- Basic Policies
- Corporate Governance Structure Scheme
- Committees on Corporate Governance
- Outside Directors and Outside Audit & Supervisory Board Members
- Remuneration of Directors and Audit & Supervisory Board Members
- Whistleblowing System
- Internal Control Systems
- Evaluation on the Effectiveness of the Board of Directors
Committees on Corporate Governance
NGK has further strengthened and enhanced its corporate governance structures by establishing committees to bolster the supervision and monitoring functions of the Board of Directors.
Board of Directors
The Board of Directors deliberates matters prescribed in the Companies Act, as well as other important management issues, providing oversight for the execution of duties by directors. The Board of Directors includes three outside directors to create a system enabling management monitoring based on professional knowledge and decision-making from a wider perspective.
As of June 21, 2019 the current Board of Directors comprises 12 members (11 men and one woman).
Times held: 14
Audit & Supervisory Board
The Audit & Supervisory Board consists of four members, each of whom attends Board of Directors meetings and conducts other activities to audit the execution of duties by directors. The Audit & Supervisory Board includes two external members, each possessing significant business experience and extensive insight. The Audit & Supervisory Board members, including these highly independent outside members, conduct audits on the execution of duties by directors, business operations, and the company's financial position.
Times held: 14
Comprising the president, directors, Audit & Supervisory Board members, and executive officers and division heads designated by the president, this body deliberates the matters necessary to help the president with decision-making. As of June 21, 2019, the current Executive Committee comprises 16 members (15 men and one woman).
Times held: 21
Business Ethics Committee
Comprised of five outside directors and one internal director responsible for compliance, this committee monitors for fraud or illegalities involving senior management, as well as for compliance with the Competition Law and the Foreign Corrupt Practices Act, and reports directly to the Board of Directors. As a mechanism to prevent fraud or legal violations, in addition to the Helpline, an internal reporting system (Hotline) linked directly to outside lawyers was established with the aim of strengthening NGK's compliance structure.
Times held: 8
Nomination and Compensation Advisory Committee
Comprising five outside directors and three representative directors, this committee deliberates on matters related to the appointment of directors and Audit & Supervisory Board members, remuneration of directors, executive officers, and Audit & Supervisory Board members, and Chief Executive Officer succession planning. The results of these deliberations are reported to the Board of Directors in attempts to ensure fairness and increase transparency related to determining the appointment and remuneration of officers.
Times held: 5
The meeting enables outside directors to exchange opinions with representative directors and others when proactive recommendations for senior management are sought from outside directors regarding various management-related issues.
Times held: 2
Conference of Outside Directors and Outside Audit & Supervisory Board Members
Comprised exclusively of outside directors, these meetings facilitate an exchange of opinions regarding NGK management issues, with the intent of proactively contributing to discussions at Board of Directors meetings.
Times held: 1
Hearing convened by Audit & Supervisory Board Members and Outside Directors
Comprised of Audit & Supervisory Board members and outside directors, these hearings gather information from internal sources regarding the business environment and issues surrounding NGK.
Times held: 9
Note: Times held is the number of meetings between April 2018 and March 31, 2019.
Bodies Concerning Observance of Laws, Regulations, and Corporate Ethics
Aiming to increase customer satisfaction and trust by realizing even higher-quality products and services, this body deliberates the matters necessary to help the president and the Quality Committee Chair with decision-making regarding the following items.
|Environmental Protection Committee||This body formulates and deliberates the planning of matters necessary to help the president and the Environmental Protection Committee Chair with decision-making regarding the realization of our Core Policy on the Environment to promote business activities in harmony with the environment.|
|Safety and Health Committee||This body deliberates important issues on safety and health to assist the decision-making of the president and Safety and Health Committee Chair regarding the establishment of basic policies and priority targets pertaining to safety and health and the confirmation of labor accidents and priority activities.|
This body assists the president and CSR Committee Chair with decision-making by deliberating matters necessary for the observance of laws, regulations, and corporate ethics.
Observance of Laws, Regulations, and Corporate Ethics
Additionally, responses to items determined to pose a significant threat to the company among other matters, incidents or accidents related to laws, regulations or corporate ethics, as well as consideration and evaluation of the projects promoted by each subcommittee and other CSR-related items identified as important by the CSR Committee Chair, are also deliberated.
Times held: 3 times a year
|Internal Controls Committee||
This body deliberates matters necessary to help the president and Internal Controls Committee Chair with decision-making regarding internal controls system assessment and reporting related to financial reporting based on the Financial Instruments and Exchange Act.
Times held: 3 times a year
|Development Committee||This body deliberates items necessary to assist the decision-making of the president and Development Committee Chair regarding policies, evaluations, budgets, major individual planning, and commercialization projects related to development.|
|Facilities Committee||This body deliberates items necessary to assist the decision-making of the president and Facilities Committee Chair regarding the examination and evaluation of policies, budgets, performance, and major individual planning related to capital expenditure and information systems.|
|Education Council||This body deliberates items necessary to assist the president's decision-making regarding policies, systems, structures, and major promotion programs related to human resource development.|
|BCP Countermeasures Headquarters||Aimed at ensuring business continuity in times of emergency, this body executes the operation and maintenance of business continuity planning (BCP) in normal times as well as gives instructions on and support to restoration systems, and prioritizes restoration orders when BCP is in effect.|
|Central Disaster Prevention and Control Headquarters||This body executes requisite duties under commands from the Head and deliberates items necessary to assist the decision-making of the president and Head of this body regarding items related to earthquakes, storm and flood damage, fires, and explosions that threaten or significantly impact the company.|
|Security Export Control/Specified Export and Customs Clearance Control Committee||This body deliberates and determines items necessary for guidance for subsidiaries and affiliates, legal compliance and the improvement of other internal systems with respect to security export controls, specified export declaration systems, and the management of customs clearance operations.|
Business Execution Status
Regarding business execution based on the Board of Directors resolutions, the president presides over company business as the chief executive of business execution. The Executive Committee holds discussions to assist the president's decision-making with respect to important matters regarding business execution. In addition, the Board of Directors is asked for proactive recommendations for management by outside directors pertaining to management-related issues at the Corporate Council, which facilitates an exchange of opinions between outside directors and representative directors.
In line with audit policies and plans defined by the Audit & Supervisory Board, Audit & Supervisory Board members make an effort to collect information through hearings convened by Audit & Supervisory Board members and outside directors, in an attempt to communicate with directors and employees while monitoring director business execution by attending Board of Directors and Executive Committee meetings. At Audit & Supervisory Board meetings attended by outside Audit & Supervisory Board members, the members exchange information with accounting auditors and the Internal Auditing Department in an attempt to facilitate mutual cooperation.
Election of Board Members, Executive Officers, and Audit & Supervisory Board Members
With respect to the nomination of candidates for the Board of Directors and Audit & Supervisory Board, all representative directors discuss matters related to each candidate. The Nomination and Compensation Advisory Committee, of which external directors make up a majority, then deliberates matters related to each candidate, and reports the results to the Board of Directors. As for candidates for the Audit & Supervisory Board, approval is obtained from the Audit & Supervisory Board in order to secure the independence of Audit & Supervisory Board members. With consideration given to the report made by the Nomination and Compensation Advisory Committee, candidates for the Board of Directors and Audit & Supervisory Board are determined by resolution of the Board of Directors and their confirmation is set as an agenda item for the General Meeting of Shareholders. Members of the Board of Directors and Audit & Supervisory Board are then appointed by resolution of the General Meeting of Shareholders. Also, to further clarify the directors' mission and responsibilities, the term of office for directors is one year.
Training Policies for Executives
Newly appointed directors and executive officers are provided with training conducted by attorneys practicing in the United States and Japan related to the Companies Act and the Competition Law, conducted at the time of their appointment.
In addition, each year lectures are held, targeting all directors and executive officers, related to compliance with the Competition Law, focused on the expanding scope of Competition Law enforcement and practical business risks. In addition, with regard to outside directors, we provide regular opportunities for the provision of individual explanations by personnel from relevant business divisions concerning mainly proposals presented to the Board of Directors meeting as well as information and exchange of opinions pertaining to business environment and related issues.
Comments from Outside Directors
NGK Group Code of Conduct: make them your own, put them to work
On the occasion of its 100th anniversary, NGK revamped its NGK Group Philosophy and subsequently revised the NGK Group Code of Conduct. This was a truly significant undertaking. The revisions--regarding helping realize a sustainable society and taking human rights issues head on--go hand-in-hand with the SDGs that are currently gaining steam around the world.
The success of the Code of Conduct now depends on how much NGK Group employees are willing to take ownership of the code and apply it in everything they do.
There is no point in simply making slogans. We have to put the code to work by applying it to everything that NGK Group employees do at worldwide group companies.
To this end, everyone must thoroughly understand the Code of Conduct, cement it as their ideal behavioral guidelines, and monitor whether it is being properly enforced. When matters related to compliance occur, checks must be carried out by company departments in charge of legal affairs and internal auditing. When they relate to environmental protection, the Environmental Management Department must take charge.
Besides the Board of Directors overseeing governance, each and every department must execute its duties from its own unique standpoint.
Regarding the problem last year of the Non-Conformity Issue occurred in insulators, we have investigated internal audits and whether the case has been fairly addressed from the standpoint of the chairperson of the assessment committee, and we have received a point-by-point report to prevent a reoccurrence. Relevant divisions will thoroughly check that contracts and standards are adhered to, the Quality Management Department and the Group Compliance Department of the Head Office will audit this, and an external third-party institute will assess whether rules are being followed.
Help apply state-of-the-art technologies to business
When NGK celebrated its 100th anniversary, I was extremely honored to be appointed an outside director and join in propelling the company through its second century. I hope that I can use my experience in the private and public sectors to contribute to making NGK an even better corporate group.
In my more than 30 years of experience in the manufacturing industry, the NGK Group's ceramic technologies and other manufacturing expertise stand out as something not easily replicated by other companies. NGK is an excellent company that has given the world many significant products.
But science and technology is advancing at an accelerating pace. How well can companies apply state-of-the-art technology to business? Their success in this respect will provide opportunities for growth, and I hope to be of assistance in this area.
I believe that as an outside director, it is my role to view things from a different perspective than company executives in helping raise corporate value. Another role of mine is to monitor from a corporate governance standpoint whether the company is being properly operated in light of social justice and social norms. I will use my experience in running a company to provide practical, easy-to-apply advice to NGK company executives through the Board of Directors and other forums.
Ever since my days of working in a factory, I have made the philosophy of "fundamentals and righteousness" central to all my work. I believe that one of the values of the NGK Group Philosophy--"Quality of Management: Social trust is our foundation"--leads to my philosophy of "fundamentals and righteousness." What's most important is that each one of us takes action. I look forward to speaking with NGK employees on topics such as the company's philosophy and mission.