Selection Criteria for Independent Outside Directors and Independent Outside Audit & Supervisory Board Members
In order to ensure proper corporate governance, the Company prescribes its own unique “Selection Criteria for Independent Outside Directors and Independent Outside Audit & Supervisory Board Members” concerning the aptitude and independency of outside officers. The contents of these provisions are as follows.
Article 1 (Requirements of Outside Officers)
1. The requirements of an Outside Director and an Outside Audit & Supervisory Board Member of the Company (hereinafter referred to as “outside officer”) are prescribed herein.
2. The requirements of outside officers shall be satisfied at the time of election and during the period of office.
Article 2 (Requirements concerning the Aptitude of Outside Officers)
An outside officer 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 Group (the Company and its subsidiaries and affiliates) that operates its business globally.
Article 3 (Requirements concerning the Independency)
1．In order to secure the outside officer’s independency from the Company Group, each of the following items shall be satisfied.
(1) The outside officer shall have never been an officer, accounting advisor, or employee of the Company Group (the Company and its subsidiaries and affiliates).
(2) The outside officer shall not be and have not been over the past five years;
a. (i) A major shareholder of the Company Group (a shareholder who holds 10% or more of total voting rights, including indirect holding), or an employee, etc. (i.e., executive officer or employee who executes business) of an organization that is a major shareholder of the Company Group
(ii) An employee, etc. of an organization for which the Company Group is a major shareholder
b. A main lender of the Company Group (a lender to whom the Company 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 Company 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 Company Group
d. (i) A major business partner of the Company 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 Company Group is a major business partner or an employee, etc. of an organization for whom the Company Group is a major business partner
e. A person belonging to the auditing firm that is the accounting auditor of the Company Group
f. A person who receives from the Company Group 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 remunerations as an outside officer, 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 Company Group
g. A person who receives a large donation (10 million yen or more in one fiscal year) from the Company Group or a person belonging to an organization that receives a large donation from the Company Group
h. A person in a reciprocal relationship with the Company Group concerning the status as officers (in the event that a person belonging to an organization, in which an officer or employee of the Company Group is an officer, etc., becomes an officer of the Company Group)
(3) The outside officer shall not be a close relative (i.e., spouse or relative within two degrees of kinship) of the following persons.
a. A person who is currently or was an officer or important employee of the Company Group (the Company and its subsidiaries and affiliates)
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 officer, and unanimously agreed by other outside officers who satisfy the requirement stipulated in the Paragraph above, such person may be appointed outside officer, 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.