We believe that it is our foundational and important managerial task to establish and maintain a fair and efficient management system, while securing soundness and transparency in management, in order to enhance corporate value by fulfilling our corporate social responsibilities. We will keep on carrying out efficient and sound business operations to pursue corporate philosophy by enhancing corporate governance for fulfilling our responsibilities to stakeholders.
Corporate Governance System
The following framework has been built for decision-making, supervising, and execution of management.
Board of Directors and Directors
Board of Directors is composed of 10 directors, 3 of which are outside directors.
Meetings of the Board of Directors are held regularly once a month as well as whenever necessary for deliberation and determination with respect to issues as prescribed in applicable laws and regulations or articles of incorporation as well as other managerial key issues, and also for supervision of business execution status in response to reports from the directors. Additionally, Management Meetings composed of Directors are held regularly once a month for discussion and pre-grasping about business challenges to be addressed, and any possible risk that involves our company for enhancing the system that can be flexibly adaptable to change in the managerial environment.
We have introduced Corporate Officer framework on April 2012 for the purpose of prompt execution of duties based on various policies determined by Board of Directors and clarifying resultant responsibilities. Board of Directors has nominated 23 corporate officers (7 of them work as directors) who share information, and exchange opinions on the status report concerning execution of duties in a cross-sectional way in Corporate Officers’ Meeting to be held once a month. Each term of Board of Directors and Corporate Officers’ Meeting is one year.
Board of Auditors and Auditors
Board of Auditors is composed of 4 auditors, 2 of which are outside auditors.
Two full-time auditors serve to audit execution of duties by the directors through regular opinion exchange with the representative director, and auditing of major offices and subsidiaries. Meanwhile, the outside auditors serve to audit execution of duties by the directors through attendance of Board of Directors. The auditors will attend various meetings and committee meetings whenever necessary.
Independency of Outside Director/Outside Auditor
The outside directors perform supervision while taking the position independent from business execution by stating opinions from broad point of view in important meetings such as Board of Directors. The outside auditors perform audits on the background of technical knowledge while adopting multilateral viewpoints by stating opinions in important meetings such as Board of Directors.
The outside directors and outside auditors are designated as independent officers. They may be nominated in accordance with both the criteria prescribed by stock exchange, and our own criteria in order to ensure that the candidate has no special relationship with management and major shareholders of our company, and no conflict of interest against the general stockholders.
We have established “Internal Auditing Office” as an independent department. Through audits of NGK SPARK PLUG CO., LTD., and its group companies, the Internal Auditing Office reports the audit results to management and makes proposals to correct problems and improve business operations as necessary. Departments that receive a proposal for improvement formulate and implement improvement plans and the Internal Auditing Office monitor the implementation status. The Internal Auditing Office assesses the effectiveness of internal control over financial reporting in accordance with the internal control report system pursuant to the Financial Instruments and Exchange Act so as to secure the reliability of financial reporting, thereby working to maintain and improve internal control.
Internal Auditing Office will ensure effective and efficient audit through exchanging views on each of the audit plans and results with corporate auditors or independent external auditors or both, from time to time on a regular or necessary.
Remuneration for Director and Auditor
We have established optional nomination/remuneration committee on April 2017 for rationality and transparency of nomination/determination of remuneration for the director. Since June 2017, targeting the directors and the corporate officers, we have introduced the share-based remuneration system of performance-based type as the executive remuneration system with high transparency and objectivity based on business performance for the purpose of raising awareness of contribution to improvement of business results on the medium- to long-term basis, and enhancement of the corporate value. This system is intended to evaluate the attainment level of business operations in terms of consolidated sales, consolidated operating profit, and ROIC as indexes for four business years from fiscal 2017 to 2020 within our medium-term management plan period.
Remuneration and bonus paid to directors and auditors in fiscal 2017
|Remuneration (except bonus)||Bonus|
|Number||Amount (million yen)||Number||Amount (million yen)|
* Including remuneration paid to one director and two auditors resigned at the conclusion of 117th annual shareholders meeting (held on June 29, 2017).
* Maximum amounts of remuneration paid to the directors were set by a resolution made at the 117th annual shareholders meeting (held on June 29, 2017) as follows.
* Maximum amounts of remuneration paid to the auditors were set by a resolution made at the 106th annual shareholders meeting (held on June 29, 2006) as follows.