Governance Structure
- Corporate Governance Structure
- Criteria for Electing Board Members
- Board Member Training Policy
- Board Member Compensation
- Anti-Takeover Measures
Corporate Governance Structure
Nikkiso has the following corporate governance structure relating to decision-making, execution, and supervision of corporate management, which includes an audit & supervisory board as prescribed in the Companies Act of Japan.
As of July 1, 2022
| Organizational type | Company with an audit & supervisory board |
|---|---|
| Number of directors (number of outside directors) | 8 (2) |
| Term of office of directors | 1 year |
| Number of audit & supervisory board members (number of outside members) | 4 (2) |
| Executive officer system | Adopted |
| Voluntary advisory body to the Board of Directors | Nomination and Compensation Committee |
| Accounting Auditor | Deloitte Touche Tohmatsu LLC |
Establishment of Nomination and Compensation Committee
The Company has established the Nomination and Compensation Committee as a voluntary advisory body to the Board of Directors.
The purpose is to enhance transparency and objectivity regarding the nomination of directors and corporate auditors and compensation for directors, and to strengthen the supervisory function of the Board of Directors.
The Nomination and Compensation Committee consists of three or more directors and corporate auditors selected by a resolution of the Board of Directors, and the majority of them are outside officer (outside directors and outside corporate auditors).
Composition of Nomination and Compensation Committee
| All members | Breakdown | ||
|---|---|---|---|
| Exective Directors | Outside Officers | ||
| Outside Directors | Outside Audit Supervisory Board Members | ||
| 6 | 2 | 2 | 2 |
Criteria for Electing Board Members
Nominees to be appointed as board members must be able to see the big picture when it comes to the Nikkiso Group's operating environment, and move quickly to boldly address important business issues, and deliver results. They must also be able to play a vital role in developing a corporate governance structure that supports the kind of transparent, fair, prompt, and bold decision-making needed to realize Nikkiso's corporate philosophy.
Criteria for Electing Outside Directors
Nominees to be appointed as outside directors must neither have any personal, financial, business or other relationships with the company, nor have any potential conflicts of interests with general shareholders so that being an outside director is the only relationship they will have with the company. As outside directors, they must be able to fulfill the role of overseeing directors in making decisions and performing their duties from an objective and professional standpoint independent from the company's operations. They must also be able to use their expertise to provide sound advice that will help the company achieve sustainable growth and enhance its corporate value over the medium- to long-term.
| Name | Reason for election |
|---|---|
| Haruko Hirose (Independent director) | For many years, she has worked on international projects such as in personnel,
financial affairs, and industrial development of the United Nations. Furthermore, she
has endeavored in activities for developing personnel who are active on the world
stage. She is expected to provide valuable advice for building a Group environment
where a diverse workforce can thrive in appropriate positions, starting with ensuring
the effective functioning of the Board of Directors and promoting the active
participation of women. |
| Mitsuaki Nakakubo (Independent director) | As an attorney, he has mainly acted in areas such as disputes on officers’ liability, copyright-related matters, matters related to the Unfair Competition Prevention Act of Japan, and matters related to real estate. Furthermore, he has performed duties as an Outside Audit & Supervisory Board Member of the Company since June 2015, primarily providing beneficial suggestions regarding items such as labor issues, foreign and domestic legislation, compliance and corporate governance. It has been determined that he can provide instructions and advice for the management of the Company and supervise management in an objective, independent and fair manner using these experiences and past results.
|
Criteria for Assessing Independence of Outside Directors
Nikkiso uses the independence criteria set forth by the Tokyo Stock Exchange to assess the independence of outside directors. In interpreting and adopting this criteria, we substantively assess whether an outside director has any personal, financial, business, or other relationships with the company other than being an outside director or has any potential conflict of interest with shareholders so that he or she can fulfill the role of overseeing directors in making decisions and performing their duties from an objective and professional standpoint independent from the company's operations.
Criteria for Electing Audit & Supervisory Board Members
Nominees to be appointed as audit & supervisory board members must, in addition to fulfilling the role of auditing company operations and accounting practices, be able to actively and willingly exercise their authority as well as express relevant opinions at meetings of the board of directors. At least one of the audit & supervisory board members must possess sufficient knowledge of financial and accounting practices.
Reason for Electing Outside Audit & Supervisory Board Members
Nominees to be appointed as audit & supervisory board members must neither have any personal, financial, business or other relationships with the company nor have any potential conflicts of interests with general shareholders so that being an outside audit & supervisory board member will be the only relationship they will have with the company. As outside audit & supervisory board members, they must be able to fulfill the role of auditing directors in making decisions and performing their duties from an objective and professional standpoint independent from the company's operations. They must also be able to use their extensive knowledge to identify risks in business strategies and provide advice.
| Name | Reason for election |
|---|---|
| Junko Fukuda (Independent director) | She engaged in teaching and research for a long time at Josai International University, specializing in management studies, marketing and distribution. From this and important positions held at various organizations promoting environmental conservation and regional development, she has obtained extensive specialized knowledge and experience in management and ESG. From these experiences and past results, it has been determined that she can appropriately audit the performance of duties by Directors in an objective, independent and fair manner. |
| Naoshi Ogasawara (Independent director) | He has obtained advanced and specialized knowledge relating to financial affairs and accounting as a certified public accountant and has obtained extensive experience in roles such as auditor and M&A assistant in companies listed on stock exchanges. It is expected that he will appropriately audit the performance of duties by Directors in an objective, independent and fair manner using this knowledge and these experiences. |
Board Member Training Policy
We help directors and audit & supervisory board members learn what they need to know in order to fulfill their roles and duties. Newly appointed board of directors as well as audit & supervisory board members receive specific training as needed in order to acquire or reacquaint themselves with the basics they need to serve in their appointed positions. Reappointed members receive specific training on business strategies, financial affairs, accounting, human resources, organization, etc. Training on accounting, personnel, compliance, insider trading, and other areas related to our company's management and operations as well as training on business strategies and plans is provided at executive officer meetings held several times a year, which all board of directors and audit & supervisory board members, including executive officers, attend.
Board Member Compensation
Compensation of directors is determined by a comprehensive assessment of the Company’s performance, as well as the nature and execution of each director’s duties, to appropriately compensate the performance of the directors, who continuously strive to enhance our corporate value.
The board of directors will consult with the Nomination and Compensation Committee and receive a report on the payment standards established based on this policy.
The CEO will fairly evaluate and determine the amount of remuneration for each director based on the above payment standards, etc., provided that the board of directors resolves to delegate to the CEO.
Anti-Takeover Measures
We do not employ anti-takeover measures.
In order to enhance our corporate value and ensure the common interest of shareholders, control of our company is determined by those shareholders who gain a stake in the company through free and fair trading on the stock market.