Shin-Etsu Chemical Co., Ltd.

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TOP > CSR > Management > Governnance

Management

Corporate Governance

The Company considers Corporate Governance to be one of the important management tasks, and it is focusing on the following points.

  • Development of an efficient organizational structure and institutions
  • Ensuring management transparency
  • Strengthening internal controls
  • Timely and accurate disclosure of information

 

Board of Directors, Managing Directors’ Meeting and Audit & Supervisory Board

The Board of Directors consists of 22 members, of whom four are Outside Directors with a wealth of management experience and exceptional insight.

Two organizations to discuss and decide on the execution of operations: the Board of Directors and the Managing Directors’ Meeting, which are each held on a monthly basis as a general rule. The Board of Directors sets out the Company principle and deliberates and makes decisions regarding key aspects of Company operations in accordance with the Companies Act, the Company articles of incorporation, etc. Meanwhile, the Managing Directors’ Meeting makes deliberations and decisions on a variety of other operational issues.

The Company has adopted an Audit & Supervisory Board Member system. The Audit & Supervisory Board is composed of five members, including three Outside Audit & Supervisory Board Members. As well as attending the Board of Directors meetings, Managing Directors’ Meetings, and other important internal meetings, the Audit & Supervisory Board Members review documents, visit factories in Japan and overseas, and carry out other tasks in order to audit the execution of operations by the directors. Furthermore the Audit & Supervisory Board Members also hold monthly meetings with the Auditing Department where they receive progress reports on activities, internal auditing results, the situation of the Auditing Department business, and other matters. In addition, they also provide advice and make requests on topics including these activities and the selection of key auditing topics.

 

Corporate Governance System at Shin-Etsu Chemical

As of June 29, 2017

 

 

Outside Directors

For the purpose of the fulfilled advisory and supervisory functions of management from an independent position, the Company welcomes four Outside Directors. Advice has been obtained from Outside Directors about the enhancement of growth strategy and governance. We believe that these points are extremely important in order to raise corporate value.

 

Outside Director List
Name Status of significant other positions held
Frank Peter Popoff Former CEO, The Dow Chemical Company (US)
Tsuyoshi Miyazaki Former Representative Director and President,
Former Representative Director and Chairman and current Advisor,
Mitsubishi Logistics Corporation
Toshihiko Fukui Former Governor of the Bank of Japan
President, The Canon Institute for Global Studies
Outside Director, Kikkoman Corporation
Hiroshi Komiyama Former President, The University of Tokyo
Chairman, Mitsubishi Research Institute, Inc.

As of June 29, 2017


From the left, Toshihiko Fukui, Hiroshi Komiyama, Frank Peter Popoff, Tsuyoshi Miyazaki

 

Outside Audit & Supervisory Board Members

For the purpose of the fulfilled advisory and supervisory functions on management through an independent position, the Company welcomes three Outside Audit & Supervisory Board Members. Outside Audit & Supervisory Board Members are auditing the Company’s management as experts in their respective fields or from a broad point of view based on corporate management experience. Outside Audit & Supervisory Board Auditing is contributing to ensure the Company’s compliance system.

 

Outside Audit & Supervisory Board Member List
Name Status of significant other positions held
Taku Fukui Lawyer Managing Partner, Kashiwagi Sogo Law Offices
Professor, Keio University Law School
Outside Director, YAMAHA CORPORATION
Yoshihito Kosaka Certified Public Accountant, Certified Public Tax Accountant
Counselor, Kisaragi Audit Corporation
Kiyoshi Nagano Former Representative Director, Chairman and President,
former JASDAQ Securities Exchange, Inc.
Outside Director, LEC INC.

As of June 29, 2017


From the left, Yoshihito Kosaka, Kiyoshi Nagano, Taku Fukui

 

Directors’ Remuneration

In order to ensure transparency and validity in the decision-making process of the Di rec tor s’ Remuneration, the Officers’ Remuneration Committee has been in place since 2002. The committee consists of five directors, with Outside Director Frank Peter Popoff as chairman. The committee comprehensively reviews the evaluation results of the contribution to business performance and management of each director in each fiscal year, and reports this to the Board of Directors.

 

Tax Policy

Our group companies conduct tax payments in compliance with each countries' local tax laws and regulations. Total corporate tax paid in FY2016 was 62.8 billion yen in consolidated basis.

 

Internal Control System and Operational Audit

The Company has formulated a Basic Policy on Internal Controls to help put in place “structures to ensure that the execution of duties by the directors is fully compliant with relevant legislation and the articles of incorporation, and structures to ensure the propriety of business operations within the corporate group consisting of its subsidiaries as well as this corporation and other corporate business”, as stipulated by the Companies Act and an Ordinance of the Ministry of Justice.

Internal controls are an important management responsibility at the Company. Accordingly, the internal control system is structured and implemented in accordance with the above policy. It is subjected to constant review to make the system more appropriate and efficient.

Internal operation audits and assessment of internal controls over financial reporting are handled by the Auditing Department. The results of these audits and assessments are reported to board members including Outside Directors and Outside Audit & Supervisory Board Members to strengthen coordination between Auditing Department and Outside Directors and Audit & Supervisory Board Members.

 

Operation of Group Companies

The Company aims for development of the whole Group by supporting and respecting the autonomy of the Group companies. Group companies are managed on the basis of the Shin-Etsu Chemical Group Company Operational Regulations. The 91 companies that are consolidated subsidiaries are conducting prior consultation and reporting on the following projects.

 

(1) Prior Consultation Item Example
  • Capital increase or decrease, mergers, dissolutions, amendments to the Articles of Incorporation
  • New business and capital investment plan
  • Transfer or acquisition of business
  • Appointment and dismissal or transfer of officers and seconded executives
(2) Reporting Item Example
  • Operations review
  • Financial results
  • Risk information recognized by Group companies
  • Important information such as deficiencies in internal control

Furthermore, by holding meetings which are attended by the presidents of our main Group companies twice each year, we actively promote the sharing and exchange of information among Group companies.

 

Internal System for Timely Disclosure of Corporate Information

In accordance with the regulations regarding information disclosure set by the stock exchange and the Financial Instruments and Exchange Act, the Company has formulated internal regulations regarding collection, management, and timely disclosure of corporate information. These regulations include the Regulations on Timely Disclosure of Corporate Information and the Rules on Regulation of Insider Trading. These rules are communicated to all of the departments in the Company and Group companies to promote smooth and timely disclosure.

 

State of the internal system for timely disclosure