Corporate Governance Organization

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Basic Views

The Nikon Group will strive to achieve sustainable growth and enhancement of its corporate value over the medium- to long-term, through improving management efficiency and transparency and further strengthening the supervisory function over management in light of the purpose of Japan's Corporate Governance Code.

System

Aiming to further enhance corporate governance, Nikon adopted a company with an Audit and Supervisory Committee. This position further strengthens the supervisory function of the Board of Directors as it strives to streamline decision-making and clarify management responsibility arising through delegation of authority.

Nikon's Corporate Governance Organization (As of June 29, 2017)

Board of Directors

The Board of Directors supervises management by directors and assumes the decision-making functions on the matters prescribed under laws and regulations, and the Articles of Incorporation of the Company, as well as the important matters concerning the Nikon Group. For the purpose of clarifying the scope of delegation to the executive directors and officers while ensuring prompt decision-making and management by the executive directors and officers, the Company specifically sets out the matters subject to deliberation at the Board of Directors in the criteria for matters subject to deliberation and report at the Board of Directors. For example, the Board of Directors makes decisions on matters concerning important management, including the basic management policies, the Medium Term Management Plan, the annual plan, the Basic Policy on Internal Control System, and investments and loans exceeding a certain amount.
Moreover, in order to further strengthen the supervisory function of the Board of Directors, the Company has appointed four independent external directors (including three Audit and Supervisory Committee members).

Audit and Supervisory Committee

The Audit and Supervisory Committee audits and supervises the status of management by directors other than those who are Audit and Supervisory Committee members, and officers. For such purpose, Audit and Supervisory Committee members regularly attend the important meetings such as the meetings of the Board of Directors and the Executive Committee, and conducts audits and supervision over the management and directors. In addition, to further enhance independence and neutrality of the audit system, the Audit and Supervisory Committee shall consist of five Audit and Supervisory Committee members including three independent external directors.

Compensation Committee

The Company establishes the Compensation Committee which consists of representative directors, external directors and external experts. The Compensation Committee deliberates and makes proposals for policy regarding executive compensation as well as various related systems so as to ensure objectivity, transparency and linkage with performance in the process of determining executive compensation.

Executive Committee

The Executive Committee, as the highest decision-making body of the management, swiftly and decisively makes decisions on individual major management issues delegated by the Board of Directors, in accordance with basic management policies, etc. as determined by the Board of Directors.

External Director

In the appointment of its external directors, the Company attaches importance to ensuring their independence. The Company appoints external director candidates from among those with either a wealth of knowledge and experience, etc., as executives of other companies, or those with expertise and experience, etc., as specialists such as attorneys and certified public accountants, who are qualified to take part in a management supervision function from a fair and objective standpoint independent from management. 

Reasons for Appointment

Reasons for Appointment of External Director, except Audit and Supervisory Committee Members

Name Reasons for Appointment
Akio Negishi Akio Negishi serves as President, Representative Executive Officer of Meiji Yasuda Life Insurance Company, and possesses many years of management experience and exceptional knowledge, and we believe that he will be able to contribute to our management overall from a big-picture perspective.

Reasons for Appointment of External Directors and Audit and Supervisory Committee Members

Name Reasons for Appointment
Haruya Uehara Haruya Uehara has a career as President of Mitsubishi UFJ Trust and Banking Corporation and possesses many years of management experience and outstanding insight, and we believe that he will be able to contribute to securing the soundness and appropriateness of management, as well as to increasing transparency.
Hiroshi Hataguchi Hiroshi Hataguchi has expertise and experience concerning compliance, etc., as an attorney at law, and we believe that he will be able to contribute to securing the soundness and appropriateness of management, as well as to increasing transparency
Kunio Ishihara Kunio Ishihara has a career as President of Tokio Marine & Nichido Fire Insurance Co., Ltd., etc., and possesses long years of management experience and outstanding insight, and we believe that he will be able to contribute to securing the soundness and appropriateness of management, as well as to increasing transparency.

Attendance at Meetings of the Board of Directors, Audit and Supervisory Committee, and Board of Corporate Auditors (Year ended March 31, 2017)

Name Category Board of Directors Audit and Supervisory committee Board of Corporate auditors
Akio Negishi Director 11 of 12 - -
Haruya Uehara Director
(Audit and Supervisory committee member)
11 of 12 6 of 7 -
Corporate auditor 2 of 3 - 3 of 3
Hiroshi Hataguchi Director
(Audit and Supervisory committee member)
12 of 12 7 of 7 -
Corporate auditor 3 of 3 - 3 of 3
Kunio Ishihara Director
(Audit and Supervisory committee member)
11 of 12 6 of 7 -

Compensation of Directors and Officers

Compensation for Directors and Corporate Auditors (Year ended March 31, 2017)

Category Monthly compensation Subscription rights to shares granted as stock-related compensation Bonuses Total
Number of persons Amount of compen-
sation
(million yen)
Number of persons Amount of compen-
sation
(million yen)
Number of persons Amount of compen-
sation
(million yen)
Number of persons Amount of compen-
sation
(million yen)
Directors other than those who are Audit and Supervisory committee members (of which External directors) 12
(3)
294
(13)
8
(-)
117
(-)
-
(-)
-
(-)
12
(3)
411
(13)
Directors who are Audit and Supervisory committee members (of which External directors) 5
(3)
62
(24)
- - - - 5
(3)
62
(24)
Corporate auditors(of which External corporate auditors) 4
(2)
18
(5)
- - - - 4
(2)
18
(5)
Total 21 374 8 117 - - 21 491

Compensation System

Basic policies regarding compensation Executive compensation will be determined to satisfy the following basic matters.
  • Executive compensation should motivate executives to sustainably improve values of companies and shareholders, as well as enhance willingness and morale
  • Executive compensation should keep, cultivate and reward excellent personnel
  • The decision process for the compensation system should be objective and transparent
Compensation system and performance-based structure
  • A)The compensation system for executive directors and officers is comprised of the following items. The distribution ratio for compensation is determined by changing the percentages of fixed monthly compensation and performance-based compensation according to positions and duties.
  • "Fixed monthly compensation"
    Monetary compensation not based on performance.
  • "Bonuses"
    This monetary compensation is based on the degree of accomplishment and qualitative assessment of the capital efficiency and profitability of the Group as a whole and departments in charge on a single-year basis, and is determined within the range of 0% to 200% of the standard payment.
  • "Performance-based stock compensation"
    Stock compensation is determined within the range of 0% to 150% in accordance with achievement of consolidated net sales and consolidated operating income, etc. for the final fiscal year of the Medium Term Management Plan to be resolved per each three fiscal years with the aims of sharing value with shareholders and enhancing willingness and morale for improvement of medium- and long-term performance.
  • "Subscription rights to shares granted as stock-related compensation"
    Subscription rights to shares are granted with the aims of sharing value with shareholders and enhancing willingness and morale for improvement of long-term performance, within the range not exceeding 5% of the share dilution ratio.
  • B)The compensation system for non- executive directors consists only of "fixed monthly compensation."
Method for determining compensation level and amount The Compensation Committee discusses and advises on related systems in order to determine the level and system appropriate to the duties on account of compensation levels of major Japanese companies that globally develop their businesses so as to determine the compensation amount consistent with the performance of the Group and its business scale.
The Compensation Committee consists of the representative directors, external directors, and external experts, and discusses the establishment of executive compensation policies, consideration of the compensation system, and specific calculation method. Based on the results of the discussions, compensation for directors other than those who are Audit and Supervisory Committee members is determined by a resolution of the Board of Directors, and compensation for directors who are Audit and Supervisory Committee members is determined by consultation among directors on the Audit and Supervisory Committee.

Number of Females and Non-Japanese Appointed as Nikon Group Directors / Officers and Corporate Auditors (As of March 31, 2017)

Category Number of female Number of non-Japanese
Nikon Corporation 0 0
Group companies* Directors
Officers
2 36
Corporate auditors 1 3