Corporate Governance Basic Policy（PDF97KB）
Showa Denko continuously promotes corporate governance to ensure the soundness, effectiveness, and transparency of management, and to contribute enhancing its corporate value, thereby contributing to the sound growth of society and earning its full trust and confidence. To that end, it is essential for the Company to strengthen relations with its stakeholders, including shareholders, customers, suppliers, community residents, and employees. Based on the above, the Company has clarified its mission in the form of Our Vision and Showa Denko is working hard to realize this Vision.
■ Corporate governance structure
Implementation status of corporate governance measures
We introduced the corporate officer system to draw a clear line between the two functions of management supervision and business execution. The top management team, consisting of the President and corporate officers in charge of respective operations, has been working for prompt and dynamic decision-making in the areas of management. Meanwhile, we substantially reduced the number of directors. We also reinforced the supervision capacity of the Board of Directors by appointing a minimum of two Independent Outside Directors.
Board of Directors
The Board of Directors decides basic policies of the Company. It also thoroughly discusses and makes decisions regarding matters specified in the Companies Act or the Company's Articles of Incorporation as well as important issues in executing business operations, while promoting prompt and dynamic decision making on management.
We appoint directors with emphasis on the viewpoint of corporate governance, aiming to strengthen the Board of Directors' monitoring and supervisory functions and ensure the propriety of decision making process. We have adopted a management system in which corporate officers dedicate themselves to business execution, which is their primary duty, but do not concurrently serve as directors, in principle. Furthermore, we have abolished the system of officer directors except the Chairman and the President, while strengthening monitoring by Auditors including outside Auditors and mutual supervision among directors.
The term of office of directors is set to one year to ensure a quick and flexible formation of management team corresponding to changes in the business environment.
Management Committee and R&D Committee
The Management Committee, which is chaired by the President, deliberates and decides on matters to be referred to the Board of Directors' meetings and important matters pertaining to overall management of the Company. The decisions are made after deliberations on two occasions. As for the investment issues to be submitted to the Management Committee, risk analysis as well as achievement/progress management are conducted in advance, through preliminary risk reviews and examinations by a relevant task team. The basic business policies including Company's medium-term business plans are decided not only through the deliberation of the Management Committee but also through sufficient examination by all corporate officers.
The R&D Committee deliberates and makes decisions on important issues related to research and development.
Showa Denko positions CSR Committee at the top level of our corporate governance system to check all management measures from the CSR perspective. We also established the Security Export Control Committee and Safety Measures Committee under the CSR Committee. Moreover, we set up Responsible Care Promotion Council, Risk Management Promotion Council, Human Rights/Corporate Ethics Promotion Council and IR Promotion Council to deliberate on the respective matters.
Board of Auditors
Showa Denko employs an auditor system. The Auditors attend the Board of Directors meetings and other important internal meetings, offering opinions as necessary. They conduct audits on execution of business operations through on-site investigations, interviews with responsible persons, and reference to important documents so as to provide suggestions, advice, and recommendations for securing soundness in management. They also audit group companies in cooperation with auditors of major affiliated companies.
Overview of Governing Bodies/Committees/Councils
|Governing Body||Members||Meeting frequency|
|Board of Directors||
||Once or twice a month
(The board had 15 meetings in 2015. The average rate of attendance was 97%.)
||Once a week in principle|
|CSR Committee||Same as above||Twice a year in principle|
|Board of Auditors||5 Auditors (Three of them are outside Auditors. (One is female.))|
Internal Audit Department
We have the Internal Audit Department reporting directly to the President. The Internal Audit Department investigates the overall
execution of business including group companies and verifies its accuracy, validity and efficiency. It also investigates and verifies the functional state of management policies, business plans and internal control systems. The results of internal auditing are also reported to the Auditors for mutual cooperation with Auditors' auditing.
Showa Denko concluded an auditing contract with KPMG AZSA, and this audit corporation performs accounting audits for the Company.
The Accounting Auditor confirms the annual audit plan with the Auditors and reports the audit results to them. The Accounting
Auditor and the Auditors also exchange information and views as required, to promote their cooperation.
Policies and procedures of the Board of Directors in the selection of senior management personnel and the nomination of candidates for Directors and Auditor & Superisory Board Members
Candidates for Directors must possess sufficient knowledge, experience and capabilities to fulfill their obligations as Directors.
Senior management personnel are selected by additionally taking into account, among others, their corporate and individual performance. Candidates for the Audit & Supervisory Board Members must possess, in addition to an appropriate level of expertise in the areas of finance and accounting, sufficient knowledge, experience and capabilities to fulfill their obligations as Audit & Supervisory Board Members.
In 2016, thadvisory body to the Board of Directors. With Independent Outside Directors forming the majority of its members, the Committee deliberates the nomination of candidates for Directors and Audit & Supervisory Board Members, as well as the selection of senior management personnel, and submits recommendations to the Board of Directors.
Explanation regarding the selection of senior management personnel and the nomination of candidates for Directors and Audit & Supervisory Board Members
Reasons why each candidate has been nominated are stated in the Reference Materials for the General Meeting of Shareholders.
Independence standards and credentials required of Independent Outside Directors
The Board of Directors has established independence standards for Outside Directors based on independence criteria stipulated by law and the Tokyo Stock Exchange and selects candidates who meet the standards. See the Attachment of Corporate Governance Basic Policies for the independence standards.
Policies and procedures for the Board of Directors in determining the remuneration of senior management personnel and Directors
Effective as of 2016, the remuneration of Executive Directors and Corporate Officers consists of base remuneration (which is based on titles, etc.) as well as short-term performance-linked remuneration and mid- to long-term performance-linked remuneration (which is determined in consideration of corporate and individual performance, etc. based on the performance evaluation system). The Remuneration Advisory Committee was established in November 2015 as an advisory body to the Board of Directors and a majority of its members are Independent Outside Directors and Outside Auditors. It deliberates the remuneration of each Executive Director and Corporate Officer and submits recommendations to the Board of Directors.
Remuneration of Outside Directors consists of base remuneration only.
The remuneration to the Auditors is determined through deliberation at the Board of Auditors.
|Paid amount||Number of applicable persons|
|Directors(excluding outside Directors)||¥236 million||7|
|Auditors(excluding outside Auditors)||¥56 million||2|
|Outside Directors and Auditors||¥65 million||6|