Ensuring Objectivity in Nominations and Compensation through the Nomination and Compensation Advisory Committee

「As an advisory body to the Board of Directors, the company has established a Nomination and Compensation Advisory Committee whose members are composed of a majority of outside directors and whose chair is an outside director. By referring the nomination and compensation of directors to the committee for deliberation, the company ensures fairness and objectivity.」

「As an advisory body to the Board of Directors, the company has established a Nomination and Compensation Advisory Committee whose members are composed of a majority of outside directors and whose chair is an outside director. By referring the nomination and compensation of directors to the committee for deliberation, the company ensures fairness and objectivity.」

「Regarding the policy for determining the composition of each director’s compensation by type, no specific ratios are prescribed. The basic policy is to increase the proportions of performance-linked compensation and share-based compensation over the medium to long term, while maintaining a flexible compensation structure based on each director’s contribution to performance in the previous consolidated fiscal year.」

「In governance consulting, demand has been growing, particularly among institutional shareholders, for the use of third-party organizations to evaluate Board effectiveness. In addition, ensuring fairness in evaluating Board effectiveness has become one measure for addressing activists, resulting in growth in engagements for Board effectiveness evaluation services. Engagements for executive search services, including outside directors, have also grown steadily, supported by moves to increase the ratio of outside directors on boards.」

「As an advisory body to the Board of Directors, the Nomination and Compensation Advisory Committee deliberates on the establishment, amendment and abolition of basic policies concerning the appointment, reappointment and dismissal of directors of the company and its principal subsidiaries; the development of compensation systems, including the formulation of policies for determining compensation for directors and key employees of the company and its principal subsidiaries; matters concerning the appointment, reappointment and dismissal of directors of the company and its principal subsidiaries; and the appropriateness of individual compensation and other matters, including policies concerning individual compensation. The committee also provides advice and recommendations to the Board of Directors. During the fiscal year, it deliberated on executive compensation for directors of the company and its principal subsidiaries as follows: 15 February 2018: First meeting of the Nomination and Compensation Advisory Committee (consideration of whether to continue share-based compensation, etc.); 19 April 2018: Second meeting of the Nomination and Compensation Advisory Committee (compensation amounts and eligible recipients).」

「The revised Corporate Governance Code, adopted in June, has attracted strong interest not only from companies but also from institutional investors, and governance consulting tailored to institutional investors is expected to increase as a response to new challenges facing companies.」

「As an advisory body to the Board of Directors, the company has established a Nomination and Compensation Advisory Committee chaired by an outside director. By referring the nomination and compensation of directors to the committee for deliberation, the company ensures fairness and objectivity.」