Approach to Corporate Governance

Our governance structure

Corporate governance is a key element in the operational agenda of NSG Group. The Group adopts a Company with Three Committees structure, under which we intend and seek to introduce additional safeguards for shareholders, increase the transparency of management, and enhance corporate governance by separating the functions of execution and oversight, with the role of the Independent External Directors strengthened.

We established the NSG Group Corporate Governance Guidelines, supporting the Principles of the TSE Corporate Governance Code. These Guidelines provide our basic principles and framework of corporate governance.

Please see here and refer to our Corporate Governance Report (as of December 2018) submitted to the Tokyo Stock Exchange for the details.

NSG Group Corporate Governance Guidelines

The Company has established the "NSG Group Corporate Governance Guidelines" as set out in the Attachment A, supporting the Principles of the TSE Corporate Governance Code which took into effect on 1 June 2015 and was revised on 1 June 2018.

These Guidelines provide the basic principles and framework for the NSG Group to enhance its corporate values in a sustainable way, on a medium-to-long term basis, and thus increasing the common value of the Group for our various stakeholders including our shareholders.

Under the structure of the corporate governance as shown in the Guidelines including the balanced roles and membership of the Board of Directors, its three committees* of the Nomination, Audit and Compensation, Independent External Directors and Executive Officers, we aim to ensure the appropriate system of check-and-balance and accountability, which enables the management to make prompt and bold business decisions in an effective, efficient and ethical manner, as well as balancing good relationships with our stakeholders such as shareholders, customers, employees, suppliers and communities.

The Group will accelerate the execution of the Medium-term Plan in line with the Long-term Strategic Vision with our management team led by CEO, Shigeki Mori within such corporate governance framework.

NSG Group values good corporate governance as pivotal agenda for management and remains committed to its continuing enhancement.

*NSG Group adopted a "Company with Three Committees" structure in 2008.

NSG Group Corporate Governance Guidelines(Attachment)

Open Management System

Company with Committees

The adoption of the ‘Company with Committees’ model has brought the NSG Group into line and with best practice. It has introduced additional safeguards for shareholders, increased transparency and enhanced corporate governance, with the role of the independent external directors strengthened.

There are three Board committees (Nomination, Audit and Compensation) and four independent external directors.

The Nomination Committee decides the details of the agenda items to be submitted to the General Meeting of Shareholders concerning the appointment and removal of directors. The Committee consists of five directors, including four independent external directors. Its chairman is Mr Masatoshi Matsuzaki, an independent external director.

Criteria of Independency for External Director at NSG: Click here

The Audit Committee is chaired by an independent external director, Mr Toshikuni Yamazaki, and comprises four independent external directors. It conducts audits of the execution of duties by directors and executive directors and ensures that adequate risk management processes are followed. It also decides the details of agenda items to be submitted to the General Meeting of Shareholders concerning the appointment and removal of independent auditors.

The Compensation Committee makes decisions on compensation of individual directors and executive officers. The Committee is chaired by an independent external director, Mr Yasuyuki Kimoto, and comprises five directors, including four independent external directors.

Risk management

The scope of our operations introduces potential risks to our business activities, requiring effective risk management. These include the effects of changes in debt market prices, foreign currency exchange rates, credit risks, energy prices, liquidity, interest rates and business disruption. Our enterprise risk management process enables the impact and likelihood of the most important risks to be assessed in a standard format.

The information is used to assess the cumulative risk exposure of the Group and promote effective global risk responses, thus strengthening our overall risk management structure. For further discussion on our risks and opportunities associated with climate change, click here.