Corporate Governance

Basic Approach to Corporate Governance

Nissha, since its foundation, has been executing strategies that promptly address external challenges, under committed leadership. The Company believes that strengthening corporate governance along with such leadership will promote agile and decisive decision making, as well as ensuring management transparency and fairness. Based on this recognition, the Company places corporate governance as one of the key management issues, strives to maintain and improve it, and seek out sustainable corporate growth and an increase in corporate value over the medium- to long-term.
In an effort to clarify the Nissha Group’s basic approach to and policy for implementing corporate governance, in October 2015 we established a Corporate Governance Policy.

Evolution of Governance

2007 ・ Reduced the term of office of Director of the Board from 2 years to 1 year and clarified management responsibilities for each fiscal year
・ Appointed 1 Independent Outside director
・ Abolished the executive retirement benefits system
2008 ・ Adopted Corporate Officer System, separating the functions of strategy formulation and management oversight performed by the Board of Directors and business execution functions of the Corporate Officer
・ Reduced the number of Director of the Board from 14 to 9 and increased the number of Independent Outside Directors from 1 to 2
2014 ・ Increased the number of Independent Outside Directors from 2 to 3, and appointed a female Director of the Board (Independent Outside)
2015 ・ Corporate Governance Policy is released.
・ Established the Nomination and Compensation Committee, Independent Outside Directors account for the majority of the committee members and serve as the chairman, and started operation
・ Appointed 1 foreign Corporate Officer
2016 ・ Started analysis and evaluation of the effectiveness of the Board of Directors
・ Increased the number of Independent Outside Directors from 3 to 4
・ Increased the number of foreign Corporate Officers from 1 to 2
・ Started operation of performance-linked stock compensation plan for Directors of the Board (excluding Independent Outside Directors) and Corporate Officers
2019 ・ Appointed a foreign Director of the Board (Independent Outside)

Diversity of the Board of Directors

Our Board of Directors are appointed taking into account diversity and balance between the experience, knowledge, and skills of the individual to ensure that the Board fulfills its role of making important management decisions and overseeing the execution of duties by Directors of the Board and Corporate Officers.

Management attribute

Skills Matrix (Our Views)

The Company considers the optimal and balanced distribution of experience, knowledge, and skills among the Board of Directors in those fields that are necessary based on our management strategy to be key for the Board to make important management decisions and exercise high levels of effectiveness in supervising the execution of the Company's business. In addition, those fields will change as the business environment changes.

Where we want to be by 2030 is currently presented in the form of our Sustainability Vision (long-term vision for 2030). In addition, we have established a medium-term strategy reflecting backwards the Sustainability Vision for 2030, and formulated strategies to take us there in the form of medium-term business plans of three years. For us to achieve them, we consider the experience, knowledge, and skills in the following fields of particular importance for the Company’s Board of Directors.

Our views on the required fields and the skills matrix are as follows.

Our views on the required fields

  • Internationalism
We are a company with a global reach, and our Directors of the Board must have experience of management and business overseas, an awareness of the global business environment, and expertise in them.
  • Corporate management, Management strategy
  • Business development, Business strategies, M&A
  • Sales, Marketing
  • Production, Quality, Technology, Research and development
To effectively debate growth strategies at the Board of Directors meetings, it is necessary to have practical experience and knowledge of the fields to the left.
  • Experience and knowledge in priority markets
To effectively debate growth strategies at the Board of Directors meetings, it is necessary to have practical experience and knowledge of priority markets (Medical Devices, Mobility, Sustainable Materials, IT Devices) stipulated in the 7th Medium-term Business Plan.
  • Finance
  • HR strategies
  • Legal, Risk management
The Board of Directors must have members with practical experience and knowledge in each of the fields to the left that form the basis for all judgments, in order to make important management decisions and exercise high levels of effectiveness in supervising the execution of the Company's business.

Skills Matrix

Skill Matrix

*Term and generation are at the conclusion of the general meeting of shareholders in March 2021.
*The above fields are those where Directors can particularly exercise their specializations based on the experiences, etc. of each member of the Board. It does not show all the experiences, knowledge, or skills possessed by each Director. 

Corporate Governance Structure

We have established a corporate governance structure as shown in the figure below.
*as of January 1, 2022

Nissha’s Management and Business Execution System

The Board of Directors

The Board makes decisions on matters that require resolution by the Board as stipulated by legislation and our Articles of Incorporation, as well as on important managerial matters as stipulated by the Regulations of the Board of Directors and other internal regulations, and oversees business execution by Directors of the Board and Corporate Officers.

Our Board of Directors meetings involve brisk, substantive discussions. Independent Outside Directors of the Board draw on deep insight into their respective fields of specialty to provide accurate advice and opinions, contributing to the enhancement of both management transparency and the Board’s oversight functions.

Once a year since April 2016, our Board of Directors analyzes and evaluates board membership and operation in the previous fiscal year toward continuous improvement in the effectiveness of corporate governance.
 

Nomination and Compensation Committee

We establish a Nomination and Compensation Committee as an advisory panel for the Board of Directors in order to ensure the objectiveness and fairness of the appointment/dismissal of Directors of the Board and the appointment of Audit & Supervisory Board Members, as well as the compensation of the Directors of the Board.
The chair and the majority of the members are selected from Independent Outside Directors of the Board.

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