidated fiscal year This consolidated fiscal year
Compensation for certification services
(in millions of yen)
Compensation for non-auditing services
(in millions of yen)
Compensation for certification services
(in millions of yen)
Compensation for non-auditing services
(in millions of yen)
Audited Company 195 46 158 -
Consolidated subsidiaries 22 - 49 -
Total 217 46 207 -

Other Compensation

(During the previous fiscal year)
Our consolidated subsidiary, NMB-Minebea Thai Ltd. paid 96 million yen to KPMG Phoomchai Audit Ltd., which belongs to the same KPMG network as KPMG AZSA LLC, as compensation for certification services. NMB (USA) Inc. paid 163 million yen to KPMG LLP as compensation for certification services. Minebea Electronics & Hi-Tech Components (Shanghai) Ltd. paid 31 million yen to KPMG Huazhen as compensation for certification services. NMB-Minebea-GmbH paid 9 million yen to KPMG AG Wirtschaftsprufungsgesellschaft as compensation for certification services. Minebea (Cambodia) Co., Ltd. paid 4 million yen to KPMG Cambodia Ltd. as compensation for certification services.

(During this fiscal year)
Our consolidated subsidiary, NMB-Minebea Thai Ltd. paid 85 million yen to KPMG Phoomchai Audit Ltd., which belongs to the same KPMG network as KPMG AZSA LLC, as compensation for certification services. NMB (USA) Inc. paid 117 million yen to KPMG LLP as compensation for certification services. Minebea Electronics & Hi-Tech Components (Shanghai) Ltd. paid 28 million yen to KPMG Huazhen as compensation for certification services. NMB-Minebea-GmbH paid 9 million yen to KPMG AG Wirtschaftsprufungsgesellschaft as compensation for certification services. Minebea (Cambodia) Co., Ltd. paid 4 million yen to KPMG Cambodia Ltd. as compensation for certification services.

Non-auditing Services Provided by Independent Auditors

(During the previous fiscal year)
We provided compensation to Independent Auditors for non-auditing services including advisory services related to tax and accounting due diligence.

(During this fiscal year)
The Group has no non-auditing services provided by auditors.

Policy on Determining Compensation for Independent Auditors

The Group has no policy for determining compensation for auditors.

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