Shin-Etsu Chemical Co., Ltd.

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TOP > CSR > 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 corporate 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 one or more times a monthly basis. 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. It is evaluated that the Board of Directors decides and reports important matters appropriately and swiftly based on the opinions collected from each of its members.
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

Corporate Governance System at Shin-Etsu Chemical

As of June 28, 2018

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

NameStatus of significant other positions held
Frank Peter PopoffFormer CEO, The Dow Chemical Company (US)
Tsuyoshi MiyazakiFormer Representative Director and President, Former Representative Director and Chairman and current Advisor, Mitsubishi Logistics Corporation
Toshihiko FukuiFormer Governor of the Bank of Japan
President, The Canon Institute for Global Studies
Outside Director, Kikkoman Corporation
Hiroshi KomiyamaFormer President, The University of Tokyo
Chairman, Mitsubishi Research Institute, Inc.

As of June 28, 2018

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

    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

NameStatus of significant other positions held
Taku FukuiLawyer Managing Partner, Kashiwagi Sogo Law Offices
Professor, Keio University Law School
Outside Director, YAMAHA CORPORATION
Yoshihito KosakaCertified Public Accountant
Certified Public Tax Accountant Counselor, Kisaragi Audit Corporation
Outside Director, Star Mica Co., Ltd.
Kiyoshi NaganoFormer Representative Director, Chairman and President, former
JASDAQ Securities Exchange, Inc.,
Outside Director, LEC INC.

As of June 28, 2018

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

    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. Mainly through its biannual regular meetings and telephone meetings called as required, 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.

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.

Tax Policy

In its corporate code, the Group states that it strictly complies with all laws and regulations and conducts fair business practices. Based on this code, each and every one of the Group's personnel is performing his/her daily work duties sincerely. One of the Group's management goals is to contribute to society by paying taxes appropriately in accordance with local laws and regulations. Our group companies conduct tax payments in compliance with each country's local tax laws and regulations. Total corporate tax paid in Fiscal 2017 was 74.7 billion yen in consolidated basis.

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 one or more times 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

State of the internal system for timely disclosure

Shin-Etsu Group Key CSR Issues

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