- NYK's Corporate Governance Organization Chart (As of June 21, 2017)
- Structure of the Board of Directors and the Audit and Supervisory Board
- The Board of Directors and the Committee of Corporate Officers
- Nomination Advisory Committee and Compensation Advisory Committee
- Remuneration for Directors, Audit and Supervisory Board Members, and Corporate Officers
- Yearly Evaluation of the Effectiveness of Meetings of the Board of Directors
- Training for Directors, Audit and Supervisory Board Members, and Corporate Officers
- Policy for Holding Strategic Shareholdings
- Auditing System
- Accounting Audits by Independent Auditor
NYK's Corporate Governance Organization Chart (As of June 21, 2017)
Corporate Governance Guidelines
Structure of the Board of Directors and the Audit and Supervisory Board
NYK is a company with a Board of Directors and an Audit and Supervisory Board. The Board of Directors comprises 11 directors, including three highly independent outside directors, while the Audit and Supervisory Board comprises four audit and supervisory board members, including two highly independent outside audit and supervisory board members.
The Board of Directors and the Committee of Corporate Officers
The Board of Directors decides on legal matters, establishes important management policies and strategies, and oversees the execution of operations. In addition, the Committee of Corporate Officers comprises 29 members including directors but excluding outside directors. These members execute operations based on the resolutions and supervision of the Board of Directors, within the scope of authority delegated to them by the Board of Directors. Through that system, we endeavor to ensure prompt, appropriate decision-making; and increase business management transparency and efficiency.
In order to facilitate prompt decision-making at all times at meetings of the Board of Directors while ensuring the quality of such decision-making through active and substantive discussion, the Company believes that the appropriate size for the Board of Directors to be efficient is around 12 members, of which around three should be outside directors who meet the Independence Criteria. The Board of Directors shall comprise a sufficient number of internal directors who are well versed with the Group's globally operated businesses with shipping and logistics businesses at its core, as well as a certain number of independent outside directors with high expertise that can contribute to corporate management and further enhance the supervisory function of the Board of Directors.
Nomination Advisory Committee and Compensation Advisory Committee
In October 2016, the Nomination Advisory Committee and the Compensation Advisory Committee were established to enhance further the Company's corporate governance and ensure the transparency of the Board of Directors function. Both committees comprise the chairman, the president, and three independent outside directors.
The main purposes of the committees are as follows.
(Nomination Advisory Committee)
- Matters related to the appointment and dismissal of directors and corporate officers, etc.
- Matters related to independence criteria for independent outside directors and independent outside audit and supervisory board members
(Compensation Advisory Committee)
- Matters related to the policies and procedures for remuneration of directors and corporate officers
- Matters related to the content of compensation for directors and corporate officers
Remuneration for Directors, Audit and Supervisory Board Members, and Corporate Officers
In November 2015, the Company established "Policies and Procedures for Determining Compensation for Directors, Audit and Supervisory Board Members and Corporate Officers," and disclosed them in the "Business Report" and the "Report on Corporate Governance," etc. In June 2016, the Company introduced a performance-based stock remuneration plan for its directors, etc. This highly transparent and objective directors' remuneration plan is intended to encourage directors, etc., to contribute to the Company's sustainable growth and to have directors, etc., share benefits and losses with shareholders. In addition, a portion of the basic remuneration that had been paid in cash was reduced, and if the performance targets are achieved, basic remuneration and stock remuneration are paid to the president and the chairman in a ratio of about 5:5, and a ratio of about 6:4 in the case of executive directors. The plan is modeled after performance share and restricted stock systems in the U.S., and is an incentive plan for directors and corporate officers. Shares of the Company acquired by a trust established by the Company are granted to directors, etc., according to the degree of achievement of performance targets, etc.
Total Amount of Directors' Remuneration
- The amount of remuneration paid to directors includes the amount paid to three directors who retired during fiscal 2016.
- The amount of remuneration paid to audit and supervisory board members includes the amount paid to one audit and supervisory board member who retired during fiscal 2016.
- For the six consecutive terms since the 125th up to the current term, there have been no payments of bonus for directors.
- The stock remuneration amount is the provision for stock payment during this fiscal year based on the performance-based stock remuneration plan introduced by resolution at the General Meeting of Shareholders of the previous fiscal year.
Yearly Evaluation of the Effectiveness of Meetings of the Board of Directors
Since fiscal 2015, the company has had all directors and audit and supervisory board members participate in an annual non-anonymous, self-evaluation on the benefit of boards meetings during the previous fiscal year to further enhance their effectiveness. The aim is to strengthen governance by encouraging discussions about possible concerns and the proper direction of the board.
Based on the results of the previous fiscal year's survey, in fiscal 2016 we implemented concrete measures, such as organizing the matters to be reported, reviewing the standards for submitting proposals, and delegating authority to the Committee of Corporate Officers, in order to appropriately secure time for discussions at the meetings of the Board of Directors. In addition, we established the voluntary Nomination Advisory Committee and Compensation Advisory Committee as advisory committees of the president for the purpose of further enhancing the governance function of the Board of Directors. Furthermore, we strove to enhance the effectiveness of the meetings of the Board of Directors through initiatives such as holding meetings to provide outside directors and outside audit and supervisory board members with opportunities for preliminary explanations regarding important matters and a forum for providing information and exchanging opinions among directors and audit and supervisory board members, including outside directors and outside audit and supervisory board members.
The survey on fiscal 2016 indicated that the above measures, etc. have resulted in a general improvement of effectiveness. On the other hand, the survey also identified issues to address in the future, including the need for further explanation concerning the process of assessment and consideration of risks related to important matters to be decided. Accordingly, it was confirmed that efforts to enhance the supervisory function of the Board of Directors would continue, in order make meetings of the Board of Directors a forum for making decisions after further thorough discussion.
Training for Directors, Audit and Supervisory Board Members, and Corporate Officers
Upon the assumption of office by directors and audit and supervisory board members, including outside directors and outside audit and supervisory board members, the Company provides them with an opportunity for acquiring the necessary knowledge about the business, finance, organization, and other matters of the Company, and to properly understand the roles and responsibilities required for directors and audit and supervisory board members, including legal obligations.
In addition to the usual training for officers, in fiscal 2016 we began providing internal directors and outside directors, internal and outside members of the audit and supervisory board, and corporate officers with opportunities to take in-house training and outside courses on the Companies Act, internal control, compliance, crisis management, business analysis, financial strategy, and other matters. This is aimed at enabling them to deepen their knowledge needed for continuous improvement of corporate value, as well as their understanding of the latest trends. The Board of Directors reviews the progress of implementation of these measures.
Policy for Holding Strategic Shareholdings
The Board of Directors is given reports on the results of verification of the purpose and significance of strategic shareholding, in accordance with the Corporate Governance Guidelines. We have been engaged in verifying the purpose and significance of strategic shareholding since fiscal 2008. As of this time, the Company has sold more than 40% (acquisition price ratio) of the shares held for strategic purposes compared to fiscal 2008. Current strategic shareholding consists of the stock of important customers related to long-term contracts etc., which contribute to the stability of the Company's performance, and has been judged to be appropriate as a measure to maintain and strengthen relationships with those customers etc.
In addition, when exercising voting rights for strategic shareholdings, the Company decides to vote for or against proposals after confirming whether it will result in damage to the value of the relevant company, as well as whether it will contribute to improvement of the Company's corporate value, and the degree of such contribution.
Fifty percent or more of the members of the Audit and Supervisory Board is comprised of independent outside audit and supervisory board members, who are selected from among persons who have a high level of expertise conducive to audits. The Company endeavors to appoint one or more audit and supervisory board members who have appropriate knowledge on finance and accounting.
The Audit and Supervisory Board enhances the effectiveness of audits by improving the information-gathering ability of full-time audit and supervisory board members, integrating the independence of outside audit and supervisory board members, and sharing necessary information with independent outside directors.
All four audit and supervisory board members, including the two outside audit and supervisory board members, have the authority to audit the execution of duties by directors, elect or dismiss independent auditors (accounting auditors), and conduct matters related to independent auditor remuneration. Audit and supervisory board members undertake auditing activities in accordance with audit plans determined by the Audit and Supervisory Board. These activities include attending meetings of the Board of Directors and other important meetings, interviewing directors and members of the Committee of Corporate Officers, etc. regarding their execution of duties, and examining important approval documents, etc. Audit and supervisory board members monitor the independence, structure, quality, etc. of the independent auditor while maintaining an organic relationship, complementing audit-related activities through mutual information exchange, and working to raise audit quality and efficiency. Audit and supervisory board members also hold monthly meetings where the results of audits and other information are shared. They also meet with the Internal Audit Chamber on a regular basis and convene meetings with the independent auditor, thereby strengthening communication between all three audit-related groups. The Audit and Supervisory Board Office, consisting of three full-time staff members, supports audit and supervisory board members in the execution of their auditing duties.
The Internal Audit Chamber conducts internal audits of the Company and domestic group companies, all in accordance with internal auditing rules approved by the Board of Directors. Internal audits of overseas group companies are performed by internal auditors assigned to the group regional headquarters who act under the direction and guidance of the Internal Audit Chamber.
Accounting Audits by Independent Auditor
The certified public accountants who audit the Company's consolidated and non-consolidated financial statements are Toshiyuki Ono, Yuji Takei, and Tomoya Noda, all of whom are with the accounting firm Deloitte Touche Tohmatsu LLC and have been auditing the Company's accounts for less than seven consecutive years. These accountants are assisted by 19 certified public accountants and 26 others. Audits are undertaken in accordance with standards generally accepted as fair and appropriate.
Independent Auditor Remuneration