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, by 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, 2021)

Board of Directors

The Board of Directors supervises management by directors and assumes the decision-making functions regarding matters prescribed under laws and regulations, 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 executive directors and officers while ensuring prompt decision-making and management by executive directors and officers, the Company specifically sets out the matters subject to deliberation at Board of Directors’ meetings in the criteria for matters subject to deliberation and reporting at Board of Directors’ meetings. For example, the Board of Directors makes decisions on matters concerning important management issues, 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 five independent external directors (including three Audit and Supervisory Committee members).
Meetings of the Board of Directors are presided at by Chairman of the Board, who is a non-executive director.

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 as an independent body. For such a purpose, Audit and Supervisory Committee members regularly attend meetings of the Board of Directors as well as important meetings such as the Executive Committee, and conducts audits and supervision over management and directors. In addition, to further enhance the 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.

Nominating Committee

The Company has a Nominating Committee as a voluntary advisory body to the Board of Directors. External directors comprise a majority of the members, and an external director chairs the Committee.
The Nominating Committee primarily formulates criteria for the election and removal of the chief executive officer, president and directors, nominates candidates, considers the composition of the Board of Directors, and oversees evaluation and assignment of officers so as to ensure that decisions on the election and removal of directors and officers are transparent and objective.

Compensation Committee

The Company has a Compensation Committee as a voluntary advisory body to the Board of Directors. External directors and external experts comprise a majority of its members, and an external director chairs the Committee. 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 management, swiftly and decisively makes decisions on individual major management issues delegated by the Board of Directors, in accordance with basic management and other policies, as determined by the Board of Directors.

External Director

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

Reasons for Appointment

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

Name Reasons for Appointment
Akio Negishi Akio Negishi served as President, Representative Executive Officer of Meiji Yasuda Life Insurance Company and other important positions, 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.
Shigeru Murayama Shigeru Murayama served as Representative Director of Kawasaki Heavy Industries, Inc. and other important positions, and possesses long years of management experience and outstanding insight, and we believe that he will be able to contribute to the Company’s overall management from a big-picture perspective.

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

Name Reasons for Appointment
Kunio Ishihara Kunio Ishihara has a career as Representative Director 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 the management, as well as to increasing transparency.
Shiro Hiruta Shiro Hiruta served as Representative Director of Asahi Kasei Corporation and other important positions, and possesses long years of management experience and outstanding insight, and we believe that he will be able to contribute to the Company’s overall management from a big-picture perspective and that he can also contribute to securing the soundness and appropriateness of the Company’s management as well as to the enhancement of its transparency.
Asako Yamagami Asako Yamagami has work experience as an in-house lawyer and possesses expertise and experience as a lawyer regarding compliance and other matters. We believe that she will be able to contribute to securing the soundness and appropriateness of the Company’s management as well as to the enhancement of its transparency.

Attendance at Meetings of the Board of Directors, and Audit and Supervisory Committee (Fiscal year ended March 31, 2021)

Name Category Board of Directors Audit and Supervisory Committee
Akio Negishi Director 15 of 15 -
Shigeru Murayama Director 12 of 12 -
Kunio Ishihara Director
(Audit and Supervisory Committee member)
14 of 15 9 of 10
Shiro Hiruta Director
(Audit and Supervisory Committee member)
15 of 15 7 of 7
Asako Yamagami Director
(Audit and Supervisory Committee member)
12 of 12 7 of 7

Evaluation of the Board of Directors’ Effectiveness

Nikon asks a third-party organization to analyze and evaluate the effectiveness of its Board of Directors in order to further improve its functions. The efforts to address issues identified through the previous evaluation (for the fiscal year ended March 31, 2020) as well as the issues identified in this evaluation (for the fiscal year ended March 31, 2021) and the future responses are outlined below.

Evaluation Method
  • A third-party organization conducted a survey and individual interviews of all directors on general matters related to the Board of Directors, its composition, meeting preparations, and details of deliberations, among others, to evaluate Board effectiveness and identify issues.
  • Based on the evaluation results, discussions were held at a meeting of the Board of Directors on how to improve its functions.
Evaluation Results

<Efforts to Address Issues Identified in Previous Evaluation>

  • Monitoring of progress of Medium-Term Management Plan and growth strategies
    Enhanced the agenda of Board of Directors meetings by focusing discussions on important management issues and growth strategies and recognized the potential and need for further improvements in monitoring the progress of the Medium-Term Management Plan
  • Commencement of full-fledged implementation of succession plan
    Commenced the succession plan for the president and held discussions at meetings of the Nominating Committee regarding plans for fostering candidates
  • Strengthening of secretariat function of the Board of Directors
    Increased the quality and quantity of information provided to external directors and distributed materials prior to meetings to facilitate more extensive discussions
Main Issues Identified in This Evaluation and Future Response
  • Strengthen oversight in preparation for establishment of next medium-term management plan
    Strengthening of oversight functions in preparation for the establishment of the next medium-term management plan through an ongoing focus on discussions of growth strategies, the narrowing of agenda items based on importance, and the enhancement of discussions
  • Monitor reinforcement of internal control and risk management systems
    Provision of appropriate advice and monitoring based on regular reports on internal control and risk management system implementation for the purpose of reinforcing systems
  • Enhance coordination between Nominating Committee/Compensation Committee and Board of Directors
    Invigoration of discussions at Board of Directors meetings by increasing the frequency of reports to the Board of Directors on activities of the Nominating Committee and Compensation Committee

Taking into account the issues raised by this evaluation, Nikon plans to continue implementing measures to further enhance Board effectiveness going forward.

Compensation of Directors and Officers

Compensation for Directors (Fiscal year ended March 31, 2021)

Category Directors other than those who are Audit and Supervisory Committee members (of which External Directors) Directors who are Audit and Supervisory Committee members (of which External Directors) Total
Fixed compensation Fixed monthly compensation Number of persons 9
(3)
7
(5)
16
(8)
Amount of compensation(million yen) 265
(30)
104
(45)
369
(75)
Performance-based compensation Bonuses Number of persons -
(-)
- -
(-)
Amount of compensation(million yen) -
(-)
- -
(-)
Performance-based stock remuneration Number of persons -
(-)
- -
(-)
Amount of compensation(million yen) -
(-)
- -
(-)
Stock compensation Subscription rights to shares granted as stock-related compensation Number of persons 4
(-)
- 4
(-)
Amount of compensation(million yen) 60
(-)
- 60
(-)
Total Number of persons 9
(3)
7
(5)
16
(8)
Amount of compensation(million yen) 324
(30)
104
(45)
429
(75)

Number of Women and Non-Japanese Appointed as Nikon Group Directors / Officers and Corporate Auditors (As of March 31, 2021)

Category Women Non-Japanese
Nikon Corporation 1 1
Group companies* 3 31