Unipres : Governance［P63-73］(706KB)

Corporate Governance

Basic Approach and Policy

Unipres has established the Sustainability Committee chaired by the President in FY2022 to develop a system ensuring the appropriateness of operations. In promoting an integrated internal control system, we have established the Risk Management Committee and Corporate Ethics Committee under the Sustainability Committee to determine policies and measures and to ensure the appropriateness of operations.

We are fulfilling our corporate social responsibility by promoting activities based on our management philosophy and corporate code of conduct throughout the company and by strengthening our management system on a global level.

OrganizationalSystemforGovernance

In April 2015, Unipres implemented changes to its business management structure. The changes were intended to facilitate prompt managerial decisions and business execution

by clearly separating managerial decision- making and supervision from business execution, as well as to enhance corporate value by strengthening corporate governance. Moreover, the Company sought to strengthen its governance even further by converting from a company with an audit and supervisory board to a company with an audit and supervisory committee at the 77th Regular Shareholders' Meeting held in June 2016.

The Board of Directors, which supervises management, requires that internal directors be knowledgeable about our businesses and have expertise based on work experience in relevant fields, and that outside directors have specialized knowledge and insight related to management in general, laws and regulations, and finance, among others. Consequently, we have a balanced Board. In an effort to ensure diversity on the Board of Directors, we elected two women at the Annual General Meeting of Shareholders in June 2022.

The bodies and chairs of the committees that sustainability and administer internal control are as follows:

• The Sustainability Committee is chaired by the President.
  •The Executive Committee, which passes resolutions on matters delegated to it by the Board of Directors, as well as other important matters relating to business execution, is also chaired by the president.
  •The Chairs of the Environment Committee, Safety and Health Committee, Quality Assurance Committee, Risk Management Committee, and Corporate Ethics Committee are appointed by the President, who chairs the Sustainability Committee. The Environment Committee is chaired by the Executive Officer in charge of general affairs; the Safety and Health Committee, by the Executive Vice President in charge of plants and production; the Quality Assurance Committee, by the Executive Vice President in charge of quality; the Risk Management Committee, by the Executive Vice President in charge of corporate planning; and the Corporate Ethics Committee, by the Executive Vice President in charge of sales.

【Corporate Governance at Unipres Corporation】

Online link:Corporate Governance Report (in Japanese)

Internal Control System Basic Policy

■Nomination and Remuneration Committee

In June 2022, we established the Nomination and Remuneration Committee, a voluntary advisory body to the Board of Directors, in order to strengthen the independence, objectivity, and accountability of the Board's function related to director nominations and remuneration, and to further enhance and strengthen the corporate governance system. The three-member Committee consists of one internal director (Chairman: Yoshio Ito) and two independent outside directors (Hiroko Yoshiba and Sonoe Hasegawa), which means the outside directors account for the majority. The Committee discusses the matter as consulted from the Board of Directors and reports back to the Board.

Target and Result

(✓: 90% or more △: Less than 90% ✗: Less than 50%)

■Board Composition (skills matrix)

We expect our directors to have the following skills.

The percentage of women on the Board of Directors is 22% (2 out of 9 directors).

• Directors and Their Attendance at Board/Committee Meetings

*1 The Board of Directors meetings that Mr. Kiyoshi Doi attended were those that were held after he became a member of the Board on June 23, 2022.

*2 The Board of Directors meetings and Audit and Supervisory Committee meetings that Ms. Sonoe Hasegawa attended were those that were held after she became a members of the Board (a member of the Audit and Supervisory Committee) on June 23, 2022.

*3 Mr. Shigeru Nishiyama's attendance at the Board of Directors and Audit and Supervisory Committee meetings is for the period prior to his retirement as a member of the Board (a member of the Audit and Supervisory Committee) on June 23, 2022.

■Details of Basic Policy on Executive Remuneration

The composition of remuneration for Executive Directors (directors who also serve as executive officers) is determined in consideration of the linkage with business performance and shareholder value, as well as the stability of remuneration.

Specifically, remuneration consists of base remuneration (monetary compensation), short-termperformance-linked remuneration, and long- term performance-linked remuneration.

Basic remuneration is a monthly fixed remuneration based on the position, in consideration of merit, experience, and other factors. Short-termperformance-linked remuneration is a bonus that is a monetary compensation as an incentive for short-term performance improvement.

Long-termperformance-linked remuneration is a restricted stock compensation that causes executives to share the benefits and risks of stock price fluctuations with shareholders and motivates them to contribute to stock price increase and corporate value enhancement. In order to maximize the performance of Executive Directors in the execution of their duties, the percentage of performance-linked remuneration is increased for those with higher positions. Generally, the percentage of fixed remuneration is 50% when performance targets are achieved 100%, and that of performance-linked remuneration (bonuses and stock compensation) is 50%.

For Executive Directors, provisions concerning the forfeiture, reduction, and return of remuneration (clawback and malus provisions)* have been introduced for long-termperformance-linked remuneration (restricted stock compensation).

Outside directors who are not Audit and Supervisory Committee members is rewarded only by stable monthly remuneration, with no link to business performance or shareholder value.

The remuneration for directors who are Audit and Supervisory Committee members is determined, through consultation among such directors, within the total amount of remuneration resolved at the General Meeting of Shareholders.

• Provisions stipulating that in the event of serious misconduct or material breach of laws, regulations, or the like, the stocks shall be returned after the termination of transfer restrictions or shall be forfeited or reduced during the period of transfer restrictions.

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Executive Remuneration

■Details of Basic Policy on Executive Remuneration

The composition of remuneration for Executive Directors (directors who also serve as executive officers) is determined in consideration of the linkage with business performance and shareholder value, as well as the stability of remuneration.

Specifically, remuneration consists of base remuneration (monetary compensation), short-termperformance-linked remuneration, and long-termperformance-linked remuneration.

Basic remuneration is a monthly fixed remuneration based on the position, in consideration of merit, experience, and other factors.

Short-termperformance-linked remuneration is a bonus that is a monetary compensation as

incentive for short-term performance improvement.

Long-termperformance-linked remuneration is a restricted stock compensation that causes executives to share the benefits and risks of stock price fluctuations with shareholders and motivates them to contribute to stock price increase and corporate value enhancement. In order to maximize the performance of Executive Directors in the execution of their duties, the percentage of performance-linked remuneration is increased for those with higher positions. Generally, the percentage of fixed remuneration is 50% when performance targets are achieved 100%, and that of performance-linked remuneration (bonuses and stock compensation) is 50%.

For Executive Directors, provisions concerning the forfeiture, reduction, and return of remuneration (clawback and malus

provisions)* have been introduced for long- term

performance-linked remuneration (restricted stock compensation).

Outside directors who are not Audit and Supervisory Committee members is rewarded only by stable monthly remuneration, with no link to business performance or shareholder value.

The remuneration for directors who are Audit and Supervisory Committee members is determined, through consultation among such directors, within the total amount of remuneration resolved at the General Meeting of Shareholders.

Risk Management

Basic Approach and Policy

In order to promote sustainability management and internal control, the Unipres Group puts in place the necessary systems and other measure for appropriate management to minimize the impact of risks when they become a reality. In doing so, we define risk as the possibility of occurrence of events that prevent Unipres and its subsidiaries from achieving their management policies, and anticipate various risks related to the management of Unipres and its subsidiaries.

Promotion System

The Unipres Group has established the Risk Management Committee under the Sustainability Committee to promote company-wide risk management. The Risk Management Committee reviews and discusses risk management related policies, targets, action plans, progress, and performance, and reports and makes proposals to the Board of Directors and the Sustainability Committee.

The Risk Management Committee is chaired by the Executive Officer in charge of corporate planning, appointed by the Chair of the Sustainability Committee, and it also consists of two vice chairs (the Executive Officer in charge of technology and the Executive Officer in charge of general affairs) and three members (the department head in charge of corporate planning, the department head in charge of general strategy planning, and the department head in charge of general affairs). In addition, a full-time Audit and Supervisory Committee member also attends Committee meetings as an observer. The Risk Management Committee met three times in FY2022.

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Related SDGs

Initiative

■Identifying Risks Using a Risk Management Self-Checklist

In order to manage the risk of loss, we conduct interviews with management personnel and carry out risk assessment and analysis in all divisions of the Company, identify Unipres Group Key Risks, risks requiring responses by the Group as a whole (electrification, quality, sales expansion, the Nankai Trough, cyberattacks, diversity, etc.), and conduct risk reduction activities.

The selection process and the evaluation of the effectiveness of risk reduction activities are discussed and approved by the Sustainability Committee and reported to the Board of Directors on a regular basis.