Corporate Governance
View our report on corporate governance submitted to the Tokyo Stock Exchange.
→ View reports related to our corporate governance (last updated July 16, 2025) (in Japanese)
Basic Approach
Within the Nichiden Group, our basic approach to corporate governance is to facilitate swift managerial decision-making in response to changes in the business environment while also establishing corporate ethics, ensuring legal and regulatory compliance, and strengthening internal control systems for greater business efficiency. In terms of business transparency, we believe that timely disclosure of information to stakeholders is an important aspect of safe and sound management, and we strive to ensure our communications reflect that.
Overview of Our Corporate Governance Structure
At Nichiden, we have in place an Audit and Supervisory Committee to enhance corporate governance through stronger Board of Directors oversight, as well as to facilitate faster decision-making and execution of business by ensuring clear delegation of authority, thereby improving business integrity and efficiency and, in turn, greater corporate value. As a rule, Nichiden’s Board of Directors meets once a month to deliberate, vote, and report upon various matters as well as to provide oversight and make recommendations about the execution of business. Based on the policies adopted by the Board of Directors, regular and extraordinary meetings of the Management Committee and block committees are convened to help ensure that Nichiden is able to flexibly respond to changes in the business environment.
We have also created a Nomination and Remuneration Committee to serve as an advisory body to the Board of Directors.
Corporate Governance Framework
Within the Nichiden Group, we maintain a governance structure that is equipped with the means to identify and evaluate the various risks capable of significantly impacting business objective-related management. This enables us to prevent these risks from materializing or, if they do, to minimize the loss incurred. With regard to accounting, Nichiden has an auditing agreement with Ernst & Young ShinNihon LLC, from whom we receive regular audits. We are continually working to ensure that we have proper accounting processes, internal control systems, and other robust mechanisms in place. In terms of legal considerations, we maintain consulting agreements with a law office that helps us in addressing legal issues in a timely and lawful manner.
Board of Directors
The Board of Directors, which as a rule meets once a month, oversees decision-making on important matters and the execution of the company’s operations. The body consists of nine directors, including three outside directors, to ensure it can exercise its oversight function effectively. It strives to respond in a dynamic manner to changes in the business environment through both regular monthly meetings and regular and extraordinary meetings of block committees and other groups.
Number of meetings in fiscal 2024: 10 Chair: Representative Director and President Executive Officer Term of office of directors: 1 year
Outside Directors
There is no conflict of interest between Nichiden and any of the outside directors or the other positions that they hold. Although we do not adhere to any preset independence-related criteria or policies with regard to the selection of outside directors, we ensure that everyone who is appointed brings with them specialized expertise, has a wealth of experience and insight to share, and is able to be sufficiently objective and neutral when supervising or auditing Nichiden’s business. The outside directors serve on the Audit and Supervisory Committee, where they receive internal audit and accounting audit reports and engage in opinion and information exchange as appropriate. The outside directors also coordinate with the internal control oversight department (Corporate Planning Department) in auditing the effectiveness of Nichiden’s internal control systems.
Audit and Supervisory Committee
The Audit and Supervisory Committee uses a variety of resources, including reports from accounting auditors and executive officers, to perform strict auditing of the legality and validity of executive officer job performance. In addition, as a rule and in line with the Committee’s auditing policies and auditing plan, the Audit and Supervisory Committee meets once a month to engage in opinion and information exchange with accounting auditors and members of the Audit Office with regard to their ongoing on-site audits of organizational management system and operational procedure suitability and internal control propriety, endeavoring to improve auditing effectiveness and efficiency.
Number of meetings in fiscal 2024: 11 Composition: 4 Audit and Supervisory Committee members (including 3 outside directors)
Committee chair: Internal director
Nomination and Remuneration Committee
The Nomination and Remuneration Committee develops structures to ensure fairness in the appointment, dismissal, and compensation of directors (excluding Audit and Supervisory Committee members). By making recommendations to the Board of Directors concerning topics including the appointment of officers and the determination of officers’ compensation programs and levels, the body brings greater transparency and fairness to those processes.
Number of meetings in fiscal 2024: 5 Composition: Representative Director and President Executive Officer and 2 outside directors
Committee chair: Outside director
Management Committee
The Management Committee, which is made up of internal directors and executive officers and chaired by the president, deliberates on which resolutions will be considered by the Board of Directors and discusses associated specific measures and issues. Findings are reported to all officers via block committees and to outside directors so that specific issues and problems affecting the company’s operations can be addressed in a timely manner.
Number of meetings in fiscal 2024: 9
Sustainability Committee
The Sustainability Committee works to ensure the company operates in a sustainable manner by formulating a basic policy on sustainability, setting goals for resolving key issues (materiality), formulating action plans, managing and evaluating progress towards goals, and discussing individual policies. It also submits reports and recommendations to the Board of Directors and the Management Committee on a regular basis.
Number of meetings in fiscal 2024: 2
Compliance and Risk Management Committee
In order to ensure the effectiveness of our risk management, we have established a Compliance and Risk Management Committee, which is chaired by the president. It allows a comprehensive review of the company’s risk management-related policies and measures. In line with the risk management rules, the Committee has established risk-specific oversight departments, which regularly review Nichiden’s risk response measures. The Corporate Planning Department compiles those reviews and reports them to the Board of Directors. In the event of unforeseen contingencies, the Committee takes timely action in accordance with internal rules to minimize damage and prevent a recurrence.
Number of meetings in fiscal 2024: 2
Strengthening Corporate Governance
Evaluation of the effectiveness of the Board of Directors
We administer a questionnaire concerning the effectiveness of the Board of Directors to all directors once a year and solicit third-party views. The results of the questionnaire are analyzed and evaluated, reported to the Board, and discussed.
In the 74th term, as in the 73rd, the Board of Directors discussed the results of a questionnaire covering the composition and operation of the Board, management and business strategies, corporate ethics and risk management, performance monitoring and evaluation of management, and dialogue with shareholders and other stakeholders. Directors expressed views calling for greater diversity in the Board of Directors’ composition, expanded discussion of succession planning, enhanced dialogue with shareholders and other stakeholders, and earlier distribution of Board materials in advance of meetings. At the same time, it was acknowledged that the Board is being managed appropriately and that, beginning in the 75th term, the schedules of the Board of Directors meetings and Management Committee meetings will be separated to ensure sufficient time for thorough discussion. Based on these considerations, we have analyzed and evaluated that our Board of Directors is appropriately fulfilling its expected role and that its effectiveness is being sufficiently secured. We will continue our efforts to further enhance the effectiveness of the Board of Directors going forward.
Executive Appointment/Dismissal and Director/Auditor Nomination Policies
Candidates for director positions (excluding Audit and Supervisory Committee members) from both inside and outside the company who possess the following qualities and are capable of carrying out the duties of a manager are nominated by the Board of Directors based on their experience, knowledge, and performance following an advisory and reporting process involving the Nomination and Remuneration Committee.
Appointment Policy
- Candidates must have extensive job experience and exhibit deep specialization in a specific field.
- Candidates must have an excellent sense of management and be capable of contributing to the development of business strategies and policies on a companywide basis.
- Candidates must possess fundamental knowledge about management and administration.
- Candidates must exhibit character, judgment, and education befitting an officer of the company.
Dismissals of directors (excluding Audit and Supervisory Committee members) are handled as appropriate in light of Nichiden’s performance and the environment in which it operates. In the event a director fails to satisfy the conditions of appointment as described above, the Board of Directors will discuss dismissal and place it on the agenda of the General Shareholders Meeting following an advisory and reporting process involving the Nomination and Remuneration Committee. We have also put in place additional objective and transparent procedures by allowing the Audit and Supervisory Committee to effectively utilize its right to express its views on the appointment and dismissal of directors to the Board. Candidates for director positions (Audit and Supervisory Committee members) who are deemed capable of carrying out the duties and fulfilling the responsibilities of Audit and Supervisory Committee member and contributing to the establishment of fair management oversight structures after a careful consideration of their individual personalities, knowledge, and other qualities are nominated by the Board after the agreement of the Audit and Supervisory Committee has been obtained.
Skills Matrix of Directors
| Name | Gender | Rank and area of responsibility | Corporate management | Sales and marketing |
Finance and accounting | Talent management |
Compliance and risk management |
|
|---|---|---|---|---|---|---|---|---|
| Toshikazu Fuke | Male | Representative Director and President Executive Officer |
Nomination and Remuneration Committee member | ○ | ○ | ○ | ○ | |
| Kenichi Okamoto | Male | Representative Director and Senior Managing Executive Officer |
Head of sales | ○ | ○ | |||
| Atsushi Sangawa | Male | Director and Managing Executive Officer |
Administration Department general manager | ○ | ○ | ○ | ||
| Jyunji Morita | Male | Director and Managing Executive Officer |
Business Promotion Department general manager | ○ | ||||
| Hajime Sasaki | Male | Director and Senior Executive Officer |
West Block general manager | ○ | ||||
| Yasuo Higaki | Male | Director | Full-time Audit and Supervisory Committee member | ○ | ○ | |||
| Kiyokazu Furuta | Male | Outside Director | Audit and Supervisory Committee member Nomination and Remuneration Committee member |
○ | ||||
| Masaru Kawakami | Male | Outside Director | Audit and Supervisory Committee member Nomination and Remuneration Committee chair |
○ | ||||
| Yasuko Terashima | Female | Outside Director | Audit and Supervisory Committee member | ○ | ||||
Internal Control
The Nichiden Group recognizes that putting in place and administering structures to ensure proper operations (i.e., internal control systems) in keeping with its management philosophy are important responsibilities of management and critical preconditions for fulfilling its social responsibility and increasing its corporate value. Consequently, we have put in place an internal control system as described below in accordance with Japan’s Companies Act and the Companies Act Enforcement Ordinance. In addition, the Group will continue to develop and administer even more appropriate internal control systems in the future as its internal and external environments change.
Internal Audits
For the sake of mutual checks and balances to strengthen Nichiden’s internal control systems, the Audit Office (staffed by two personnel) has been established under the direct oversight of the president.
Internal audits are carried out in line with internal auditing rules and are used to check compliance with rules, manuals, and other requirements, as well as to check the accuracy of administrative processes, thereby helping to prevent corruption and promote more efficient and streamlined business operations. The Audit and Supervisory Committee fosters collaboration with accounting auditors by communicating with them about risk and audit items when formulating audit plans; receiving reports on the status of audits, for example, at audit report sessions held during audits and reviews at the end of each accounting period; and exchanging views on and studying important accounting-related topics.
Cross-Shareholding
Each year, the Board of Directors examines whether the benefits and risks associated with cross-shareholding are appropriate in light of associated capital costs after taking into account the nature of each company’s dealings with Nichiden and dividend yields and then determines whether to continue holding the shares in question. Our policy is to curtail holdings of shares if we determine that the benefits of the arrangement are not appropriate in light of capital costs following an examination of our relationship with the counterparty and other factors.
