When nominating directors who are not members of the Audit and Supervisory Committee, the representative director— the individual in a Japanese company who has the company seal and represents it in transactions—will submit the proposed names and, to ensure transparency, explain to the independent outside director members of the Audit and Supervisory Committee the reasons for having selected, and suitability of, nominees. Directors shall be nominated by the Board of Directors, which will take into consideration the opinions of outside directors. When nominating directors who are members of the Audit and Supervisory Committee, the representative director will submit a list of proposed names and, after they have been approved by the Audit and Supervisory Committee, the Board of Directors shall decide the new board members.For the policies and procedures involved in nominating director candidates, please refer to the Corporate Governance Report.
In order to ensure transparency of the Group’s corporate governance structure, in November 2015, the Company formulated its Standards for the Independence of Outside Directors, as stated in part below.
The Company deems that any directors who fall into any of the following categories do not meet the standards required of independent outside directors.
※1：“Entities whose principal client is the Company” are those who received payments from the Company equivalent to more than 2% of their annual sales in the latest business year.
To ensure the maximum effectiveness of the Board of Directors, a questionnaire was submitted to all Board members pertaining to the efficacy and appropriateness of the Board’s supervision of management. Based on results of analysis and evaluation by a third party, Overall efficacy were analyzed and evaluated. The analysis and evaluation for FY2017 indicated that the composition, operation, and items deliberated by the Board of Directors were generally appropriate. It was noted that sufficient deliberation had been conducted through the exchange of opinions, and confirming that the Board remained effective and appropriate in its supervision of operations. In the future, the Company will strive to make improvements on the issues(※) identified in these areas, in order to further improve the effectiveness and appropriateness of management oversight by the Board of Directors.
Questionnaire items
Directors and executive officers are provided with trainings and continuous opportunities to acquire essential knowledges for executing duties in order to properly fulfill given roles.
Specific Examples of Training| Position | When appointed | After appointment |
|---|---|---|
| Directors and Executive Officers |
|
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| Outside Directors |
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Internal directors who are not members of the Audit and Supervisory Committee have a performance-linked framework for remuneration.
It is designed to ensure that the medium-term management plan goals are achieved, the focus is on the mid- to long-term profit of shareholders, and the motivation to maximize the corporate value of the Company remains high.
The index used to evaluate business performance is the Company’s consolidated operating profit, while the total amount of bonuses varies according to the degree to which budgetary goals have been achieved. Performance-linked bonuses, meanwhile, account for 40% of the Company’s total remuneration.
Remuneration of outside directors who are not Audit and Supervisory Committee members consists solely of a fixed monthly amount that takes into account their duties.
The total amount of fixed monthly compensation and performance-linked bonuses for directors who are not Audit and Supervisory Committee members is within the scope of remuneration approved at the 167th Ordinary General Meeting of Shareholders (within ¥1.2 billion per year).
The amount of remuneration of each director who is not a member of the Audit and Supervisory Committee (as well as of each executive officer) is determined by a resolution of the Board of Directors within the above limit of remuneration, and must be approved at the same General Meeting of Shareholders. In order to ensure transparency, the suggested remuneration is explained to committee members, and the final decision is made by shareholders after they have taken into consideration the opinions of the Audit and Supervisory Committee members.
Remuneration for directors who are members of the Audit and Supervisory Committee consists solely of a fixed monthly salary. The gross amount is within the remuneration limit approved at the 167th Ordinary General Meeting of Shareholders (within ¥150 million per year).
The amount of remuneration for each director who is a member of the Audit and Supervisory Committee is determined through consultations conducted by the committee directors. The amount is within the above remuneration limit, as approved at the same Ordinary General Meeting of Shareholders.
Total Amount of Remuneration for Directors and Audit & Supervisory Board Members| Directors (excluding Audit and Supervisory Committee Members) (Of which are Outside Directors) |
Directors (Audit and Supervisory Committee Members) (Of which are Outside Directors) |
All Directors (of which are Outside Directors) |
|
|---|---|---|---|
| Monthly Remuneration | 261 million yen:10 persons (11 million yen) (1 persons) |
81 million yen:4 persons (45 million yen) (3 persons) |
342 million yen:14 persons (56 million yen) (4 persons) |
| Bonuses | 106 million yen:8 persons (- yen) (- persons) |
- yen:- persons (- yen) (- persons) |
106 million yen:8 persons (- yen) (- persons) |
| Total | 367 million yen:10 persons (11 million yen) (1 persons) |
81 million yen:4 persons (45 million yen) (3 persons) |
448 million yen:14 persons (56 million yen) (4 persons) |
Notes:
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