Directors and Audit & Supervisory Board Members

Policy on Cross-Shareholdings

NGK holds shares of listed companies that contribute to the NGK Group’s long-term business development as cross-shareholdings, primarily in order to maintain and strengthen business relationships. In addition, NGK holds the shares of each company in the Morimura Group, which was established by the same founders of NGK, for the mutual benefit of enhancing management quality, as the Morimura Group brand forms a part of NGK’s corporate value through its philosophy and heritage. As all cross-shareholdings are a part of the asset portfolio, they are positioned as assets to supplement the amount of liquidity considered necessary in the business plan. NGK constantly strives to reduce the scale of cross-shareholdings from the perspective of capital efficiency. Furthermore, the scale of cross-shareholdings may fluctuate due to factors including changes in overall business trends and risks, financial conditions, and the status of NGK’s business relationship with each business partner. Regarding the specific stocks held, at its Board of Directors’ meeting, NGK regularly reviews the appropriateness of the continuous holding of shares as cross-shareholdings along with the capital policy, by determining the significance of holding from the business relationship, the safety of ratings and so forth, and the efficiency of dividend yields and so forth. On the other hand, when comparing cross-shareholdings to NGK’s cost of capital, evaluations based solely on shares are not conducted. Instead, ROIC management is conducted for each business with differing risks and expected returns, and cross-shareholdings are evaluated after being included in each business’s balance sheet. After verification, in fiscal 2019, four specified equity securities held for investment purposes were sold for a total of 4.353 billion yen.

Number of Stocks and Balance Sheet Amount

  Number of stocks Total balance sheet amount
(millions of yen)
Unlisted shares 38 2,026
Shares other than unlisted shares 41 31,138

Stocks for Which Number of Shares Increased in FY2019

  Number of stocks Share number increase total
acquisition amount (millions of yen)
Reason for share number increase
Unlisted shares
1 483 Shares were increased in order to facilitate the establishment and financing of a joint venture with four Morimura Group companies, thereby allowing for the incorporation of their solid oxide fuel cell technology and expertise, which will expedite product commercialization.
Shares other than unlisted shares - - -

Stocks for Which Number of Shares Decreased in FY2019

  Number of stocks Share number decrease total sale amount (millions of yen)
Unlisted shares 1 11
Shares other than unlisted shares 4 4,353

Management Succession Planning

In December 2018, the Board of Directors approved the NGK Group Chief Executive Officer Succession Plan, which establishes the required qualities, development policies, selection procedures, and other items for chief executive officer successors. Based on this, the President provides the Nomination and Compensation Advisory Committee with a planning progress report each year, and its appropriateness is reviewed.