NSG Group adopts "Company with Three Committees" governance structure, and has in place, as statutory corporate organizations, Board of Directors and -Nomination Audit and Compensation Committees, and an office of Executive Officer. Currently, the Chairman of the Board as well as chairpersons of all three Committee are all appointed from among the Independent External Directors.
Various steps have been taken to date so that NSG Group has enhanced management transparency by further separation of functions between business execution and its supervision and strengthened role of independent external directors. For example, according to the NSG Group Corporate Governance Guidelines, the roles of Chairman of the Board and CEO are clearly distinguished. In the event that Chairman of the Board is not an Independent External Director an Independent External Director who is entrusted to perform specified tasks such as making of contribution to communication, coordination and cooperation between the Independent External Directors and the Executive Divisions and rendering of support to the Chairperson of the Board in relation to any issues of corporate governance shall be appointed from among Independent External Directors. Independent External Directors meet on an as-needed basis, even without presence of executives, for discussion concerning matters such as corporate governance and businesses.
As regards executive function, the Group also has Management Committee, Sustainability Committee, and Strategic Risk Committee. Currently, fifteen(15) Executive Officers are responsible for the business execution. One(1) of them are Representative Executive Officer performing the duties of CEO.
Key items | Description | |
Type of Governance structure | Company with Three Committees | |
Number of Directors / term of office | 7 / 1 year | |
Number of Independent External Directors | 5 | |
Chair of the Board | Mr. Hiroshi Ishino (Independent External Director) | |
Chair of Three Committees |
Nomination: Mr. Hiroshi Ishino (Independent External Director), Audit: Mr. Kunihito Minakawa (Independent External Director), Compensation: Dr. Jörg Raupach Sumiya (Independent External Director) | |
Number of Executive Officers (Representative Executive Officers) / term of office | 15(1) / 1 year | |
Compensation system | Executive Officer (including those who concurrently serve as Directors) |
(1) Fixed salary(Basic salary) (2) Performance-linked compensation ⅰ Management Incentive Plan (annual bonus) ⅱ Long- term Incentive plan (3)Stock Compensation |
External Director | The level of compensation set at the appropriate level based on comparisons with other companies using benchmark data provided by specialist external advisers(Fixed salary) | |
Accounting Auditor | Ernst & Young ShinNihon LLC |
Diverse and highly independent in its structure, the Board of Directors is responsible for making decisions on the Group's material matters and supervising the execution of business.
The members of the Board of Directors, Nomination Committee, Audit Committee and Compensation Committee are as follows (as of 30 June, 2023)
Name | Position |
Board of Directors |
Nomination Committee | Audit Committee |
Compensation Committee |
Hiroshi Ishino | External Director | ◎ | ◎ | ○ | ○ |
Jörg Raupach Sumiya | External Director | ○ | ○ | ○ | ◎ |
Kunihito Minakawa | External Director | ○ | ○ | ◎ | ○ |
Shinji Asatsuma | External Director | ○ | ○ | ○ | ○ |
Yoshihiro Kuroi | External Director | ○ | - | - | - |
Eriko Sakurai | External Director | ○ | - | - | - |
Munehiro Hosonuma | Representative Executive Officer, President and CEO | ○ | ○ | - | ○ |
◎ denotes the chair or chairperson and ○denotes a member.
Role | Board of Directors is responsible for making decisions on the Group's material matters such as basic policies for business management, internal control system and duty allocation among Executive Officers, and supervision over business execution by executives. |
Composition |
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Number of times met in FY2023 | 12 |
Secretariat | Company Secretary Department |
Role | Nomination Committee is responsible for making decisions on the General Meeting of Shareholders agenda items regarding the appointment and removal of Directors. It also oversees the succession plans for key executives, including President and CEO, and provides advice and recommendations for the Executive Officer candidates. |
Composition |
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Number of times met in FY2023 | 6 |
Secretariat | Company Secretary Department |
Human resources Expert | Human Resources Department |
Role | Audit Committee is responsible for auditing the execution of duties by Directors and Executive Officers, preparing audit reports, and deciding details of proposals concerning appointment, removal or not reappointing the Accounting Auditor. |
Composition |
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Number of times met in FY2023 | 11 |
Secretariat and how to ensure its independence |
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Audit methodology and cooperation with others |
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Role | Compensation Committee is responsible for making decisions on a compensation policy for Directors and Executive officers as well as individual elements of compensation for Directors and Executive Officers. |
Composition |
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Number of times met in FY2023 | 6 |
Secretariat | Company Secretary Department |
Remuneration Expert | Human Resources Department |
NSG Group started an annual evaluation process for the Board effectiveness since FY2016, in order to further and constantly improve performance and effectiveness of the Board of Directors and Nomination, Audit and Compensation Committees.
The overall summary of the results from the review made in relation to FY ended March 2022 is as follows:
[Our Effectiveness Review Process]
The Board confirmed the progress of the priority implementation items effective from prior years for improvement made during the year ended March 2022. In addition, as part of the annual evaluation process for the above financial year, the Board conducted an analysis and evaluation of the effectiveness review of the Board and Committees based on the feedback and views taken from each Director in terms of composition, status of meeting management, agenda setting, status of deliberations, performance of the role of the Board, communication with the Executive team and material agendas requiring further in depth deliberation by the Board on a going forward basis. The entire process was led and supervised by the Independent External Directors under the leadership of the Chairperson of the Board to ensure sufficient adequacy and independence.
[Evaluation Summary]
The effectiveness review endorsed that the Board and the Committees were all properly and soundly operated to ensure their effectiveness during the fiscal year under review.
At the same time, the following points were confirmed as issues to be addressed by the Board individually.
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NSG Group's Medium Term Management Plan (MTP)
To deepen discussions on the medium- to long-term management strategy and important management issues with a view to enhancing the corporate value of the Group in a sustainable way. In addition, the Executives' initiatives to address the challenges incorporated in MTP (RP24) need to be specified further and their implementation needs to be accelerated in response to various changes occurring in the external environment.
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The Composition of Directors
In order to properly deal with medium- to long-term important management issues, promote in-depth discussions on the skills and experiences required for the Board and enhance the effectiveness of the process of selecting Director candidates. At the same time, promote the appointment of a female Director who is currently absent.
[Priority Implementation Items (what to do next)]
By reference to and on the basis of the evaluation results and views, the Board adopted the following priority implementation items through the exchange of views at sessions consisting exclusively of Independent External Directors and discussions at the Board meetings, with a view to ensuring the execution of the Revival Plan (RP24) and improving the Group's corporate value over a medium to long term in a sustainable manner through the Board and the Committees.
- In addition to in-depth discussions of the medium- to long-term management strategy and important management issues, regarding key measures set forth in MTP (RP24), request the Executive Team to further specify implementation items to achieve the plan and monitor the progress to ensure their swift implementation in view of the ongoing changes in the business environment.
- Pursue the significance of diversity in the Board, work on realizing an appointment of a female Director, which is an ongoing issue.
- In order to properly deal with medium- to long-term important management issues, promote in-depth discussions on the skills and experiences required for the Board and the current composition of the Board, and select Director candidates.
In order to drive forward the management structure facilitating sustainable growth and enhancement of enterprise value of the Group in a medium to long term in light of establishing an appropriate corporate governance structure, these priority implementation items should be validated on a regular basis in terms of their implementation status and effects while their contents should be reviewed as appropriately. The plans are therefore anticipated to constitute a material part of the Board effectiveness evaluation process for the following year.
Executive FunctionFifteen Executive Officers (as of 30 June 2023), a professional group furnished with diverse backgrounds, are responsible for the business execution of NSG Group
Role | Business execution of NSG Group |
Composition | 1 Representative Executive Officer(Chief Executive Officer(CEO) ) and 14 Executive Officers |
Role | Management Committee leads the Group's business operation and oversees the implementation status of businesses in order to realize the policies and targets set forth by the Board of Directors efficiently and appropriately. |
Composition | The Management Committee is composed of executive officers with executive officers and above, other executive officers who supervise major businesses and functions, and general manager of the Corporate Planning Department as permanent members. |
Number of times met in FY2023 | 15 |
Role | Sustainability Committee builds the sustainability strategies, presides over all of the Group's sustainability related activities, and ensures effective communication with various stakeholders. |
Composition | Group Sustainability Committee is chaired by CEO or a person who is nominated by CEO and composed of CEO, Chairperson of the Company, CFO, Chief Administration Officer (CAO) and Chief Risk Officer (CRO), Chief Legal Officer (CLO) and Chief Ethics&Compliance Officer (CE&CO), Chief Human Resources Officer (CHRO), Group Sustainability Director, the Heads of relevant Group Functions and the Heads of each Strategic Business Unit. |
Number of times met in FY2023 | 2 |
Role | Strategic Risk Committee periodically reviews policies, strategies and frameworks concerning risk management throughout the Group, and appropriately take into account the results of such review in forming the organization strategy and goals, in order to promote efficiency of the Group's business management and to enhance the medium and long-term corporate value. |
Composition | Strategic Risk Committee is chaired by CRO and composed of CEO, Chairperson of the Company, CFO, CAO and CRO, CLO and CE&CO, CHRO, the Heads of relevant Group Functions and the Heads of each Strategic Business Unit. |
Number of times met in FY2023 | 3 |
An External Director is a director who has never been a director, executive officer nor employee of the company nor its subsidiary.
To enhance the transparency of business management, the Company has appointed six External Directors out of the seven Directors, five of whom are designated as Independent Directors under the TSE.
In addition to the criteria for independency defined by the TSE, the Company has established its own criteria of independency for External Directors, taking into consideration their relationship with the Group including such with its officers and major shareholders. All of the five External Directors satisfy the criteria of independency., its officers, major shareholders, etc. These all five External Directors meet the relevant criteria of independency.
Please refer to the Group's Criteria of independency for External Ddirectors.
Background , concurrent offices and activities of External Directors
Mr.Hiroshi Ishino * Independent External Director | Background
Mr. Hiroshi Ishino was in charge of overseas operations at Mitsubishi Corporation, and since then has been promoting the Group's global strategy as president and CEO of Kansai paint Co.,Ltd. He has abundant experience and broad knowledge and perspectives with regard to business management.
Concurrent offices
Senior Corporate Advisor,Kansai paint Co.,Ltd.
Activities
Attended all 12 Board of Directors meetings, all 6 Nomination Committee meetings, all 11 Audit Committee meetings, and all 6 Compensation Committee meetings, held during the fiscal year under review, and made contribution to the deliberation mainly from a specialized viewpoint of an experienced business manager. At the board, he led discussions, especially on strategic marketing andsuply chain management, based on its in-depth knowledge of global management strategy. In FY2022, well performed as Chairperson of the Nomination Committee and led the committee about Group's human resource strategy mainly based on deep knowledge from abundant international experience.
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Dr.Jörg Raupach Sumiya ※Independent External Director | Background
Dr. Jörg Raupach Sumiya has international experience in the field of both business and academia, and is currently a professor at the collage of business administration, Ritsumeikan University, one of the Japan's famous private university. He has abundant experience and broad knowledge and perspectives with regard to an academic expert and business management.
Concurrent offices
Professor at the college of business administration, Ritsumeikan University.
Activities
Attended 11 out of 12 times Board of Directors meetings, all 6 Nomination Committee meetings, 10 out of 11 times Audit Committee meetings, and all 6 Compensation Committee meetings held during the fiscal year under review, and made contribution to the deliberation mainly from a specialized viewpoint of an experienced academic expert and business manager. At the board, he led discussions on sustainability (environment, climate change, etc.) , especially from the standpoint of management experience in a global company and academic experience. In FY2022, well performed as Chairperson of the Compensation Committee and led the committee about the design of the executive compensation system and evaluation system.
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Mr. Kunihito Minakawa * Independent External Director | Background
Mr. Kunihito Minakawa has been a Managing Executive Officer and an Audit & Supervisory Board Member at RICOH CO.,LTD., and has global experience, a wide range of insights and practical experience in finance and auditing. He has abundant experience and broad knowledge and perspectives with regard to business management and finance and accounting.
Concurrent offices
External Director, Santen Pharmaceutical Co., Ltd.
ActivitiesFinancial Services Agency Certified Public Accountants and Auditing Oversight Board Commissioner
Attended all 12 Board of Directors meetings, all 6 Nomination Committee meetings, all 11 Audit Committee meetings, and all 6 Compensation Committee meetings, held during the fiscal year under review, and made contribution to the deliberation mainly from a specialized viewpoint of an experienced business manager. At the Board, he led discussions on finance, accounting, auditing, internal control, etc., based on his deep knowledge of finance and accounting. In FY2021, well performed as Chairperson of the Audit Committee and led the committee about building a highly transparent governance system by appropriately auditing business execution and supervising executives.
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Mr. Yoshihiro Kuroi | Background
Mr. Yoshihiro Kuroi has been a president of an overseas subsidiary at Mitsubishi Corporation, and has a wealth of practical experience in overseas business, IR departments and risk management, etc. as an executive officer at Mitsubishi Motors Corporation and Kasai Kogyo Co., Ltd.He has abundant experience and broad knowledge and perspectives with regard to business management.
Concurrent offices
Advisor, Japan Industrial Solutions Co., Ltd.
Activities
Attended all 12 Board of Directors meetings held during the fiscal year under review, and made statements as mainly from a specialized viewpoint of an experienced business manager. At the Board, based mainly on his extensive experience and insight in overseas business, IR, and risk management, he led discussions on IR, PR and risk management in paticular and contributed to the establishment of a highly transparent governance system.
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Mr. Shinji Asatsuma * Independent External Director | Background
Mr. Shinji Asatsuma has been in charge of the overall management division as a Director and Senior Executive Officer of Kansai paint Co.,Ltd., has promoted the formulation of business strategies and overseas business expansion and has global experience, a wide range of insights and practical experience in finance, accounting and risk management. He has abundant experience and broad knowledge and perspectives with regard to business management.
Concurrent offices
n/a
Activities
Appointed as a Director on June 29, 2022, and attended 9 out of 9 times of the Board of Directors meetings, 5 out of 5 times of the Nominating Committee meetings, 8 out of 8 times of the Audit Committee meetings, and 5 out of 5 times of the Compensation Committee meetings held during the fiscal year under review, and made contribution to the deliberation mainly from a specialized viewpoint of an experienced business manager. At the Board , he led discussions on global business management and risk management , based on his extensive experience and insight in overseas business, finance and accounting.
*Note: Mr. Shinji Asatsuma was newly elected and assumed the position of Director at the 156th Ordinary General Meeting of Shareholders (held on June 29, 2022), so the above table shows the holding and attendance at the meetings of the Board of Directors and each committee since that date. |
Ms. Eriko Sakurai * Independent External Director | Background
Ms. Eriko Sakurai held important positions in marketing, operating, and corporate management of Dow Corning Corporation that is expanding its business globally, and since then, she has promoted business development and business transformation as the top management of its Japanese subsidiary for many years and has abundant management experiences as an international business executive and broad knowledge including sustainability promotion.
Concurrent offices
External Director, Sumitomo Mitsui Financial Group, Inc. ActivitiesExternal Director, KAO Corporation External Director, Astellas Pharma Inc.
29 June , 2023 Appointed as Director
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The Group has filed the Corporate Governance Report to TSE.
Please refer to the Group's Corporate Governance Report (as of 30 June 2023).
Disclosure based on the principles of the Corporate Governance Code- Principle 1.4 : Cross-Shareholdings
- Principle 1.7 : Related Party Transactions
- Supplementary Principle 2.3.1 : Sustainability Issues, Including Social and Environmental
- Supplementary Principle 2.4.1 : Ensuring Diversity, Including Active Participation of Women
- Principle 2.6 : Roles of Corporate Pension Funds as Asset Owners
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Principle 3.1 : Full Disclosure (i) Business principles, business strategies and business plan
- NSG Group management principles "Our Vision"
- NSG Group Medium Term Vision and Medium Term Plan "Revival plan 24" (RP24)(2022/4-2024/3)
- Supplementary Principle 3.1.3 : Initiatives on Sustainability
- Supplementary Principle 4.1.1 : A brief summary of the scope of authority delegated to the management
- Supplementary Principle 4.1.3 : Roles and Responsibilities od the Board(1) CEO's succession plan
- Supplementary Principle 4.2.1 : Roles and Responsibilities od the Board(2) Determination of the executive remuneration system and the remuneration amounts
- Supplementary Principle 4.2.2 : Roles and Responsibilities od the Board(2) Basic policy for the company's sustainability initiatives
- Supplementary Principle 4.3.2 : Roles and Responsibilities od the Board(3) Appointment of CEO
- Supplementary Principle 4.3.3 : Roles and Responsibilities od the Board(3) Dismissal of CEO
- Principle 4.8 : Effective Use of Independent Directors
- Principle 4.9 : Independence Criteria and Qualification of Independent Directors
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Principle 4.10.1 : Use of Optional Approach
- Terms of Reference of Nomination Committee
- Terms of Reference of Compensation Committee
- Supplementary Principle 4.11 : Preconditions for Board and Kansayaku Board Effectiveness
- Supplementary Principle 4.11.1 : Views on the appropriate balance of knowledge, experiences and competence of the Board of Directors as a whole, its diversity and appropriate size, and the policy and the procedure for nominating Director candidates
- Supplementary Principle 4.11.2 : Concurrent positions held by Directors
- Supplementary Principle 4.11.3 : Results of Evaluation of the Effectiveness of the Board of Directors
- Supplementary Principle 4.14.2 : The training policy for Directors and etc.
- Principle 5.1 : The policy for constructive dialogue with shareholders
- Principle 5.2 : Establishing and Disclosing Business Strategies and Business Plan
- Supplementary Principle 5.2.1 : Establishing and Disclosing Business Strategies and Business Plans
The Company adopts a company with three committees structure and the Compensation Committee, which holds a majority of Independent External Directors, decides the following matters.
- The policy on compensation and perquisites to be offered to the Directors and Executive Officers of the Company
- Individual compensation and perquisites to be offered to the Directors and Executive Officers of the Company.
The objectives of the compensation policy are to ensure that packages of employment terms and conditions are market competitive and designed in such a way as to attract, retain and motivate Executive Officers of the highest world-class caliber in an international business.
The policy aims to ensure that each individual's basic salary and incentives are aligned with the performance of the Group and the interests of shareholders as well as reflecting the commitment and achievements of the individuals concerned. While some elements of the packages of the Executive Officers may vary depending on the market conditions in the countries in which they are directly employed, annual bonus and long-term incentive plans follow a global policy and are structured, designed and coordinated at the Group level.
Compensation Policy for Independent External DirectorsThe role of Independent External Directors is to supervise all Group business from their independent and objective standpoint as well as to engage in the material decision-makings as members of the Board of Directors. In order for them to fulfill this role adequately and effectively, and for the Group to retain individuals with the capability and experience required, the appropriate compensation level of Independent External Director is set based on comparisons with other companies using benchmark data provided by external specialists.
Independent External Directors receive compensation for the performance of their duties. They are not eligible for performance-linked bonuses or awards under long-term incentive plans.
For details, please see the following.
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NSG - Nippon Sheet Glass Co. Ltd. published this content on 03 July 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 July 2023 06:37:09 UTC.