Corporate Governance

Latest Update : Aug.20, 2021

Officers

Directors and Audit & Supervisory Board Members

The Company makes rapid and highly strategic management judgments by 12 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 System to facilitate a clear distinction between management and supervisory functions and business executing functions. The Company's basic policy calls for the appointment of Directors that have the necessary knowledge, experience, and international outlook, regardless of their nationality, ethnicity, or gender, with an emphasis on the diversity of the Board of Directors.

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 four Outside Directors out of the 12 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 Auditing Office, audit domestic offices and our Group Companies, to audit the Directors' execution of duties.

Board of Directors (link to Company webpage)

Policy and Procedures for Appointment and Dismissal of Executive Management and Nomination of Director and Audit & Supervisory Board Member Candidates

When appointing Executive Management (indicating representative directors and executive directors; hereinafter the same shall apply) and nominating Internal Director candidates, the Board of Directors gives final approval after deliberations by the Senior Executive Officer Council based on the report given by the Nomination and Compensation Committee on whether the candidate is qualified for the position 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.

If the execution of duties of Executive Management significantly fails to meet the qualifications in the above appointment criteria, dismissal will be deliberated on by the Nomination and Compensation Committee and the Board of Directors will make a decision based on the report of these deliberations.

As for the nomination of Outside Director candidates, the Board of Directors gives final approval based on the report given by the Nomination and Compensation Committee on whether the candidate is qualified for the position, based on a holistic assessment of the candidate's advanced expertise in corporate management, corporate governance, compliance, risk management, etc., following the criteria for determining independence.

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

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 requirements prescribed in the Companies Act and the independence standards set forth by the Tokyo Stock Exchange.

Overview of Outside Directors election reason and expected roles / record of attendance at Important Meeting (Year ended March 2021)

Fulfilling their roles and functions, we believe the Outside Directors will ensure the sound management of the Company, promote compliance, and strengthen management oversight functions.

Name Independent
Director
Overview of Outside Directors election reason and expected roles / record of attendance at Important Meeting
Leading Independent Outside Director

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. Since June 2008, he has been playing an appropriate role as Outside Director. We expect him to provide supervision and advice by utilizing his experience and insight. Although he has been in office for more than 10 years, he has no personal, capital, business or other interests with the Company, and the Company receives management supervision and advice from an independent standpoint.

(Status of attendance of Important Meeting for the Year ended March 2021)

  • Board of Directors Meeting 100% (12/12)
  • Nomination and Compensation Committee 100% (6/6)
  • Compliance Committee 100% (2/2)
Outside Director

Atsuko Matsumura

appointed in June 2018
Ms. Matsumura has expertise in international economics, as well as broad knowledge and experience as an educator. Since June 2018, she has been playing an appropriate role as Outside Director. We expect her to provide supervision and advice by utilizing her experience and insight.

(Status of attendance of Important Meeting for the Year ended March 2021)

  • Board of Directors Meeting 100% (12/12)
  • Nomination and Compensation Committee 100% (6/6)
Outside Director

Yuko Haga

appointed in June 2020
Ms. Haga has expertise in corporate strategy as well as broad knowledge and experience accumulated as a management consultant. Since June 2020, she has been playing an appropriate role as Outside Director. We expect her to provide supervision and advice by utilizing her experience and insight.

(Status of attendance of Important Meeting for the Year ended March 2021)

  • Board of Directors Meeting 100% (10/10)
Outside Director

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. Since June 2005, he has been playing an appropriate role as Outside Director. We expect him to provide supervision and advice by utilizing his experience and insight. Although he has been in office for more than 10 years, he has no personal, capital, business or other interests with the Company, and the Company receives management supervision and advice from an independent standpoint.
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 KEIAISHA Co., Ltd. is insignificant in terms of transaction size of the Company, we have concluded that there is no possibility that these transactions affect decision-making of the Company.

(Status of attendance of Important Meeting for the Year ended March 2021)

  • Board of Directors Meeting 100% (12/12)
Outside Directors in Roundtable Discussion

Outside Audit & Supervisory Board Member election reason and record of attendance at Important Meeting (Year ended March 2021)

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

Name Independent
Director
Reason for appointment
Status of attendance at Important Meeting
Full-time Outside Audit & Supervisory Board Member

Koichi Yoshino

appointed in June 2019
Mr. Yoshino has a wealth of overseas experience and practical management experience at a general trading company and in the manufacturing industry, as well as a qualification as a Certified Internal Auditor and considerable knowledge of finance and accounting. He was elected as Outside Audit & Supervisory Board Member so that his abundant experience and broad knowledge reflected in audits of the Company.

(Status of attendance of Important Meeting for the Year ended March 2021)

  • Board of Directors Meeting 100% (12/12)
  • Audit & Supervisory Board Meeting 100% (16/16)
Outside Audit & Supervisory Board Member

Shinichiro Shibasaki

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

(Status of attendance of Important Meeting for the Year ended March 2021)

  • Board of Directors Meeting 100% (12/12)
  • Audit & Supervisory Board Meeting 100% (16/16)
  • Nomination and Compensation Committee 100% (6/6)
Outside Audit & Supervisory Board Member

Makoto Hoshino

appointed in June 2019
Mr. Hoshino has a wealth of experience of tax operations for many years since joining the National Tax Agency, as well as considerable knowledge of finance and accounting. He was elected as Outside Audit & Supervisory Board Member so that his abundant experience and keen insight reflected in audits of the Company.

(Status of attendance of Important Meeting for the Year ended March 2021)

  • Board of Directors Meeting 100% (12/12)
  • Audit & Supervisory Board Meeting 100% (16/16)

Compensation for Directors and Audit & Supervisory Board Members

In order to enhance the transparency and objectivity of processes for determining the remuneration of Directors, the Company has established a Nomination and Compensation Committee, which has an independent Outside Director as Chairman, and independent Outside Directors comprising at least half of its members. The remuneration to Directors is determined by a resolution of the Board of Directors after deliberation by the Nomination and Compensation Committee, based on the following remuneration composition and calculation methods and within the maximum amount authorized by the General Meeting of Shareholders.

Policy and Procedures for Determination of Director and Auditor & Supervisory Board Member's Compensation

Executive Management and Directors' Compensation

The compensation for Executive Management consists of a performance-linked a performance-linked monetary compensation and a performance-linked stock compensation which are determined according to the performance in each business year, in addition to the basic compensation which is paid on a monthly basis. Basic compensation is determined by a resolution passed by the Board of Directors according to his functions, performance, the performance of the Company, and other factors.

Among performance-linked monetary compensation, performance-linked bonuses are structured to reflect the Company's performance, job responsibilities, and performance. The payment amounts 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 Business Plan aimed at "one trillion yen in net sales and 100 billion yen in operating income".

The Company determines the points we award to each Director according to his/her degree of contribution to business performance for performance-linked stock compensation. We then issue the number of shares in the Company equivalent to the said number of points when each Director retires.

The compensation for Outside Directors is determined according to their professional backgrounds and other factors. The performance-linked monetary compensation system and performance-lined stock compensation system are not offered to Outside Directors.

Based on the above policy, the compensation for Executive Management and Directors is approved by resolution of the Board of Directors based on deliberations held by the Nomination and Compensation Committee comprised of more than half independent Outside Directors.

Compensation for Audit & Supervisory Board Members

The compensation for Audit & Supervisory Board Members consists solely of the basic compensation, which is paid in a fixed amount on a monthly basis, and is determined by discussions of the Audit & Supervisory Board, within the maximum amount of compensation, as authorized by the General Meeting of Shareholders.

Resolution date of the General Meeting of Shareholders regarding compensation for Directors Audit & Supervisory Board Members
Categories Resolution date Compensation categories Resolution content Number of members at the time of resolution
Director June 29, 2017
The 71st Ordinary General Meeting of Shareholders
Basic compensation
performance-linked monetary compensation
Within 1.5 billion yen per year
(this amount includes maximum annual compensation of 50 million yen for Outside Directors)
12
(including two Outside Director)
Director
(excluding Outside Director)
June 28, 2012
The 66th Ordinary General Meeting of Shareholders
Stock options Within the above compensation amount, within 30 million yen per year 8
Director
(excluding Outside Director)
June 26, 2020
The 74th Ordinary General Meeting of Shareholders
Performance-linked stock compensation In addition to the above compensation amount, within 100,000 points per fiscal year 8
Audit & Supervisory Board Member June 28, 2007
The 61st Ordinary General Meeting of Shareholders
Basic compensation Within 100 million yen per year 5
Main activities of the Board of Directors and the Nomination and Compensation Committee on the decision process for Directors' Compensation during the fiscal year and Outline of the committee procedure

The Nomination and Compensation Committee was held six times in the fiscal year ended March 31, 2020. It has discussed proposals of bonuses and changes to the basic compensation for Directors in light of the Company's consolidated performance and stock price level for previous fiscal year, and then the committee has made reports to the Board of Directors.

In response to the report from the above Nomination and Compensation Committee, the Board of Directors meeting on May 31, 2019 has decided to provide bonuses to directors, and the Board of Directors meeting on June 27, 2019 has decided to revise the basic compensation.

The Nomination and Compensation Committee consists of four members (chaired by Independent Outside Director): two Independent Outside Directors, one Independent Outside Audit & Supervisory Board Member and one Representative Director. The resolution of the committee shall be made by a majority of the members present at the committee where the majority of the members are present.

As of June 26, 2020, the Nomination and Compensation Committee consists of five members (chaired by Independent Outside Director): three Independent Outside Directors, one Independent Outside Auditor & Supervisory Board Member and one Representative Director.

Total compensations for Directors, Audit & Supervisory Board Members, Outside Directors and Outside Audit & Supervisory Board Members combined for March 31, 2020

Categories Number of payees Amount of compensation, etc. (thousand yen)
Total Basic compensation Performance-linked monetary compensation Stock options
Directors Directors other than the following 8 596,654 276,804 319,850 -
Outside directors 3 32,610 32,610 - -
Total 11 629,264 309,414 319,850 -
             
Audit & supervisory board members Audit & supervisory board members other than the following 2 15,910 15,910 - -
Outside audit & supervisory board members 5 34,274 34,274 - -
Total 7 50,185 50,185 - -
             
Total 18 679,449 359,599 319,850 -

Notes:

  1. The above table includes amounts paid to three members, who retired from the position as Audit & Supervisory Board Member at the conclusion of the 73rd Ordinary General Meeting of Shareholders held on June 27, 2019.
  2. The compensation for Directors excludes the salary to be paid for service as employee for Directors who concurrently hold a post of officer or employee of the Company.
  3. The amount of compensation, etc. is shown with fractions of 1 thousand yen rounded down.

Total compensation exceeds 100 million yen (for the fiscal year ended March 31, 2020)

Name Total for each class of compensation
(thousand yen)
Total compensation
(thousand yen)
Basic
compensation
Performance-linked
monetary compensation
Stock
options
Yoshihisa Kainuma 92,156 117,400 - 209,556

Guidelines on Ownership of MinebeaMitsumi Shares

The Company has established "Guidelines on Ownership of MinebeaMitsumi Shares" for Directors (excluding Outside Directors). By holding the Company's shares, Directors are encouraged to deepen the sustainable sharing of interests with shareholders, and strive to further improve corporate value by improving business performance from the perspective of shareholders and increase the motivation and morale to raise the market value of shares.

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