Corporate Governance
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 internal rules
- 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 21 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 basic principles of the Company 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 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 operation sites 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 activities, and other matters. In addition, they also provide advice and make requests on topics including these activities and the selection of key auditing topics.
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, 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 27, 2019
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. They are auditing the Company's management as experts in their respective fields or from a broad point of view based on corporate management experience. Audits by the outside Audit & Supervisory Board Members are 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; Outside Director, Star Mica Co., Ltd. |
| Kiyoshi Nagano | Former Representative Director, Chairman and President, former JASDAQ Securities Exchange, Inc.; Outside Director, LEC INC. |
As of June 27, 2019
From the left, Yoshihito Kosaka, Kiyoshi Nagano, Taku Fukui
Officers' Remuneration Committee
The Officers' Remuneration Committee has been in place to ensure transparency and validity in the process of determining Directors' remuneration, nominating candidates for Executives, Directors, and Audit & Supervisory Board Members, and other processes. 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 Business Principle, the Group states that it strictly complies with all laws and regulations and conducts fair business practices. Based on this, each and every one of the Group's personnel is performing his/her daily work duties sincerely. We believe that one of the Group's contributions to society is to pay the appropriate amount of taxes in accordance with local laws and regulations.Total corporate tax paid in Fiscal 2018 was 121.5 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 95 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.
Shin-Etsu Group Key CSR Issues
