The Company considers Corporate Governance to be one of the important management tasks, and is focusing on the following points.
- ・Development of an efficient organization and internal rules
- ・Ensuring management transparency
- ・Strengthening internal controls
- ・Timely and accurate disclosure of information
Corporate Governance System
The Board of Directors consists of 21 members, of whom 5 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.
In addition, we hear individual opinions from outside directors on the overall effectiveness of the Board of Directors on an annual basis, and the outside directors gave us an evaluation that the effectiveness of our Board of Directors is being ensured. We were able to obtain valuable opinions on sustainable development, such as "future-oriented research and development" and "utilization of human resources." As stated above, the Board of Directors is functioning properly. In addition, the results of the self-evaluation and analysis of the Board of Directors ensure the effectiveness of the Board as a whole, and the Board of Directors fulfills its functions sufficiently.
The Company has adopted an Audit & Supervisory Board system. The Audit & Supervisory Board is composed of 5 members, including 3 Outside Audit & Supervisory Board Members. The Audit & Supervisory Board members attend the Board of Directors Meetings, Managing Directors' Meetings, and other important internal meetings. In addition, they audit the business execution of the directors through visiting the operation sites and reviewing the reports submitted by the directors and employees on the status of execution of duties. The Audit & Supervisory Board Members also receives reports and explanations on financial audits from the accounting auditors and exchanges opinions with them on a quarterly basis. Furthermore, they regularly receive reports and explanations regarding the status of internal audits from the Auditing Department and exchange opinions.
Corporate Governance System at Shin-Etsu Chemical
As of June 26, 2020
For the purpose of the fulfilled advisory and supervisory functions of management from an independent position, the Company welcomes 5 Outside Directors. We have received advice on strategy for growth or enhancement of governance from Outside Directors. We believe that these points are extremely important in order to raise corporate value.
Outside Director List
As of June 26, 2020
Frank Peter Popoff Name Status of significant other positions heldFormer CEO, The Dow Chemical Company (US)
Tsuyoshi Miyazaki Name Status of significant other positions heldFormer Representative Director and President, Former Representative Director and Chairman and current Advisor, Mitsubishi Logistics Corporation
Toshihiko Fukui Name Status of significant other positions heldFormer Governor, the Bank of Japan; President, The Canon Institute for Global Studies; Outside Director, Kikkoman Corporation
Hiroshi Komiyama Name Status of significant other positions heldFormer President, The University of Tokyo; Chairman, Mitsubishi Research Institute, Inc.
Kuniharu Nakamura Name Status of significant other positions heldRepresentative Director and Chairman, Sumitomo Corporation; Outside Director, NEC Corporation
Outside Audit & Supervisory Board Members
For the purpose of the fulfilled advisory and supervisory functions on management through an independent position, the Company appoints 3 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
As of June 26, 2020
Taku Fukui Name Status of significant other positions heldLawyer Managing Partner, Kashiwagi Sogo Law Offices; Professor, Keio University Law School; Outside Director, YAMAHA CORPORATION
Yoshihito KosakaName Status of significant other positions heldCertified Public Accountant; Certified Public Tax Accountant; Outside Director, Star Mica Holdings Co., Ltd.
Kiyoshi NaganoName Status of significant other positions heldFormer Representative Director, Chairman and President, former JASDAQ Securities Exchange, Inc.; Outside Director, LEC INC.
Officers' Remuneration Committee
The Company has organized the Officers' Remuneration Committee since 2002
to review and evaluate
transparency and validity in
the process of determining Directors' remuneration, nominating candidates for Executives,
Directors, and Audit &
Supervisory Board Members, and others. The committee consists of 5 directors, with
Outside Director Frank Peter
Popoff as the Chairman.
The committee is convened by regular meetings biannually and conference calls as required. The Committee reviews and evaluates the remuneration of Directors, and deliberates on the nomination of candidates for Directors and Audit & Supervisory Board Members, and advises 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. Accordingly, the internal control system is structured and implemented
in accordance with the above
policy. We review them constantly and endeavor to make the system more appropriate and
Internal operation audits and assessment of internal controls over financial reporting are handled by the Auditing Department from the viewpoint of legality and rationality of business activities. 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.
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 income taxes paid in FY2019 was 107.8billion 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 97 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
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.