Selection Criteria for Independent Outside Directors
In order to ensure proper corporate governance, the Company prescribes its own unique “Selection Criteria for Independent Outside Directors” concerning the aptitude and independency of Outside Directors. The contents of these provisions are as follows.
Article 1 (Requirements of Outside Directors)
1. The requirements of an Outside Director of the Company are prescribed herein.
2. The requirements of Outside Directorsshall be satisfied at the time of election and during the period of office.
Article 2 (Requirements concerning the Aptitude of Outside Directors)
An Outside Director shall possess a proven track record, abundant experience and expertise as a corporate executive, attorney at law, certified public accountant, or an academic, as required to carry out business expansion at a global level while strengthening corporate governance in the Company and its subsidiaries and affiliates (hereinafter, the “Group”) that operate their businesses globally.
Article 3 (Requirements concerning the Independency)
1. In order to secure the Outside Directors’ independency from the Group, each of the following items shall be satisfied.
(1) The Outside Director shall have never been an officer or executive officer (hereinafter, “officer”), accounting advisor, or employee of the Group.
(2) The Outside Directorshall not be and have not been over the past five years;
a. (i) A major shareholder of the Group (a shareholder who holds 10% or more of total voting rights, including indirect holding), or an employee, etc. (i.e., executive director or employee who executes business) of an organization that is a major shareholder of the Group
(ii) An employee, etc. of an organization for which the Group is a major shareholder
b. A main lender of the Group (a lender to whom the Group owes, at the end of respective fiscal year, the amount equivalent to or more than 2% of the value of the Company’s consolidated total assets), or an employee, etc. of a main lender of the Group (if the main lender is a corporate group, then the group shall satisfy this item; the same shall apply hereinafter)
c. An employee, etc. of a lead-manager securities company of the Group
d. (i) A major business partner of the Group (2% or more of consolidated net sales during one fiscal year) or an employee, etc. of a major business partner
(ii) A person for whom the Group is a major business partner or an employee, etc. of an organization for whom the Group is a major business partner
e. A person belonging to the auditing firm that is the accounting auditor of the Group
f. A person who receives from theGroup large amounts of money or other financial assets (10 million yen or more in one fiscal year) as a consultant, accounting specialist or legal expert besides the compensation as an Outside Director, or a person belonging to an organization that receives large amounts of money or other financial assets (1% or more of net sales for one fiscal year of the aforesaid organization) from the Group
g. A person who receives a large donation (10 million yen or more in one fiscal year) from the Group or a person belonging to an organization that receives a large donation from the Group
h. A person in a reciprocal relationship with the Group concerning the status as officers
(3) The Outside Directorshall not be a close relative (i.e., spouse or relative within two degrees of kinship) of 21 the following persons.
a. A person who is currently or was an officer or important employee of the Group
b. A person who falls under any items listed in Sub-paragraph (2), Paragraph 1 of Article 3 (excluding unimportant employees and those who belong to such an organization)
2. Notwithstanding the Paragraph above, if a person is recognized as not having any conflict of interest with ordinary shareholders were the person to become an Outside Director, and unanimously agreed by other Outside Directors who satisfy the requirements stipulated in the Paragraph above, such person may be appointed Outside Director, pursuant to the Companies Act. In this case, such facts and the reasons for appointment shall be stated in the Reference Documents for General Meeting of Shareholders, the Securities Report and other relevant documents.