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Corporate Governance

We are working on continuously improving our systems and their operation to strengthen and enhance a viable corporate governance.

Our basic approach to corporate governance and
our corporate governance system (as of June 22, 2021)

Under the Nippon Shokubai Group's Mission of "TechnoAmenity - Providing affluence and comfort to people and society, with our unique technology," we will increase our corporate value and achieve sustainable growth. We consider viable corporate governance to be essential and have adopted initiatives toward that end. We ensure the rights and equality of our shareholders and maintain an open dialogue, collaborate with various stakeholders as appropriate, disclose information as appropriate and ensure transparency, ensure that the roles of Board Meeting and management teams relate to the appropriate execution of duties, ensure appropriate supervision of the execution of these duties and strengthen and enhance our internal control systems.

Roles and Functions of Various Bodies and Committees

Board Meeting
Comprising nine Members of the Board, including three Outside Members of the Board, Board Meeting supervises the business operations of each Member of the Board through reports, deliberations, and resolutions regarding important matters. In general, meetings are convened monthly under the chairmanship of a Member of the Board selected from members who are not executive officers by a resolution of the Board Meeting. Four Statutory Corporate Auditors, including two External Statutory Corporate Auditors, also attend to give advice and state their opinions when necessary.
Corporate Managing Committee
Comprising the President and executive officers appointed by the President, this committee generally convenes twice monthly (with all executive officers in attendance at one of these meetings) to deliberate on items related to the implementation of basic policies and important management issues. Among proposals discussed by the Corporate Managing Committee, important issues are forwarded to Board Meeting for consideration.
Auditors Meeting
Comprising four Statutory Corporate Auditors, including two External Statutory Corporate Auditors, this meeting usually convenes monthly, submits reports and engages in discussions and deliberations on important matters related to audits.
Nominating and Compensation Committee
An advisory body to the Board Meeting, this is a voluntary organization comprising three or more Members of the Board (including a majority of Outside Members of the Board). It advises on the election/dismissal of the President and Representative Member of the Board, as well as draft nominations of candidates for Members of the Board and Statutory Corporate Auditor positions and on compensation and bonuses for Members of the Board.
TechnoAmenity Promotion Committee
We believe that promoting sustainability initiatives is the practice of the Nippon Shokubai Group Mission "TechnoAmenity- Providing affluence and comfort to people and society, with our unique technology," and we are engaged in sustainability initiatives. We regard the promotion of sustainability initiatives as the core concern of our management. The committee determines the policies and strategies related to sustainability and gives the directions to related departments and evaluates its performance.

Evaluation of the effectiveness of the Board Meeting

Method of evaluating the effectiveness of the Board Meeting in fiscal 2020

Based on analyses and evaluations of the results of a questionnaire distributed to all Members of the Board and Statutory Corporate Auditors, an opinion exchange meeting was held between all Members of the Board (independent external) and the President and Representative Member of the Board. Based on these, the evaluation of the effectiveness of the Board Meeting was summarized at a Board Meeting.

Evaluation result

The Board Meeting was properly functioning in all aspects of its structure, operation, deliberation and reporting, supervising the execution of duties, and supporting system, and it confirmed the effectiveness of Board Meeting. It also confirmed that the measures formulated in response to the points that required improvement identified in the evaluation of the previous year as "continuous and more deeper explanations and discussions about the important strategies and issues of our Group companies, and the strategies and issues of our existing and new business, and collaborations with our stakeholders such as shareholders and investors as well as customers and employees" have been well implemented.

Initiatives planned for the future

With a view to further increasing the effectiveness of Board Meeting, we will make continuous efforts in response to the results of the evaluation, which showed the required improvements of ongoing explanations and discussions to better understand the whole business such as issues, risks and prospects, and business environment and strategies, including reviews of past decision-makings, of our existing and new business, further improvements in the preparation of materials of the Board Meeting, holding opinion exchange meetings among Outside Members of the Board, and enhancement of training sessions for the Board Members.

Outline of the executive remuneration system

Policy for determining remuneration for Members of the Board and Statutory Corporate Auditors

The remuneration, etc. for internal Members of the Board of Nippon Shokubai consists of basic remuneration and bonuses. Basic remuneration consists of a fixed remuneration portion and a performance-linked remuneration portion. The index used for the performance-linked remuneration is “ROA (ratio of profit before income tax to total assets).” Bonuses are resolved and determined at the General Meeting of Shareholders each time payment is made, taking into account the profits for the relevant fiscal year and other circumstances. Outside Members of the Board and Statutory Corporate Auditors receive only a basic remuneration (in principle, fixed remuneration) because remuneration linked to earnings is not appropriate for these individuals who oversee business operations from an independent standpoint.
Also, the Nominating and Compensation Committee, a voluntary organization consisting mainly of independent Outside Members of the Board, has been established to receive advice for remunerations and bonuses of Members of the Board, thereby ensuring transparency and fairness.

Procedure for determining remuneration for Members of the Board and Statutory Corporate Auditors

Remuneration is determined by resolution at the Board Meeting upon receiving advice of the Nominating and Compensation Committee, a voluntary organization consisting mainly of independent Outside Members of the Board, thereby ensuring transparency and fairness.