Basic Policy on Corporate Governance
Through fair and efficient corporate activities, the Company always intends to be trusted by all our stakeholders including shareholders, customers, partner companies, local communities and employees, and to be a continuously growing company, while making a further contribution to the international community. In order to realise that intention, the Company considers that the enhancement of the corporate governance is one of the most important issues for proper corporate management and is aggressively taking various kinds of measures.
Also, in order to be trusted further by society and stakeholders, we disclose information quickly in fair and accurate manner prescribed in laws and regulations and aggressively disclose information that we concluded is beneficial to understand the Company. We will further enhance the transparency of the Company.
Corporate Governance System
The Company has elected to be a company with Audit & Supervisory Board.
In addition to the supervisory function of execution of business by the Board of Directors and the auditing function by the Audit & Supervisory Board, establishment of Advisory Committee on Personnel and Remuneration, etc. of which highly independent Outside Directors and Outside Auditors as the advisory body of the Board of Directors enables enhancement of governance.
[Board of Directors]
The Board of Directors is composed of 8 Directors and its meetings are held once in a month and whenever necessary. The Board of Directors discusses important managerial matters besides the matters set forth in the Articles of Incorporation and the laws and regulations, and makes decisions through sufficient discussion including legal compliance and corporate ethics view points, and is strengthening oversight of business execution. In addition, the Company has elected 2 Outside Directors who maintains high degree of independence and have no possibility of causing conflict of interest between them and shareholders to further enhance supervision to management and receiving beneficial advice and indication to the management of the Company based on rich experience and professional knowledge.
Also, the Company has introduced Executive Officers system for the purpose of enabling the agile execution of operation and clarifying individual responsibilities.
In order to clarify managerial accountability for individual Directors and flexibly respond to the changing business environment, the term of each Director is set to one year.
[Executive Committee and other various meetings on management and execution of operation]
The Company holds meetings attended by Representative Directors and other Directors and Managing Officers concerned to quickly deliberate and decide important managerial issues and measures to be taken. In addition, the Company holds meetings attended by Directors, Company Auditors, Executive Officers and Executive General Managers, etc. to report and exchange information related to management. Both meetings are regarded as Executive Committee meetings and are held periodically and whenever necessary.
Also, various meetings are held periodically and whenever necessary to deliberate business plans etc. and to receive reporting on operation of the company, enabling the Company to appropriately plan, identify administrative issues and grasp the situation on execution of operation.
In such way, the Company is enhancing efficiency of decision making at the Board of Directors meetings and supervision on execution of operation.
[Advisory Committee on Personnel and Remuneration, etc.]
Aimed to enhance clarity and objectivity upon electing candidates for Directors and Auditors, as well as deciding remuneration of Directors, as an advisory committee for the Board of Directors, the Company establishes “Advisory Committee on Personnel and Remuneration, etc.”.
The Committee is composed of 5 persons including 3 Outside Company Directors (2 Outside Directors and 1 Outside Company Auditor).
The Committee discusses issues such as election standards and adequacy of candidates for Directors and Auditors, as well as adequacy of system and level of Director’s remuneration. The Board of Directors decides based on their results.
Decision for election and remuneration of candidates for Managing Officers are also based on results of the Committee’s discussion.
[Corporate Governance Committee]
For sustainable growth and enhancing the mid- and long-term corporate value in the Group, the Corporate Governance Committee has been in place to advance compliance with laws and relations and examine matters including risk management as well as promote the implementation of measures and policies thereof.
[Company Auditor’s Audit]
The Audit & Supervisory Board of the Company is composed of five Company Auditors including three Outside Company Auditors.
Pursuant to the standard for the Company Auditor’s Audit, set forth by the Audit & Supervisory Board, and following the policy of auditing and division of duties, each Company Auditor has audited the execution of business in the Company in an appropriate manner by attending not only Board of Directors meetings but also important meetings such as the Executive Committee, viewing circular resolutions, meeting minutes and other documents as well as receiving reports or having hearings on the state of business from Directors.
In addition, the Company has established the Secretariat of Audit & Supervisory Board as the dedicated staff organisation that is independent from the chain of command of Directors, etc. in order to reinforce a supportive system for duties of Company Auditors.
The Audit Department is the internal auditing organisation independent from the chain of command and directly reporting to President. It is staffed by experts in wide range of fields and audits the Company, subsidiaries and affiliated companies at home and abroad.
Audit Department shall report on a regular basis on the results of internal audits together with proposals for improving the problems to the Board of Directors meetings and Audit & Supervisory Board in order to take corrective measures at an early stage.
In addition, the Audit Department holds internal audit result briefing session at workplace and at the Company to share information on the results of internal audits with people concerned and continue instruction until completion of improvement.
[Cooperation among Company Auditors, Independent Auditor and Audit Department]
Company Auditors, Audit Department and Independent Auditor cooperate appropriately and audit concerning compliance with laws, internal control, and management efficiency from three different angles.
Company Auditors receive periodical reports from Independent Auditor such as on audit plans and results of quarter reviews, as well as on situation of conducting fiscal auditing. Company Auditors trade comments and share information as necessary to strengthen cooperation, such as by conducting observation of Independent External Auditor’s audit to comprehend situation of conducting auditing, while also receiving reports on the efforts for quality management of auditing as an audit corporation.
Also, Company Auditors adjust audit plans and auditing themes with the Audit Department, attend its audit whenever necessary, and receive reports and explanation on all its audits.
The Audit Department and Company Auditors exchange information with organisation specialised in internal audit, which consists of corporate planning, legal, finance and IT system departments.
[Mutual cooperation of Supervision or Auditing by Outside Director or Outside Auditor for Internal Auditing, Auditor’s Audit and Financial Audit, and relationship with departments of internal control]
The Outside Director and Outside Company Auditor receive the results of the Internal Auditing, Company Auditor’s Audit
and Financial Audit, the results of evaluation on internal control in terms of financial report, the report on performance of whistleblowing system, exchange opinions or information, and make suggestions or indication based on individual knowledge at the Board of Directors, Audit & Supervisory Board and other meetings.
As for independency when Suzuki elects the Outside Director and Outside Company Auditor, we follow “Standard for Independence of Outside Directors and Outside Company Auditors” established based on the criteria related to independency determined by Tokyo Stock Exchange. Suzuki reports all the elected Outside Directors and Outside Auditors to the Tokyo Stock Exchange as independent officers.
＜The Standard for Independence of Outside Directors and Outside Company Auditors＞
The Company never elects any person who falls under any of the followings as a candidate Outside Director or Outside Company Auditor in order to ensure the independence:
- Persons concerned with the Company and its subsidiaries (“the Group”)
- (1) With regard to Outside Directors, any person who is or was a person executing business (Note 1) of the Group at present or in the past,
- (2) With regard to Outside Company Auditors, any person who is or was a Director, Managing Officer or employee of the Group at present or in the past, or
- (3) A spouse or a relative within the second degree of kinship of the present Director or Managing Officer of the Group.
- Persons concerned such as business partners or major shareholders, etc.
- (1) Any person who is a person executing business of any of the followings:
- ①A company of which major business partner is the Group (Note 2)
- ②A major business partner of the Group (Note 3)
- ③A major shareholder having 10% or more of total voting rights of the Company
- ④A company for which the Group has 10% or more of total voting rights
- (2) A person who is or was a representative partner or a partner of the Group’s Accounting Auditor at present or in the past five years
- (3) A person who receives a large amount of remuneration from the Group other than remuneration for Director/ Company Auditor (Note 4)
- (4) A person who receives a large amount of donation from the Group (Note 5)
- (5) A spouse or a relative within the second degree of kinship of the person who falls under category from (1) through (4) above
- (1) Any person who is a person executing business of any of the followings:
- (Note 1) A person executing business : A director executing business, a managing officer, an executive officer or an employee
- (Note 2) A company of which major business partner is the Group : A company which belongs to the group of the business partner who receives 2% or more of its consolidated net sales in the latest business year ended of the group from the Group in any of the business year in past three years
- (Note 3) A major business partner of the Group : A company which belongs to the group of the business partner who makes payment 2% or more of the Group’s consolidated net sales or provides the Group with 2% or more of loans of its consolidated total assets in the latest business year ended of the Group in any of the business year in past three years
- (Note 4) A person who receives a large amount of remuneration : A consultant or legal or accounting expert who receives annual compensation 10 million yen or more (for the organisation, 2% or more of its annual total revenues) in any of the business year in past three years
- (Note 5) A person who receives a large amount of donation : A person who receives annual donation 10 million yen or more (for the organisation, a person directly involved in activities which is the purpose of the donation) in any of the business year in past three years
Policy on Determining the Amounts of Remuneration
[Remuneration of Directors]
Remuneration of Directors (excluding Outside Directors) shall consist of basic remuneration for each position (fixed sum), bonus linked to the Company’s performance of each fiscal year and Restricted Stock linked to the Company’s mid- and long-term performance or stock price. Remuneration of Outside Directors shall be solely basic remuneration (at the fixed amount).
The basic remuneration and bonus shall be within the range of remuneration limit (maximum yearly amount of 750 million yen including maximum yearly amount of 36 million yen for Outside Directors) approved at the General Meeting of Shareholders, the amount of basic remuneration for each Director shall be determined and paid in consideration of the duties and responsibilities of each Director. Bonuses will be paid based on the calculation method linked with indexes such as consolidated performance set by the Company.
Restricted Stock shall be granted within the Remuneration limit (maximum amount of 300 million yen) and maximum number of shares (not more than 100,000 shares a year) approved at the General Meeting of Shareholders and should function as an incentive to realise sustainable enhancement of corporate value and has the purpose of directors to further share the value with the shareholders.
The remuneration of Directors shall be decided by the Board of Directors based on the deliberation results of “Advisory Committee on Personnel and Remuneration, etc.”, of which Outside Directors/Auditors make up a majority of the membership, on the policy regarding the decision of Director’s remuneration, standards, remuneration system and adequacy of the remuneration level.
The basic remuneration shall be within the range of the amount of remuneration limit (monthly amount) approved at a General Meeting of Shareholders, and the amount of remuneration for each Director shall be determined and paid in consideration of the duties and responsibilities of each Director.
[Remuneration of Company Auditors]
Remuneration of Company Auditors shall be solely basic remuneration (at fixed amount), and the amount shall be decided and paid in the discussion among Company Auditors within the range of the amount of remuneration limit (maximum yearly amount of 120 million yen) approved at a General Meeting of Shareholders.
＜(Reference) Revision of reward amount for directors and auditors, etc.＞
“Revision of the amount of remuneration for Directors/Audit & Supervisory Board Members” and “Determination of remuneration due to granting of restricted stock to Directors” were resolved at the 151st Ordinary General Meeting of Shareholders held on 29 June 2017. The outline is as below.
［Remuneration of Directors］
|＜Before revision＞||＜After revision＞|
|Remuneration as the form of share acquisition (excluding Outside Directors)||Up to 80 million yen/month||-|
|Base remuneration (fixed)||Annual: Within 750 million yen (Within 36 million yen for Outside Directors)|
|Bonus (excluding Outside Directors)||Total amount is resolved at the shareholders meeting.|
|Remuneration in the form of restricted shares (excluding Outside Directors)||-||Annual: Within 300 million yen|
［Remuneration of Audit & Supervisory Board Members］
|＜Before revision＞||＜After revision＞|
|Base remuneration (fixed)||Monthly: Within 8 million yen||Annual: Within 120 million yen|