Basic Views

We recognize our responsibility to society and offer beneficial products and services while maintaining the highest standards of integrity. Through our growth, we will contribute to society and enrich the lives of our employees.

Based on this philosophy, we created the NAGASE Vision, which is a promise to our stakeholders that each of us will embody our value proposition to Identify, Develop and Expand to realize a safe, secure, and humane world where people live with peace of mind, engaging in measures to improve corporate value over the medium and long term.

We believe that rapid decision-making, execution, and transparency are essential for us to accomplish these initiatives as we engage in strengthening our corporate governance.

Board of Directors & Executive Officers

Board of Directors & Executive Officers

Corporate Govenance System

Board of Directors The Board of Directors is clearly positioned as the body in charge of making decisions on management policies and strategies, and it supervises the execution of operations. Holding a regular monthly meeting, the Board of Directors makes important decisions, tracks business performance and formulates measures.
Audit & Supervisory Board / Audit & Supervisory Board Members In accordance with audit policy and audit plans set at Audit & Supervisory Board meetings, Audit & Supervisory Board Members attend important meetings, such as Board of Directors meetings, and conduct audits of the execution of duties of directors based on reports solicited from subsidiaries on an as-needed basis.
Group Management Committee The Group Management Committee comprises executive officers appointed by the Board of Directors, and in principle, this meets regularly twice a month to discuss management strategies, investment projects, and other important matters, and to support management decision-making. This serves as an advisory body that discusses matters resolved by the Board of Directors.
Nomination Committee The Nomination Committee, which consists of five individuals (a majority of outside directors), deliberates candidates for director and executive officer, as well as succession plans, reporting to and advising the board of directors. The role of this committee is to improve objectivity and transparency in the Company’s nominations of senior managers.
Compensation Committee The Compensation Committee, which consists of four individuals (a majority of outside directors), deliberates the validity of compensation standards and systems, reporting to and advising the board of directors. The role of this committee is to improve objectivity and transparency in the director compensation decision-making process.
Risk Management & Compliance Committee The Risk Management & Compliance Committee serves as an advisory body to the board of directors to strengthen mechanisms not only for legal compliance, but also for risk management and compliance, including risks associated with corporate ethics.
Sustainability Committee The Sustainability Committee is chaired by the President and comprises executive officers and senior management of Group companies. This formulates policies for promoting sustainability throughout the Group, establishes and maintains the promotion system, monitors measures and policies, and conducts educational activities within the Group.
Internal Control Committee The Internal Control Committee deliberates basic policy for internal controls and monitors the structure and operation of mechanisms determined under the internal controls system to ensure the appropriateness of business operations.
Security Trade Control Committee The Security Trade Control Committee ensures compliance with laws and regulations related to transactions and goods and technologies addressed by export-related regulations, including the Foreign Exchange and Foreign Trade Act.

As described above, the current corporate governance system, functioning in cooperation between outside directors, the Audit & Supervisory Board, and various committees with the aim of strengthening the Group's corporate governance function, acts in a supervisory and audit function from multifaceted perspectives, including from outside the company. At present, we have determined that this is the most reasonable system to realize this.

Internal Controls

The NAGASE Group established an internal control system to build a stable and sustainable corporate foundation for the Group with the aim of enhancing corporate value through corporate activities. In line with the Management Philosophy of maintaining highest integrity, the internal controls of the NAGASE Group monitor the construction and operation of frameworks defined under the internal control system and ensures the propriety of operations.

Status of Internal Controls Systems

a) Systems to ensure that Directors and employees execute their duties in accordance with laws and regulations and the Articles of Incorporation

b) Systems for retaining and managing information relating to the execution of duties by Directors

c) Rules relating to management of loss-related risks and other systems

d) Systems for ensuring the efficient execution of duties by Directors

e) Systems for ensuring the proper implementation of business by the corporate group comprising a stock corporation and its subsidiaries

f) Matters pertaining to employees when Audit & Supervisory Board members request the appointment of employees to assist them in the execution of their duties

g) Matters pertaining to ensuring the independence of employees specified in the preceding paragraph from Directors and ensuring the effectiveness of instructions from Audit & Supervisory Board members

h) Systems for Directors and employees to report to Audit & Supervisory Board members and other systems for reporting to Audit & Supervisory Board members

i) Other systems to ensure that audits are conducted effectively by Audit & Supervisory Board members

Details

Corporate Governance Report (pdf:551 KB)

Compemsation

NAGASE CO., LTD. has established a policy for determining overall board member compensation and methods for calculating the actual amounts through consultation at the Compensation Committee, a majority of whom are outside directors, and deliberation at the Board of Directors. Our basic policy is to ensure that compensation is appropriate for the role and scope of responsibilities for each board member and motivates them to sustainably enhance corporate value in light of objective external data and Company earnings for the period in question, etc., and that a fixed basic salary for each position and performance incentives shall be 50-70% and 30-50%, respectively. Compensation for outside directors and auditors is limited to the basic compensation, a fixed basic salary, in view of their duties.

Our basic policy for a fixed basic salary is that annual compensation will be paid equally each month, and variable compensation will be paid in a lump sum at the end of June.

As for the indicator for the Company’s performance incentives, we selects profit attributable to owners of the parent, which is the ultimate profit, as an incentive to improve business performance. The calculation method for performance incentives involves determining the base amounts of performance incentives, multiplying the ratio of profit attributable to owners of the parent to the actual amount of the previous fiscal year and the achievement ratio to the consolidated earnings forecast at the beginning of the fiscal year, and adjusting them based on the individual evaluations. Profit attributable to owners of the parent for this fiscal year is 18.8 billion yen. Starting in fiscal 2021, ROE will be added to the index as an incentive to improve capital efficiency, in addition to the profit attributable to owners of the parent. The compensation based on ROE is calculated based on the degree of achievement of the final target set for each fiscal year.

The compensation for individual directors is entrusted to Kenji Asakura, Representative Director and President, by the Board of Directors, based on deliberations on the appropriateness of compensation systems, standards, etc. at the Compensation Committee. The content of the authority delegated to the Representative Director and President is the individual evaluations of performance incentives (bonuses) linked to the performance of each director's business, etc. The reason for delegating this authority is that the Representative Director and President is considered to be the most appropriate person to evaluate the relevant business while overviewing the overall performance of the Company. The Board of Directors has consulted with the Compensation Committee on the original proposal and received a report from the Committee to ensure that the Representative Director and President appropriately exercises this authority, and has determined that it is in accordance with the decision policy. The individual compensation of auditors is determined through discussions among auditors.

The General Meeting of Shareholders held on June 22, 2020 approved the maximum amount of compensation for directors of 450 million yen per year (annual amount of less than 40 million yen for outside directors) (excluding salaries of directors who concurrently serve as employees). The number of directors at the conclusion of this General Meeting of Shareholders is eight (three of them are outside directors).

The General Meeting of Shareholders held on June 21, 2019 approved the maximum amount of compensation for auditors of 100 million yen per year. The number of auditors at the conclusion of this General Meeting of Shareholders is four.

Breakdown of Compensation and Total Amounts(Fiscal year ending March 2021)

Title Number of Eligible Directors Total Compensation
(Millions of yen)
Total Compensation by Type (Millions of yen)
Basic Salary Performance Incentives (Bonuses) Non-monetary compensation, etc. of Amounts Shown on the Left
Board of Directors Internal Directors 5 286 192 93 -
Outside Directors 4 28 28 - -
Total 9 314 220 93 -
Audit & Supervisory Board Members Internal Directors 2 46 46 - -
Outside Directors 2 33 33 - -
Total 4 79 79 - -

Important Matters regarding Employee Bonuses for Employees Also Serving as Directors(Fiscal year ending March 2021)

Total Compensation
(Millions of yen)
Number of Eligible Directors Comments
12 1 Paid in an amount equivalent to employee bonus.

Compensation by Type

Compensation Type Compensation Content Fixed / Variable Payment Method
Basic salary ・ A fixed salary is paid commensurate with each director’s position Fixed Cash
Performance incentives (bonuses) ・ A basic payment amount is decided in line with performance for the period.
・ Incentives reflect individual evaluations based on the Goal Management System.
Variable (by fiscal year) Cash

Audit System

Status of Audit by Audit & Supervisory Board Members

The Audit & Supervisory Board of the Company consists of three full-time corporate auditors (of which one is an outside auditor) and one part-time corporate auditor (outside auditor). A total of four corporate auditors, including corporate auditors who have considerable knowledge of finance and accounting, perform corporate audits.

To ensure the effectiveness of audits by auditors, the Company has appointed one Audit & Supervisory Board staff from the Audit Office, which is the internal audit division, who has considerable knowledge of finance, accounting and internal audits.

In principle, the Audit & Supervisory Board holds a meeting once a month on a regular basis and whenever necessary. It has met 17 times in total this fiscal year. The average number of hours required for a meeting of the Audit & Supervisory Board is 1.5, and the attendance rate of each auditor is 100%.

At the Audit & Supervisory Board meetings, each auditor reports on audit activities and audit results, etc., and exchanges opinions on various aspects of auditing and communication of opinions.

After the end of the fiscal year, the Board reviews the annual audit activities for its audit policy and audit plan and makes efforts to improve the effectiveness of audits by auditors, reflecting the results in the audit plan for the following fiscal year and subsequent years.

Status of Audit by Internal Auditors

The Company has an Audit Office as an internal audit department, from which 11 employees, including certified internal auditors (CIA), qualified internal auditors (QIA) and persons with expertise in internal auditing, conduct audits on the appropriateness and efficiency of business activities of companies, including subsidiaries, in accordance with the Internal Audit Rules.

Furthermore, in response to the Company's internal control reporting system for financial reporting, the Audit Office evaluates internal controls as an independent internal auditor and reports on the status of implementation of internal controls to the directors, the Audit & Supervisory Board and the accounting auditor as appropriate.

Status of Audit by Independent Auditor

Independent audits are performed in a fair and impartial manner by the following specified limited liability partners.

Certified Public Accountants Auditing Firm
Specified limited liability partners
Managing partners
Yasuhiro Takada Ernst & Young ShinNihon LLC
Takafumi Mitsuki

Neither of the certified public accountants, who have executed the aforementioned duties, have performed audits continuously for more than seven years.

Outside Officers

Through participation in the Board of Directors, outside directors receive reports on the implementation plans of audits by the auditors, the results of audits by the auditors and the accounting auditor, the evaluation results of the Company relating to the internal control in accordance with the Financial Commodity Exchange Act, and the status of the development and operation of the internal control system, etc. in accordance with the Companies Act.

Outside auditors exchange information on internal audits and audits of domestic and overseas affiliates at the Audit & Supervisory Board, and receive reports on audit results from corporate auditors and exchange opinions. In addition, the outside auditors receive a direct explanation of an audit plan and results from the accounting auditor, exchange opinions on risk recognition, and receive reports on the status of the accounting auditor's execution of duties from the full-time auditors.

In addition, outside directors and the Audit & Supervisory Board members exchange opinions through regular meetings.

Outside Director

Name Reasons of Appointment
Mr. Nobumasa Kemori
Assumed office in June 2016

< Attendance at Board of Directors meetings in fiscal 2020 >
16/17 (94%)
Mr. Kemori has long been involved in the management of Sumitomo Metal Mining Co., Ltd. and has a deep insight and abundant experience in corporate management. We expect Mr. Kemori to enhance the Company’s corporate governance through his knowledge and experience, offering proposals concerning the Company’s overall management from a perspective of familiarity with the industry. Accordingly, we have appointed Mr. Kemori as an outside director.
Mr. Takahiko Ijichi
Assumed office in June 2020

< Attendance at Board of Directors meetings in fiscal 2020 >
13/13 (100%)
Mr. Ijichi has been involved in management of Toyota Motor Corporation for many years and possesses advanced knowledge and extensive experience regarding corporate management. We expect Mr. Ijichi to use this knowledge and experience to make proposals concerning the Company's overall management, including that of production activities underway both within Japan and overseas, and to strengthen the Company's corporate governance. Accordingly, we have appointed Mr. Ijichi as an outside director.
Ms. Ritsuko Nonomiya
Assumed office in June 2020

< Attendance at Board of Directors meetings in fiscal 2020 >
13/13 (100%)
Having experience in accounting and similar areas at the KPMG Group, and in M&A and business development at the UBS Group and the GE Group, Ms. Nonomiya has high levels of financial and accounting knowledge, together with ample insight into and experience in corporate management. We expect Ms. Nonomiya to use this knowledge and experience to make proposals concerning the Company's overall management, and to strengthen the Company's corporate governance. Accordingly, we have appointed Ms. Nonomiya as an outside director.

Details (Outside Directors’ Relationship with the Company)

Corporate Governance Report (pdf:551 KB)

Outside Auditors

Name Reasons of Appointment
Mr. Nobuyuki Shirafuji
Assumed office in June 2016

< Attendance in fiscal 2020 >
Board of Directors: 17/17 meetings (100%)
Audit & Supervisory Board: 17/17 meetings (100%)
He has extensive insight based on his many years of overseas experience in financial institutions. In addition, he has been engaged in the credit screening and auditing divisions for many years and has considerable knowledge of finance and accounting. Therefore, we have determined that he is qualified to appropriately perform his duties as an outside auditor and have appointed him accordingly.
Mr. Gan Matsui
Assumed office in June 2018

< Attendance in fiscal 2020 >
Board of Directors: 16/17 meetings (94%)
Audit & Supervisory Board: 17/17 meetings (100%)
Although he has no experience of being directly involved in management, we have determined that he will be able to appropriately perform his duties as an outside auditor based on his abundant experience and deep insight in the legal profession and have appointed him as an outside auditor.

Details (Outside Directors’ Relationship with the Company)

Corporate Governance Report (pdf:551 KB)

Board of Directors Effectiveness Evaluation

[Board of Directors Effectiveness Evaluation]

The Company analyzes and evaluates the effectiveness of the Board of Directors on an ongoing basis, believing in the importance of improving the Board’s effectiveness.
Accordingly, we conducted a questionnaire targeting all directors and members of the Audit & Supervisory Board to analyze and evaluate the effectiveness of the Board of Directors.

[Summary of Effectiveness Evaluation Results]

As a result, the Company confirmed that our Board of Directors conducts appropriate and timely deliberations and decision-making, functioning effectively.
Furthermore, in response to the requirement to further expand deliberations on medium- to long-term management policies, company-wide strategies and important matters identified in the evaluation from the previous year's Board of Directors' meeting, we carried out a review of resolutions of the Board of Directors and made improvements.
At the same time, from the perspective of further improvement of effectiveness, we confirmed the issues that need to be addressed in order to optimize the provision of information in the preliminary examination to make the deliberations more effective, to expand feedback and follow-up, and to ensure diversity in the composition of the Board of Directors over the medium and long term.
The Company intends to continue with initiatives for improving the effectiveness of the Board of Directors.

Policies Related to Information Disclosure

Pursuant to the NAGASE Group Compliance Behavior Standards, we engage in ongoing communications with society and our stakeholders through timely disclosure of truly important information over appropriate channels. We are mindful that all corporate activities remain within the bounds of socially accepted norms.

This basic philosophy guides us as we conduct timely, appropriate, and fair disclosure of information through investor relations activities, public relations programs, and websites for our shareholders and investors to improve management transparency and accountability.

Timely Disclosure System

The Company has established Basic Compliance Policy. In pursuit of compliance with laws, regulations, and internal regulations/rules and public disclosure to stakeholders (interested parties), the company actively and fairly discloses corporate information striving to ensure transparency.

Under this basic approach, the company has created the following structure for identifying and managing information subject to timely disclosure which functions as an internal system for providing me timely and appropriate disclosure of company information to investors.

■ Information Related to Material Facts

The relevant headquarters general managers and division managers report information collected from departments and subsidiaries to the individual designated to handle such information. The individual designated to handle information coordinates with the relevant internal departments, summarizes information, and submits a report to the representative director and president.As necessary, a report is submitted to the board of directors, after which the Corporate Planning Department (body responsible for timely disclosures) promptly issues a timely disclosure.

■ Information Related to Decision-Supporting Facts

Each department or subsidiary circulates a proposal draft, based on which the Corporate Planning Department and related departments hold consultations. After a decision by the president, the board of directors makes a final approval, after which the Corporate Planning Department promptly issues a timely disclosure.

■ Financial Information

The Accounting, Finance, and Corporate Planning Departments receive financial information from each consolidated subsidiary, accepting advice and guidance from members of the Audit & Supervisory Board and outside experts as necessary to ensure the reliability of financial information received. These divisions then prepare financial reports and drafts of public announcements. After decision by the president, the board of directors makes a final approval, after which the Corporate Planning Department promptly issues a timely disclosure.

Information Dissemination and Communication to Shareholders and Investors

Communication with Analysts and Institutional Investors

By providing briefings on medium-term management plans and financial results, we offer forums where analysts and institutional investors can directly interact with management. Briefing session materials are published both in Japanese and English. In addition, members of management, including the President, regularly visit institutional investors and engage in active dialogue.

Communication with Individual Investors and Shareholders

In order to help outside parties gain an understanding of the NAGASE Group, we have set up a subsection of the investor relations section of our website, called “Individual Investors.” In addition, we hold briefings for individual investors to provide an easy-to-understand introduction of our global business activities, as well as NAGASE Group management strategies and performance reports.