We place importance on relationships of trust with our shareholders, employees, customers, business partners, creditors, local communities, and other stakeholders. In addition, in order to achieve sustained growth and increase corporate value over the medium to long term, we will provide appropriate information disclosure, including non-financial information, and support transparent, fair, and prompt decision-making by directors and others.We recognize that realization of a corporate governance system and constructive dialogue with shareholders are the most important issues. We will continue to strive to achieve sustained growth and increase corporate value over the medium to long term.
As a company with an Audit and Supervisory Committee, we have established a corporate governance system centered on the Board of Directors and the Audit and Supervisory Committee. In order to accelerate business execution and clarify the roles of supervisory and executive functions, we have delegated part of the decision-making authority for business execution to the President and Representative Director, and introduced an operating officer system.
In accordance with the Companies Act and the Enforcement Regulations of the Companies Act, we have established a system (internal control system) to ensure the appropriateness of our business as described in the preceding clause, and we will further enhance this system.
We hold regular meetings between the Accounting Auditors and the Audit and Supervisory Committee to share information, and regular monthly meetings between the Internal Audit Division and Directors of the Audit and Supervisory Committee to share and cooperate with the audit results.
In addition, we hold three-pronged audit meetings with accounting auditors, the Audit and Supervisory Committee, and the Internal Audit Division about three times a year to share information on internal control issues.
Corporate
Governance Report
【Evaluation process】
Every year, we analyze and evaluate the effectiveness of the Board of Directors as a whole by conducting a questionnaire survey to directors who comprise the Board of Directors, reviewing the results by independent outside directors, and reporting the results to the Board of Directors.
【Summary of evaluation results】
As a result, the effectiveness of the entire Board of Directors in the previous fiscal year.
Directors was confirmed that they have secured the effectiveness of the management of the Board of Directors, the monitoring function of the Board of Directors, and the method of reporting to the Board of Directors was also evaluated that improvements are made. On the other hand, they shared the need for more opportunities to discuss medium-term issues. Based on these opinions, we will work to make improvements to further improve the effectiveness of the Board of Directors.
The Audit and Supervisory Committee strives to conduct efficient audits in accordance with the audit policy, priority audit matters, division of duties, etc. In conducting audits, the Audit and Supervisory Committee acts to contribute to the sustainable growth of the corporate group by auditing the execution of duties by directors from a fair and neutral standpoint, and pays attention to the development and enhancement of the corporate governance system and internal control system in its audit work.
In addition, to ensure that audits by the Audit and Supervisory Committee are conducted effectively, the Audit and Supervisory Committee regularly exchanges opinions and information on important issues with Representative Directors, and regularly exchanges opinions with Accounting Auditors and the Internal Audit Division for the sharing and mutual use of audit information.
When appointing our company's senior management, the Company comprehensively takes into account their experience, abilities, achievements, etc. as a manager, giving priority to their degree of contribution to business performance during their term of office, and taking into consideration whether or not they are capable of fulfilling their duties faithfully and faithfully by constantly honing themselves to be a role model for others, and working toward the development of the Company.
When nominating our company's director candidates, the Company comprehensively takes into consideration their experience, abilities, achievements, etc. as a manager, and in the case of reappointed directors, the Company selects and nominates them after taking into consideration their degree of contribution to business performance during their term of office. The Nomination Committee, which is chaired by an Independent Outside Director and consists of a majority of Independent Outside Directors, deliberates.
Candidates for Outside Directors are selected and nominated based on a comprehensive assessment of their international acumen, expertise and background, which are essential to the future development of our group, in light of the roles that our company expects Outside Directors to play, including (1) utilizing their knowledge and experience as experts to express their opinions from an external and objective perspective, which are reflected in the formulation of management strategies and plans and in the decision-making for the execution of important business operations, (2) supervising to ensure that there are no conflicts of interest between the Company and the management and controlling shareholders, and (3) reflecting the opinions of shareholders and other stakeholders in the Board of Directors.
Remuneration is determined in consideration of factors such as the situation at our company, the position and responsibilities of the officer concerned, and the balance with employee salaries. Remuneration for Directors (excluding Directors who are Audit and Supervisory Committee Members) is determined after receiving a report on the basic policy on remuneration and procedures for determining remuneration from the Remuneration Committee, which is chaired by an Independent Outside Director and has a majority of Independent Outside Directors, and disclosing individual remuneration amounts at our company Board of Directors in order to strengthen the supervisory function of the Board of Directors and ensure transparency and fairness in management.
As for remuneration for Directors, performance-linked bonuses are paid from the perspective that it is effective to improve business performance by ensuring the stability of their livelihood at a minimum, allowing them to devote themselves to their duties, and by partially providing certain incentive remuneration.
Performance-linked bonuses to Directors are determined in consideration of the results of consolidated revenue and operating profit, and the results of consolidated ROE for the previous fiscal year and the current fiscal year.
Outside Directors are excluded from the allocation of restricted stock remuneration and the payment of performance-linked bonuses.
Every year, the Board of Directors of our company qualitatively and quantitatively examines the necessity of holding each cross-shareholdings, as well as benefits and risks involved. We will also continue to work on reducing cross-shareholdings and increasing asset efficiency as one of the measures to improve value continuously and achieve PBR 1x level at an early stage. (please refer P.10 Financial Policy also.)
Our company aims to achieve sustainable growth and increase corporate value over the medium to long term by actively engaging in dialogue with shareholders and investors, explaining our company's management strategies and plans, and reflecting the opinions and requests obtained through dialogue in management.
We have established a Risk Management Committee to reduce and respond to various risks in our business operations. The Risk Management Committee consists of the BCP Subcommittee, the Disaster Prevention Subcommittee, and the Confidential Information Management Subcommittee. The BCP Subcommittee and the Disaster Prevention Subcommittee formulate business continuity plans and reduce disaster risks, and the Confidentiality Management Subcommittee implements information security measures.
In recent years, earthquakes, fires, explosions, wind, snow, and flood damage have occurred one after another in countries around the world, and pandemic (a new type of coronavirus) has spread throughout the world. Since it is expected to have a significant impact on the maintenance of the supply chain, it is necessary to determine what measures are being taken to deal with the risks and bottlenecks of stopping business activities. It is also necessary to formulate and implement a business continuity strategy that can be implemented in order to avoid a "loss of management" in the event of an accident.
In order to prevent the suspension of business operations due to disasters such as fires, earthquakes, wind, snow, and floods, and infectious diseases, the Group is narrowing down important operations and promoting the formulation of business continuity plans.
In the event of a disaster, accident, or incident, Representative Director takes the lead of operation meetings in deliberating measures to minimize losses, the possibility of business continuity, and the risk of delivery to customers.
We are committed to secure information management on a global scale by establishing an Information Security Management System (ISMS) and continuously maintaining and improving information security, including employee education. In particular, we consider customer information, sales information, technical information, and personal information to be highly confidential, and we have formulated appropriate security rules and audit sheets to protect such information from risks such as leakage, loss, destruction, and falsification, and operate them after conducting regular audits and corrections.
In terms of IT security, in response to the recent rise in the risk of cyber attacks, we have introduced stronger defense mechanisms, such as the introduction of EDR (a system for detecting and responding to cyber threats at endpoints) throughout the group.
In addition to internal mechanisms, we have acquired information security certification called TISAX, which is defined by the German Automobile Manufacturers Association, in Japan, Europe, and the Americas. We are also working to maintain and improve our security standards by complying with the Japanese Automotive Industry Cyber Security Guidelines.
We promote intellectual property activities based on our basic policies of securing beneficial rights, ensuring intellectual property safety, and strengthening the utilization of rights.
To secure beneficial rights, we seek and evaluate patentable inventions, acquire rights from highly valued inventions, and promote the creation of a foundation to advance business superiority. In addition, to support the acquisition of orders, we will promote the acquisition of rights corresponding to the countries in which we distribute our products and to our competitors.
"Ensuring Intellectual Property Safety" manages intellectual property risks by conducting patent research in accordance with the development and design phases.
As part of our efforts to strengthen the use of rights, we are promoting verification of other companies' products. When the use of our rights is confirmed, appropriate use of rights such as licenses is made.
The Nippon Seiki Group strives to be a corporate group that is even more trusted by society by placing importance on compliance in its management, complying with laws and ethics as a responsible member of society, and practicing sound corporate activities.
We aim to become a corporate group trusted by society by establishing a compliance code of conduct and having each director and each employee act in accordance with the code of conduct.
We will also contribute to the prosperity of society by providing high-value products and services that satisfy customers.
Compliance
Code
We have established a Compliance Committee under the Representative Director to promote compliance, and appoint a Director or an executive officer with an official title as the Compliance Officer. The Compliance Committee is responsible for establishing a company-wide compliance system, identifying problems and issues, and conducting awareness-raising activities.
The committee deliberates on important issues related to violations of the law and promotes continuous improvement.
In addition, the Directors in charge of operations and Executive Officers analyze compliance risks specific to each business division and take countermeasures to continuously improve the quality of these risks.
We have included the Compliance Declaration, the Internal Reporting System, and the Compliance Code of Conduct in the TQM notebook carried by all employees, and are working to educate employees about the meaning of compliance and to publicize it.
Based on the annual activity plan of the Compliance Committee, compliance training for new employees, compliance training for managers by corporate lawyers, and distribution of educational materials (quarterly).
These measures are implemented by all group companies. In addition, we are working to prevent recurrence of compliance incidents occurring at Group companies by sharing information with the Compliance Committee and the General Affairs Manager of each company.
In addition, we are working to raise awareness of legal compliance by holding antitrust law training for sales departments and employees on overseas assignments, and holding annual training for all employees to prevent insider trading.
In accordance with the Whistleblower Protection Act, we have established an internal reporting system that accepts reports from employees, including affiliated companies, who are aware of improprieties, at internal and external contact points (attorneys), protects whistleblowers, and implements appropriate investigations, corrections, and preventive measures.
We ensure that whistleblowers are fully protected by allowing whistleblowers to report anonymously and by imposing confidentiality obligations on those in charge.
In addition, the Compliance Committee is responsible for the internal whistleblower hotline. The Compliance Committee mandates the submission of reports on certain serious cases to outside directors, and prohibits the involvement of interested parties in cases. In this way, the fairness and independence of the whistleblower hotline is ensured.
Nippon Seiki Co., Ltd. is committed to appropriate collaboration with multi-stakeholders based on the importance of value creation not only with shareholders but also with employees, business partners, customers, creditors, local communities and other stakeholders in corporate management.
Multi-Stakeholder
Policy
Corporate Governance
Compliance Action Guidelines