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Corporate Governance


In keeping with the group’s mission, we established the Basic Policy on Corporate Governance with the aim of meeting the expectations of all our stakeholders, including shareholders, and helping to achieve sustainable growth while maximizing our corporate value over the medium to long term. Under this policy we also work toward further enhancing our corporate governance.

Taiheiyo Cement Group Management Organization

▶GRI102-18,19,22,23,24,28,29,30,33,35,36,37

Corporate Governance System

Our management structure is based upon the Board of Directors and Board of Auditors. However, the Nomination and Compensation Advisory Committee was established on March 31, 2021 as an advisory body of the Board of Directors on decisions regarding the nomination and remuneration of executives. We have also introduced an executive officer system and are endeavoring to separate management decision-making and monitoring/supervisory functions from business execution. Our Corporate Auditor’s Office provides comprehensive support for corporate auditors in the performance their duties. We have set up an internal control system in the Internal Auditing Department and, by means of internal audits, strive to ensure that operations are properly executed in the company and group companies.
In addition, the CSR Management Committee was established to strengthen our corporate governance, for example by improving our business activities from the perspective of CSR.

Corporate Governance System
Corporate Governance Syste

Overview of Our Directors and Corporate Auditors

Name Position Outside
Officer
Nomination
and
Compensation
Advisory
Committee
Expertise and Experience
Corporate
Management
Production
Technologies
Research
Sales
Marketing
Finance
Accounting
Legal
Risk
Management
Global
Business
Shuji Fukuda Director
Chairman
Masafumi Fushihara Representative
Director
President
Yuuichi Kitabayashi Representative
Director
Vice President
Masahiro Karino Director
Senior Executive
Officer
Kunihiro Ando Director
Senior
Executive
Officer
Tetsuya Ohashi Director
Senior Executive
Officer
Yoshiko Koizumi Director
(Chairperson)
Shinhachiro Emori Director
Hideyuki Furikado Director
Shigeru Matsushima Corporate Auditor
(Standing)
Katsuhide Fukuhara Corporate Auditor
(Standing)
Wakako Mitani Corporate Auditor
Yoshio Fujima Corporate Auditor


Evaluating the Effectiveness of the Board of Directors

In accordance with the Basic Policy on Corporate Governance, we analyze and evaluate the overall effectiveness of the Board of Directors on an annual basis. We employ a self-evaluation system in which all directors and corporate auditors fill out a questionnaire. The chairman of the board and outside directors analyze and assess the results of the questionnaire and report the details to the Board of Directors. Future challenges and measures are then discussed and confirmed. We have made improvements to the structure and operations of the Board of Directors on the basis of the results, and the evaluation has deemed that the overall effectiveness of our Board of Directors is being ensured.


Outline of Our Governance System (As of June 29, 2021)
Item No. of people etc.
Organizational structure Company with a Board of Auditors
Chairman of the board Chairman
No. of directors (No. of female directors) 9 (1)
 No. of outside directors included in that figure 3 (1)
 No. of independent directors included in that figure 3 (1)
Tenure of a director 1 year
Executive officer system Yes
No. of corporate auditors (No. of female corporate auditors) 4 (1)
 No. of outside officers included in that figure 2 (1)
 No. of independent officers included in that figure 2 (1)

Major Meetings Held
Meeting No. of times held Presence of outside officers
Board of Directors 14 100%
Board of Auditors 13 100%
Executive Committee 23

Appointment of Board Members

Nomination and Appointment of Prospective Directors

The president proposes prospective directors and outside directors to the Board of Directors, including outside directors, in accordance with the Basic Policy on Corporate Governance. After deliberations and decisions by the Board of Directors, candidates are presented to the General Meeting of Shareholders, whose vote decides their appointment. The deliberations of the Board of Directors respect the results of the discussions and findings of the Nomination and Compensation Advisory Committee

Nomination and Appointment of Prospective Corporate Auditors

After gaining the approval of the Board of Auditors the president proposes to the Board of Directors prospective corporate auditors endowed with suitable experience and skills, and with adequate expertise in financial affairs, accounting and legal affairs. After deliberations and decisions by the Board of Directors, candidates are presented to the General Meeting of Shareholders, whose vote decides their appointment.

Nomination and Appointment of Prospective Outside Officers

Prospective outside officers must satisfy the company’s Independence Criteria for Outside Officers and be capable of supervising our directors and management from an independent, external standpoint, and of providing proper and appropriate advice based on their experience and insights from careers in professions such as lawyer, corporate manager, certified public accountant and government official.


Board Member Remuneration

Determining Board Member Remuneration

A Nomination and Compensation Advisory Committee is established to determine board member remuneration. The committee is chaired by an outside director and has a majority of outside directors. The committee deliberates and reports its findings to the Board of Directors, which respects those findings. The decision is then entrusted to the representative director, within the scope decided at the General Meeting of Shareholders and determined by our company regulations.
The remuneration system for directors (excluding outside directors) consists of fixed compensation, share-based compensation and performance-based compensation, while the remuneration system for the outside directors consists solely of fixed compensation. The remuneration system for auditors also consists solely of fixed compensation.

  • Fixed compensation is set according to position.
  • erformance-based compensation is calculated by multiplying profit attributable to owners of parent company shares for the fiscal year under review by 1% (up to 400 million yen) and a coefficient according to position.
  • Share-based compensation is calculated according to position and issued yearly in the form of share options with restrictions on transfer. In principle, the restrictions on transfer are rescinded on the day the director retires.

Annual Remuneration of Board Members

Remuneration for directors was decided at the General Meeting of Shareholders on June 29, 2021. After the said meeting, there are nine directors (of whom three are outside directors), for whose annual remuneration there is a maximum of 1.2 billion yen (of which 100 million yen is for outside directors). Included in that is a maximum annual sum of 200 million yen (200 thousand shares) as restricted transfer share-based remuneration.
Remuneration for corporate auditors was decided at the General Meeting of Shareholders on June 29, 2020. After the said meeting, there are four corporate auditors, for whose monthly remuneration there is a maximum of 13 million yen.


Annual Remuneration of Board Members (FY2021)
Category No. of board
members
remunerated
Amount of
remuneration paid
(Million yen)
Director 15 552
Corporate Auditor 4 72
Sub-total 19 624

The above count of board members and corporate auditors who received remuneration includes eight board directors (including one outside director) who retired or resigned at the conclusion of the 22nd Ordinary General Meeting of Shareholders held on June 26, 2020.


Internal Control System

▶GRI102-30

We follow the Basic Policy for Building an Internal Control System to ensure suitable and efficient operations at the company and group companies. Our basic approach is to improve and strengthen systems that are currently in operation, and to review and reappraise the essential matters. In accordance with this policy, and with the aim of establishing systems that ensure suitable operations at group companies, we are running training and awareness campaigns about Revisions to Our Internal Audit Regulations and Internal Audit Detailed Regulations (November 2020) and our Audit Manual for Auditors Dispatched to Affiliated Companies. Audits were carried out at four Taiheiyo Cement business sites and fifteen domestic group companies in FY2021. Matters in need of improvement were identified, and advice and recommendations are being given.


Compliance with Japan’s Corporate Governance Code

The table below show where we disclose information regarding the principles in the Corporate Governance Code that require disclosure.

The 11 Principles in the Corporate Governance Code Requiring Disclosure (Prior to revisions to the Corporate Governance Code)
Principle Where disclosed
Website※1 Fundamental Policies
※2
Debriefing sessions
※3
Principle 1.4 Cross-shareholdings Article 23
Principle 1.7 Related party transactions Article 24
Principle 2.6 Roles of corporate pension funds as asset owners
Principle 3.1 Full disclosure

Company objectives (e.g., our mission), management strategies, management plans
Basic concepts and policies on corporate governance
Policies and procedures in determining the remuneration of senior management and directors Article 16
Policies and procedures on the appointment of senior management, and nomination of prospective directors and corporate auditors Article 6
Article 10
Article 13
Supplementary Principle 4.1.1 Board of Directors’ decisions and scope of matters delegated to management Article 3
Principle 4.9※4 Independence criteria for outside directors Article 4
Supplementary Principle 4.11.1 Views on appropriate balance between knowledge, experience and skills of the Board of Directors as well as on diversity and appropriate board size   Article 4
Supplementary Principle 4.11.2 Status of concurrent positions at other listed companies held by directors and corporate auditors of the Taiheiyo Cement Group Article 8
Article 15
Supplementary Principle 4.11.3 Analysis and evaluation of the overall effectiveness of the Board of Directors and summary of results Article 20
Supplementary Principle 4.14.2 Training policy for directors and corporate auditors Article 19
Principle 5.1 Policy for constructive dialog with shareholders Article 25

※1 Our corporate website
※2 Our Basic Policy on Corporate Governance
※3 Our Corporate Governance Report
※4 In addition to the above three methods of disclosure, we disclose information in our securities reports and materials for our general shareholders’ meeting.

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