Corporate Governance

Latest Update : Aug.10, 2018

Directors

Directors

The Company makes rapid and highly strategic management judgments by eleven Directors. At the same time, the Company makes significant transfer of the authority for business execution from Directors to Executive Officers by introducing an Executive Officer execution from Directors to Executive Officers by introducing an Executive Officer System to facilitate a clear distinction between management and supervisory functions and business executing functions. Moreover, aimed at obtaining advice on all aspects of our corporate management and strengthening the Board of Director's functions to supervise the organizations of execution, we include three Outside Directors out of the eleven Board members.

Furthermore, regarding the Audit & Supervisory Board Members, in order to strengthen and enhance its auditing functions, we have three Outside Audit & Supervisory Board Members (including one full-time Outside Audit & Supervisory Board Member) out of the four Audit & Supervisory Board members. In addition to holding the Audit & Supervisory Board and attending the Board of Directors' meetings and other important meetings, the Audit & Supervisory Board Members, in conjunction with the Independent Auditors, and the Internal Audit Office, audit domestic offices and our Group Companies, to audit the Directors' execution of duties.

Board of Directors (link to Company webpage)

Nomination Policies and Procedure for Members of the Board

When nominating Director candidates, we holistically conduct reviews from the perspective of assigning the right person to the right position, considering accurate and swift decision making, appropriate risk management, supervision of business execution and capabilities for managing each function and each business division of the Company.

In addition, when nominating Audit & Supervisory Board Member candidates, we gain consent of the Audit & Supervisory Board upon electing a candidate after having holistically conducted reviews with consideration placed on financial and accounting expertise, knowledge of the Company's business fields and know-how in risk management and corporate management.

Based on the above policy, a resolution is passed by the Board of Directors after discussions held between the President and Executive Officer and the Executive Officer in charge of Human Resources and deliberations by the Senior Executive Officer Council.

Outside Directors and Outside Audit & Supervisory Board Members

Criteria for appointment and independence

We appoint Outside Director and Outside Audit & Supervisory Board Member who has no personal, capital or business relationship or any other interest with the company and who has sufficient independence and is unlikely to cause a conflict of interest with general shareholders in accordance with the independence standards set forth by the Tokyo Stock Exchange.

Outside Directors election reason and record of attendance (Year ended March 2017)

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.

Name Independent
director
Reason for appointment Status of attendance
Kohshi Murakami
appointed in June 2008
Mr. Murakami has a wealth of experience and keen insight
as a former Presiding Justice of the Division of the Tokyo
High Court and as an attorney-at-law. He selected to ensure
the sound management of the Company and promote compliance.
Board of Directors Meeting
100%
(13/13)
Atsuko Matsumura
appointed in June 2018
Ms. Matsumura has expertise in economics as a professor,
Faculty of Economics, Tokyo International University
(holding concurrent posts: part-time lecturer of Department of
Social and Family Economy, Faculty of Human Sciences and Design,
Japan Women's University and part-time lecturer of Department
of Politics, Faculty of Law, Keio University) as well as broad
knowledge and experience as an educator. We elects her as
Outside Director so that her abundant knowledge and experience
will be reflected in the management of the Company.
Takashi Matsuoka
appointed in June 2005
Mr. Matsuoka has been in charge of the Planning Division, etc.
of KEIAISHA Co., Ltd. for many years, and he has broad insight
and experience in business operation. He has properly performed
the duties of an Outside Director of the Company by proactively
participating in discussions at the Board of Directors meetings
in this position since 2005.
The Company has conducted constant commercial transactions with
KEIAISHA Co., Ltd. where Mr. Takashi Matsuoka serves as Director
and Vice President Executive Officer, including purchase of
machinery and equipment, components and grease and other
materials from the said company. However, because the value
of transactions with the said company is insignificant in terms of
transaction size of the Company and there is no possibility that
these transactions affect decision-making of the Company.
Board of Directors Meeting
100%
(13/13)

Outside Audit & Supervisory Board Member election reason and record of attendance (Year ended March 2017)

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.

Name Independent
director
Reason for appointment Status of attendance
Kazuyoshi Tokimaru
appointed in June 2015
Mr. 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, he is appointed as outside auditor.
Since he has retired from the bank in June 2015, he is not in a
position to receive the influence of the bank.
In addition to the bank, the Company has transactions with
multiple financial institutions, so there is no danger that the
bank will have an impact on our decision-making.

Board of Directors Meeting
100%
(13/13)

Audit & Supervisory Board
100%
(15/15)

Hisayoshi Rikuna
appointed in June 2011
As a licensed accountant, Outside Audit & Supervisory
Board Member, Mr. 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.

Board of Directors Meeting
100%
(13/13)

Audit & Supervisory Board
100%
(15/15)

Shinichiro Shibasaki
appointed in June 2014
Mr. Shibasaki is well-versed in corporate legal affairs
as an attorney-at-law. We elect him as Outside Audit &
Supervisory Board Member so that his professional knowledge
will be reflected in the Company's audit.

Board of Directors Meeting
100%
(13/13)

Audit & Supervisory Board
100%
(15/15)

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.

Policy and procedure for reward decision of a director and an auditor

Directors' compensation

It consists of a performance-linked incentives compensation which was introduced in 2017, as well as stock options in addition to the basic compensation which is paid on a monthly basis, and performance-linked bonuses which are determined according to the performance of each business year.

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.

Performance-linked bonuses are structured to reflect the Company's performance, job responsibilities, and performance. Payment standards are determined based on the bonus calculation table, which is based on the consolidated result and stock price levels for each fiscal year.

The amount of performance-linked incentive compensation is determined based on the degree of achievement of the medium-term plan aimed at "1 trillion yen in net sales and/or 100 billion yen in operating income" in the fiscal year ending March 31, 2021.

In the case of Outside Directors, compensation packages are determined according to their professional backgrounds and other factors. The performance-linked incentives compensation system and stock option are not offered to Outside Directors.

Based on the above policy, the compensation of Directors is approved by resolution of the Board of Directors within the scope of 1,500 million yen, as authorized by the General Meeting of Shareholders, after discussions involving the President and Executive Officer, Head Outside Director and Head Audit & Supervisory Board Member.

Audit & Supervisory Board Members' compensation

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.

Based on the above policy, the compensation of Audit & Supervisory Board Members is determined by discussions of the Audit & Supervisory Board within the scope of 100 million yen, as authorized by the General Meeting of Shareholders.

Total compensations for directors, audit & supervisory board members, Outside Directors and Outside Audit & Supervisory Board Members combined for March 31, 2018

Categories Number of
payees
Amount of remuneration, etc. (thousand yen)
Total Basic
remuneration
Bonuses Stock
Options
Directors Directors other than
the following
12 959,771 292,920 666,851
Outside Directors 2 17,026 17,026
Total 14 976,797 309,946 666,851
             
Audit &
Supervisory Board Members
Directors other
than the following
1 16,456 16,456
Outside Audit &
Supervisory Board
Members
3 35,340 35,340
Total 4 51,796 51,796
             
Total 18 1,028,593 361,742 666,851

Notes:

  1. The above table includes amounts paid to two directors, who retired from the position as Director at the conclusion of the 71st Ordinary General Meeting of Shareholders held on June 29, 2017.
  2. The remuneration for Directors excludes the salary to be paid for service as officer or employee for Directors who concurrently hold a post of officer or employee of the Company.
  3. The Company resolved that the maximum annual remuneration for Directors shall be not more than 1.5 billion yen (this amount includes maximum annual remuneration of 50 million yen for Outside Directors) at the 71st Ordinary General Meeting of Shareholders held on June 29, 2017. Furthermore, the Company resolved at the 66th Ordinary General Meeting of Shareholders held on June 28, 2012 that the Company may grant stock-based compensation stock options of up to 30 million yen per annum, within the limits of the above remuneration amount, to Directors of the Company (excluding Outside Directors).
  4. During the fiscal year under review, 648 million yen in accrued bonuses for directors was posted, including anticipated payments under the performance-linked incentives remuneration system introduced in 2017.
  5. The Company resolved that the maximum annual remuneration for Audit & Supervisory Board Members shall be not more than 100 million yen at the 61st Ordinary General Meeting of Shareholders held on June 28, 2017.
  6. The amount of remuneration, etc. is shown with fractions of 1 thousand yen rounded off.

An individual whose total compensation exceeds 100 million yen (for the fiscal year ended March 31, 2018)

Name Position Company Total for each class of remuneration
(thousand yen)
Total remuneration
(thousand yen)
Basic
remuneration
Bonuses Stock
Options
Yoshihisa Kainuma Director MinebeaMitsumi 101,503 133,000 234,503

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