Board of Directors
Director Composition and Skills
In appointing directors, the Company will select individuals who demonstrate a high level of ethical standards and legal compliance, and who possess the requisite knowledge, experience, and expertise as determined by the Company's Board of Directors, taking into account the skill matrix and the balance and diversity of the Board of Directors as a whole. Outside directors are selected from a pool of candidates with extensive experience in management, a high degree of expertise in finance, accounting, legal affairs, and other relevant areas, and a broad range of knowledge and experience.
Skills Matrix for Directors
Directors (Excluding Directors who are Audit & Supervisory Board Members)
|
Identity
|
Attribute
|
Gender
|
Corporate Management
|
Legal & Risk Management
|
Finance & Accounting
|
Global
|
Business Strategy
|
Business and Industry Knowledge
|
Human Resources Development Diversity
|
Sustainability
|
|---|---|---|---|---|---|---|---|---|---|---|
|
Naoki Kurose
|
|
Male
|
●
|
|
|
●
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●
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●
|
|
●
|
|
Koichi Kikuchi
|
|
Male
|
●
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|
●
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●
|
●
|
|
|
|
|
Koichiro Shibata
|
Outside/
independence
|
Male
|
|
●
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|
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|
|
|
●
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Kenichi Hirai
|
Outside/
independence
|
Male
|
●
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|
●
|
●
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●
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●
|
|
|
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Ryo Otsuka
|
Outside/
independence
|
Male
|
●
|
|
●
|
●
|
|
●
|
|
●
|
|
Hitomi Yokote
|
Outside/
independence
|
Female
|
●
|
|
●
|
●
|
|
|
●
|
●
|
Directors who are Audit & Supervisory Board Members
| Identity | Attribute | Gender | Corporate Management | Legal & Risk Management | Finance & Accounting | Global | Business Strategy | Business and Industry Knowledge | Human Resources Development Diversity | Sustainability |
|---|---|---|---|---|---|---|---|---|---|---|
| Koichi Tada | Male | ● | ● | ● | ||||||
| Fujio Furukawa | Outside/ independence |
Male | ● | ● | ||||||
| Chiaki Tsuji | Outside/ independence |
Female | ● | ● | ● |
Reasons for selection of skills
|
Skill
|
Reasons for Selection
|
|---|---|
|
Corporate Management
|
In order to practice management that balances "contribution to a sustainable society and business expansion," a wealth of experience in corporate management is necessary.
|
|
Legal & Risk Management
|
Solid knowledge and experience in the areas of legal and risk management are necessary to improve the effectiveness of management oversight by the Board of Directors, which is the foundation for sustainable corporate value enhancement.
|
|
Finance & Accounting
|
Solid knowledge and experience in the areas of finance and accounting are necessary to ensure the efficiency of management resources (safety, efficiency, and growth).
|
|
Clobal
|
To oversee the growth strategy and management of an international business, one needs to have experience operating abroad and practical experience in a global company.
|
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Business Strategy
|
Solid knowledge and experience in the area of business strategy is necessary to create new growth areas and new businesses and sustain growth.
|
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Business and Industry Knowledge
|
To fulfill the supervisory function of our group, which has both manufacturing and trading company functions, a broad and solid knowledge of the business and industry is necessary.
|
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Human Resources Development
Diversity
|
Solid knowledge and experience in the field of human resource development, including diversity promotion, is necessary to develop human resources and ensure diversity in the organization.
|
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Sustainability
|
Solid knowledge and experience in the field of sustainability is necessary to promote contributions to a sustainable society.
|
Composition of the Company's Board of Directors
Policies and procedures for the Board of Directors in determining remuneration of Senior Management and Directors
For the election of Directors (excluding Directors who are Audit & Supervisory Committee Members), the Company elects talented persons who have a high sense of ethics and a strong law-abiding spirit with knowledge, experience, expertise, etc. considered to be necessary for the Board of Directors in light of the skill/ matrix, while paying attention to the balance and diversity of the Board of Directors as a whole. This process is intended to enable the Board of Directors to make decisions on execution of important business operations through full discussion between themselves and perform the appropriate functions of supervising and auditing execution of business operations at high levels. In respect of Outside Directors, the Company elects persons with abundant experience in business management and advanced expertise, broad knowledge and experience in finance, accounting, legal affairs, etc. To elect a President and Representative Director, the Nomination & Remuneration Advisory Committee, a majority of whose members are independent Outside Directors, engages in repeated deliberations to clarify the election process and ensure objectivity, timeliness and transparency, thereby electing an appropriate talented person with a view in part to bringing the management philosophy and business strategy of the Company into reality.
In the case that any of the following events apply to any Managing Executive Director or Executive Officer, the Board of Directors will lose no time and deliberate on the dismissal of the Director or Executive Officer after receiving advice from the Nomination & Remuneration Advisory Committee.
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Cases where violations of laws and regulations, the Articles of Incorporation, etc. or other forms of malpractice are found
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Cases where a substantial hindrance occurs to the execution of duties
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Cases where there is an objective and reasonable reason for not fully fulfilling the role required for the job
With regard to the procedure for nominating candidates for Director, the Company establishes the Nomination & Remuneration Advisory Committee, chaired by an independent Outside Director, as an advisory body to the Board of Directors in order to ensure objectivity, timeliness and transparency in the functions concerning the nomination of Directors and Audit & Supervisory Board Members. The Nomination & Remuneration Advisory Committee provides advice on matters related to draft agenda for the General Meeting of Shareholders concerning the election and dismissal of Directors and Audit & Supervisory Board Members, the election and dismissal of Executive Directors, and their positions. Candidates for Audit & Supervisory Board Members are deliberated on by the Audit & Supervisory Committee prior to deliberation by the Board of Directors, which is required to obtain the consent of the Audit & Supervisory Board.
Ensuring the effectiveness of the Board of Directors
The Company conducts self-evaluation and analysis of the effectiveness of the Board of Directors with the aim of improving the functions of the Board of Directors and enhancing its corporate value. Self-evaluation and analysis were conducted in the following ways while receiving advice from external organizations.
In January 2024, the Company conducted a questionnaire survey about all Directors and Audit & Supervisory Board Members, who are members of the Board of Directors. The Company secured anonymity by having respondents directly send their answers to an external organization. Based on reports of aggregate results from the external organization, the outcome of the questionnaire was reported at the Board of Directors meeting held in March 2024, and it has been confirmed that the effectiveness of the Board of Directors of the Company has remained generally secured.
In the previous effectiveness assessment, we recognized that there were issues in terms of the enhancement of discussions on management strategies, management resources, capital efficiency, etc., and follow-up on the progress of management plans, etc.
We therefore worked to enhance discussions on measures for corporate value improvement, engagement in management with an awareness of capital efficiency, etc. In order to achieve further results, we will continue to work on enhancing discussions on management strategies, management resources, capital efficiency, etc., and follow-up on the progress of management plans, etc.
Going forward, the Company will continue to make an effort to enhance the functions of the Board of Directors by resolving issues detected in evaluating the effectiveness of the Board of Directors and push forward with management aimed at sustainable enhancement of corporate value.
Status of Outside Directors
Outside Director
|
Name
(Date of inauguration)
|
Independent
|
Reason for Appointment
|
Attendance at the Board of Directors meetings, etc.
|
|---|---|---|---|
|
Koichiro Shibata
(October 2017)
|
○
|
He has abundant experience and extensive knowledge as a lawyer. He is particularly well versed in the fields of legal affairs and risk management, and has led the Nominating and Compensation Advisory Committee as a member from an objective and professional standpoint.
It is expected that he will continue to supervise the execution of the duties by Directors, etc. from an independent position, thereby reinforcing the function of the Company’s Board of Directors. The Company therefore elected him as a candidate for Outside Director again.
There are no personal or business relationships, etc., that fall under the items described in the independence criteria established by the financial instruments exchanges. He has been designated as Independent Officer based on the judgment that he can ensure sufficient independence to perform his duties as Outside Director from the Company's management.
|
20 / 20
|
|
Kenichi Hirai
(June 2020)
|
○
|
He has been involved in corporate management in the automotive and chemical industries and is well versed also in the industries of the Company. He has extensive knowledge and experience particularly in the fields of accounting and finance, and has provided appropriate advice and suggestions to the Nominating and Compensation Advisory Committee as a member from an objective and professional standpoint. In addition, as the Lead Independent Outside Director, he has compiled opinions from Independent Outside Directors and made recommendations to the executive side.
It is expected that he will continue to supervise the execution of the duties by Directors, etc. from an independent position, thereby reinforcing the function of the Company’s Board of Directors. The Company therefore elected him as an Outside Director.
There are no personal or business relationships, etc., that fall under the items described in the independence criteria established by the financial instruments exchanges. He has been designated as Independent Officer based on the judgment that he can ensure sufficient independence to perform his duties as Outside Director from the Company's management.
|
20 / 20
|
|
Ryo Otsuka
(June 2020)
|
○
|
He has been serving as Representative Director in a manufacturing company for many years and is also well versed in the industries of the Company. The Company expects that he will continue to supervise the execution of the duties by Directors, etc. from an independent position by utilizing his abundant experience and extensive knowledge that he has accumulated to date in management in general, thereby reinforcing the function of the Company’s Board of Directors. The Company therefore elected him as an Outside Director.
There are no personal or business relationships, etc., that fall under the items described in the independence criteria established by the financial instruments exchanges. He has been designated as Independent Officer based on the judgment that he can ensure sufficient independence to perform his duties as Outside Director from the Company's management.
|
20 / 20
|
|
Hitomi Yokote
(June 2023)
|
○
|
She has abundant international experience including in negotiations with foreign governments and organizations, as well as experience and knowledge in a wide range of fields including management, as the executive director of NPOs, and human resource development. It is expected that she will continue to supervise the execution of the duties by Directors, etc., from an independent position, thereby reinforcing the function of the Company’s Board of Directors. The Company therefore elected her as an Outside Director.
There are no personal or business relationships, etc., that fall under the items described in the independence criteria established by the financial instruments exchanges. She has been designated as Independent Officer based on the judgment that she can ensure sufficient independence to perform her duties as Outside Director from the Company’s management.
|
15/15
|
|
Fujio Furukawa
(June 2024)
|
○
|
He served in important positions at the National Tax Agency for many years, and is familiar with finance and accounting in addition to taxation. It is expected that he will supervise the execution of the duties by Directors, etc., from an independent position, thereby reinforcing the function of the Company’s Board of Directors. The Company therefore elected him as an Outside Director.
There are no personal or business relationships, etc., that fall under the items described in the independence criteria established by the financial instruments exchanges. He has been designated as Independent Officer based on the judgment that he can ensure sufficient independence to perform his duties as Outside Director from the Company's management.
|
board of directors
20 / 20
|
|
Chiaki Tsuji
(June 2024)
|
○
|
She has a wealth of experience and a high level of expertise gained as a lawyer in Germany as well as Japan. She has international experience, and it is expected that she will supervise the execution of the duties by Directors, etc., from an independent position, thereby reinforcing the function of the Company’s Board of Directors. The Company therefore elected her as an Outside Director.
There are no personal or business relationships, etc., that fall under the items described in the independence criteria established by the financial instruments exchanges. She has been designated as Independent Officer based on the judgment that she can ensure sufficient independence to perform her duties as Outside Director from the Company’s management.
|
board of directors
20 / 20
|
Operation of the Board of Directors
The Board of Directors convenes on a monthly basis to address critical management issues and oversee the implementation of business operations in alignment with legal, regulatory, and corporate governance requirements.
The Board of Directors convenes on a monthly basis, with additional meetings held as needed, to make decisions on critical management matters and oversee business operations in alignment with legal, regulatory, and corporate governance requirements.
In fiscal year 2023, the Board of Directors held a total of 20 meetings. The agenda included discussions on management policy, corporate governance, various management issues such as sustainability, important business matters, and matters related to business execution.
The following table illustrates the percentage of items to be resolved or reported at Board of Directors meetings, the percentage of time devoted to questions, and the percentage of agenda items on which questions were asked. We will continue to promote efforts to enhance the efficiency of Board of Directors meetings.
Percentage of resolutions and reports (based on number of proposals)
Percentage of question time
Percentage of proposals that were questioned (based on number of cases)
Evaluation of the Effectiveness of the Board of Directors
In January 2024, a questionnaire was distributed to all directors and auditors who are members of the Board of Directors. The method of response was to submit the completed questionnaire directly to an external organization, thus ensuring anonymity. The results of the questionnaire were presented at the March 2024 Board of Directors meeting, based on the report compiled by the external organization. It was confirmed that the effectiveness of the Company's Board of Directors continues to be generally ensured.
Changes in Measures to Evaluate and Improve the Effectiveness of the Board of Directors
Fiscal Year 2021：Revision of Corporate Governance Code
Initiatives Measures
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Began discussions on creating a skills matrix and succession planning
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Nominating and Compensation Advisory Committee established
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Third-party evaluation of effectiveness begins.
Issues Identified from the Board Effectiveness Assessment
-
Ensure time for constructive discussion and exchange of ideas
Fiscal Year 2022：The First Year of Sustainability in Our Company
Initiatives Measures
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Decided on a policy of selling policy shareholdings
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Consideration of Succession Planning
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Establish opportunities for reporting on IP investments
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Sustainability Committee established and reports on committee discussions
Issues Identified from the Board Effectiveness Assessment
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Lack of diversity on board of directors
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Lack of discussion on management strategy, resources, capital efficiency, etc.
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Follow-up on progress of management plan
Fiscal Year 2023：TSE requested efforts to achieve a P/B ratio of 1.0 or higher
Initiatives Measures
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Cost of Capital Awareness Initiatives
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Start Discussion
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Enhancement of officer training
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Ensuring Board Diversity
Issues Identified from the Board Effectiveness Assessment
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Management strategy, management resources, capital efficiency, etc.
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Further discussion
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Strengthen supervision of the progress of the management plan