Corporate Governance Organization
Taiyo Nippon Sanso's Board of Directors consists of 9 members, two of whom are independent, and operates to ensure correct business judgement. It holds a regular meeting every month to discuss important matters and hear reports about business activities.
The firm has established an Advisory Committee on Appointments and Remuneration as a discretionary advisory committee under the Board of Directors. The company president (CEO) and independent outside directors are the members of this committee. The committee is chaired by an independent outside director.
The committee strives to ensure transparency and objectivity in decision making by seeking advice from the independent outside directors when consulted by the Board of Directors on revising bylaws concerning director remuneration, when selecting candidates for the positions of director or auditor, when appointing and dismissing the president (CEO), when appointing and dismissing executive officers, and when choosing successors to the president (CEO). The committee also advises the Board on revisions of the Company's internal regulations on director's compensation.
In addition to the Board of Directors, the Management Council, which meets twice a month in principle and consists of full-time directors, business division heads and suchlike, is set up for prompt decision making. The term of a director is limited to one year to facilitate responsible management in each fiscal year.
Under the provisions of Article 427, Paragraph 1 of the Company Law, Taiyo Nippon Sanso has entered into contracts with the two independent directors to limit their liability for damages in accordance with Article 423, Paragraph 1 of the Company Law, and to set their minimum liability for damages in accordance with Article 425, Paragraph 1 of the Company Law. The Audit & Supervisory Board also consists of four members, three of whom are independent. Audit & Supervisory Board members attend meetings of the Board of Directors and the Management Council, independently audit the business activities of directors and impartially give advice to the Board and Council. The Audit & Supervisory Board hears reports on the plans and results of audits from accounting auditors. Furthermore, working with the Accounting Auditor and Corporate Audit Office, it also meets to hear explanations of internal audit results from the Corporate Audit Office.
Furthermore, working with the Accounting Auditor and Corporate Audit Office, it also meets to hear explanations of internal audit results from the Corporate Audit Office.
Compensation for Directors
Compensation for directors and Audit & Supervisory Board Members in Fiscal Year 2018 (from April 1, 2018 to March 31, 2019) was as shown below. In this regard, compensation for directors consists of basic compensation, medium-term performance-based compensation and short-term performance-based compensation. Medium-term performance-based compensation fluctuates according to the degree of target achievement in each fiscal year towards the medium-term management plan goal, and short-term performance-based compensation fluctuates according to the degree of performance prudence since the performance of the previous fiscal year.
Compensation for Directors in Fiscal Year 2019 Breakdown
|Compensation paid to directors||273|
|Compensation paid to Audit & Supervisory Board Members||103|
|Compensation paid to accounting auditors in fiscal year 2019||149|
|Total amount of monetary and property compensation paid by the Company and its subsidiaries to accounting auditors||212|
Taiyo Nippon Sanso recognizes that ensuring the timely disclosure of corporate and financial information is a key component of corporate governance, and is taking steps to fulfill its obligation to provide adequate explanations to investors as well, and to ensure that investor feedback is properly communicated to management. In an effort to translate this commitment into action, company officers attend two presentations for analysts and institutional investors every year, where they participate in question-and-answer sessions with the participants on such topics as the Company's performance, forecasts for subsequent periods and the formulation and progress of medium-term management strategies, and endeavor to respond in a manner that provides both information and deep insight as representatives of the Company.
Risk management and compliance promotion
Taiyo Nippon Sanso has established the Risk Assessment Committee as a risk management system for the entire Group. The committee defines and evaluates the risks of the Group, clarifies the department responsible for each risk, and constantly reviews appropriate risk management frameworks through activities aimed at investigating and reducing risk.
Taiyo Nippon Sanso recognizes the need to manage risks in the following categories in particular: security, safety, quality assurance, environment and intellectual property. To oversee risk management and address related issues across the Group, we have published the Technological Risk Control Code, which is managed by Technological Affairs Division, and also established the Technology Risk Management Committee. Both the Risk Assessment Committee and the Technology Risk Management Committee regularly report their activities to the Board of Directors.
Furthermore, we have published the Taiyo Nippon Sanso Group Code of Conduct and accompanying guidebook, which outlines the standards of conduct for all officers and employees to observe in daily operations in relation to compliance with social morality, laws and ordinances, corporate ethics and internal guidelines. To enforce this code, we have also established the Internal Control Office, which is directly controlled by the president. We have also appointed the Group Compliance Officer (GCCO) and Regional Compliance Officers (RCCOs) in Japan and 7 overseas regions.
The GCCO and RCCOs have control over compliance promotion activities and try to enhance and instill compliance promotion activities within the Group.
We have established the Compliance Committee led by the Japanese CCO in Japan, and the Global Compliance Committee led by the GCCO and consisting of RCCOs in each of the overseas regions. The Compliance Committee and Global Compliance Committee regularly report to the Board of Directors.
In addition, we have set up Compliance Helplines both in Japan and overseas and made them known to the employees. The system enables them to promptly seek advice when they discover suspected illegal or unfair acts, thereby ensuring the early detection and correction of compliance infringements.
Taiyo Nippon Sanso has also established a Technical Audit Office, which is part of its Technological Affairs Division, and an Audit & Supervisory Board that is directly controlled by the president, to audit business activities across the Group and to ensure laws and internal regulations are followed.
Furthermore, we have established the Information Management Committee, which allows the related departments to participate in the efficient management of information, including that relating to personal, technical, sales, and financial matters, held by Taiyo Nippon Sanso.