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Corporate Governance / Corporate Activities Deserving Stakeholder Trust

Board of Directors

Board of Directors

Evaluation of the Effectiveness of the Board of Directors
(1) Method of Evaluation

As it did in the previous fiscal year, the Company analyzed and evaluated the effectiveness of the Board of Directors by having individual directors and Audit & Supervisory Board members complete the “Self Evaluation Questionnaire,” which covers items related to the effectiveness of the Board of Directors, such as scale, composition, operation and 20 other items, and discussing the questionnaire results at Board of Directors meetings.

(2) Summary of Evaluation Results and Future Efforts

The Company confirmed that discussion at the Board of Directors was invigorated thanks to appropriate Board size and composition (in terms of getting the right balance of expertise, experience, competency and diversity) and that meetings were of an appropriate frequency and duration, as well as the provision of prior explanation of agenda items and other initiatives aimed at helping outside directors and outside members of the Audit & Supervisory Board better understand Denka’s operations and make proactive contributions at the Board of Directors meetings.

Evaluation of the Effectiveness of the Board of Directors

Concepts on the Appointment of Directors

With the aim of practicing The Denka Value, our corporate philosophy, we are promoting the Denka Value-Up management plan, to this end strengthening our management structure supported by directors and executive officers while upgrading our governance systems and supervisory functions.
Director candidates are nominated from among individuals who have abundant experience and a strong track record in Denka’s business divisions and are equipped with sufficient knowledge and specialist expertise for the position. Outside director candidates are nominated from among those who boast extensive knowledge backed by abundant business experience as well as distinctive strengths in their area of specialty so that they can bring their insights on how to achieve sustainable growth and enhance corporate value. With regard to the overall composition of board members, we focus on maintaining a diverse and well-balanced composition in terms of expertise, experience, competency, gender and nationality. We also aim to maintain a sufficient number of independent outside directors to ensure that they account for at least one third of director membership. Currently, the Company’s Board of Directors achieves this targeted composition.

Policies on Director Remuneration

We have set remuneration for each director based on their roles and responsibilities within the limit of the total amount approved by the General Meeting of Shareholders. The representative directors draft the remuneration plan and the Board of Directors decides on the content of remuneration after receiving advice and recommendations from the Nomination and Remuneration Advisory Committee.
Remuneration for directors consists of monthly basic compensation set at a fixed amount (paid to all directors) as well as performance-based compensation and share-based compensation (neither of which are paid to outside directors or in-house directors with concurrent membership in the Audit Committee).
The value of the performance-based compensation is determined in step with consolidated operating income for each fiscal year. However, this portion may be decreased or fully withheld in cases where consolidated operating income did not reach a certain amount or the Company was found to be involved in compliance violations and other significant misconduct.
Share-based compensation is intended to ensure that directors share shareholders’ interests and risks regarding stock price fluctuations. By doing so, we aim to instill a strong sense of purposefulness toward achieving medium- to long-term growth in corporate performance and corporate value in our directors.
In addition, remuneration paid to directors with concurrent membership in the Audit Committee consists only of monthly basic compensation with fixed amount. Total remuneration paid to such directors is determined within the upper limit approved by the General Meeting of Shareholders.

Director Remuneration Paid in Fiscal 2018 ¥377 million in total

Director Remuneration Paid in Fiscal 2018

Transition to a Company with an Audit Committee

Acutely aware of the importance of securing solid corporate governance, Denka has introduced an executive officer system aimed at ensuring functional separation between personnel charged with supervision and decision making and those charged with business execution. Moreover, Denka appointed three outside directors and two outside members of the Audit & Supervisory Board. As such, Denka has strengthened functions of the Board of Directors and the Audit & Supervisory Board in terms of supervision and auditing, respectively, with the aim of establishing a robust foundation for fair and transparent business management.
In June 2019, Denka’s decision to transition to a Company with an Audit Committee was approved at the 160th Ordinary General Meeting of Shareholders. This transition entails appointing individuals who serve as Audit Committee members and are allowed to cast a vote at Board of Directors meetings in addition to being expected to help enhance the latter’s supervisory functions and secure an even more solid management structure.

Purposes of Transition to a Company with an Audit Committee
  • ■Step up separation between supervisory and execution functions
    Improve the transparency and fairness of management while realizing speedier and dynamic decision making
  • ■Increase the number of outside directors
    The number of outside directors grew from three to five, one of whom is female
  • ■Promote diversity
    Ensure that the composition of Board members is diverse and well-balanced in terms of their expertise, experience, competency, gender and nationality

Increase the number of outside directors

Transition to a Company with an Audit Committee

デンカ株式会社, デンカ株式会社 IR室
Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Strengthening corporate governance
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Strengthening corporate governance

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Corporate Governance / Corporate Activities Deserving Stakeholder Trust
BCP
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BCP (business continuity plan)

Our basic BCP policies are as follows: Even in the event of a crisi...

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Internal Control System
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Internal Control System

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Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Board of Directors
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Board of Directors

Evaluation of the Effectiveness of the Board of Directors (1) Method o...

Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Directors
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Directors

Shinsuke Yoshitaka Chairman(Born February 1,...

Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Outside Directoers
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A Message from an Outside Director

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Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Outside Directoers
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Independence standards for Outside Directors

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Compliance
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Compliance

Compliance is essential for sustainable growth. We accordingly adhere to ...

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Risk Management
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Risk Management

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Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Compliance Hotline System
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Compliance Hotline System

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Corporate Governance / Corporate Activities Deserving Stakeholder Trust
System to Review Contractual Legal Matters
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System to Review Contractual Legal Matters

In order for Denka Group to conduct fair and equitable transactions with ...

Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Our Stance against Corruption and Money Laundering
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Our Stance against Corruption and Money Laundering

The Denka Group Ethics Policy prohibits employees from engaging in briber...

Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Security Export Control
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Security Export Control

Regarding security export control that prohibits the export of products a...

Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Prevention of Insider Trading
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Prevention of Insider Trading

In recent years, information leaks and insider trading by company personn...

Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Information Protection and Management
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Information Protection and Management

(1) Information Protection and Management The compliance of informatio...

Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Information Protection and Management
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Online Information Management

We ensure management transparency by disclosing corporate information in a ...

Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Protection of Intellectual Property Rights
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Protection of Intellectual Property Rights

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