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Evaluation of the Effectiveness of the Board of Directors

Basic Policy

With the aim of evaluating the effectiveness of the Board of Directors, the Company has in place a policy of regularly identifying issues related to enhancing the effectiveness of the Board of Directors, the Nomination Advisory Committee, and the Remuneration Advisory Committee and confirming the status of efforts to resolve such issues. To incorporate an objective evaluation and analysis from a standpoint that is independent from the Company, third-party evaluations are conducted once every three years. The Company confirms the status of efforts to resolve issues identified through these third-party evaluations, and conducts self-evaluations during the years between third-party evaluations to determine specific initiatives to undertake each year.
Cycle for continuous improvement of effectiveness

Cycle for continuous improvement of effectiveness

Cycle for continuous improvement of effectiveness

Result of 2019

For the Board of Directors meetings in 2019, while the overall evaluation of business conditions, the size and composition of the Board of Directors and the effectiveness of the Board of Directors was high, we recognize that there is room for improvement in the selection of agenda items that can be concentrated on discussions on important management issues, communication outside the Board of Directors, etc., and the need for further strengthening the Board of Directors secretariat system.
In light of these results, we are continually working to improve the effectiveness of the Board of Directors by optimizing agenda items, sharing information inside and outside the Board of Directors to deepen discussions, improving operations, and reinforcing the secretariat system in order to further strengthen the monitoring functions of the Board of Directors.

Ongoing Initiatives-Developing Succession Plans for the CEO, External Directors and External Audit & Supervisory Board Members

Within the evaluations of the effectiveness of the Board of Directors, the Company determined that the development of succession plans for the CEO is a task that should be continuously examined by the Board of Directors, the Nomination Advisory Committee, and the Remuneration Advisory Committee. The Company believes that the CEO should have the responsibility and authority to select his or her own successor and that the CEO should be in charge of drafting succession plans. In addition, the Nomination Advisory Committee, which is responsible for certain functions of the Board of Directors, should receive sufficient reports from the CEO regarding the details of the succession plans and the candidates chosen. After the exchange of opinions, the committee should provide feedback to the CEO, evaluating the candidates chosen from an independent standpoint and examining their appropriateness based on management issues the Company is facing.
In addition, the evaluations of the effectiveness of the Board of Directors have highlighted the need for developing succession plans for external directors and external Audit & Supervisory Board members, who play an essential role in monitoring the Company’s management. The Company believes that the development of succession plans, which should include oversight on various conditions pertaining to term of office and clear criteria for successor candidates, is an issue that should be constantly on the agenda of the Nomination Advisory Committee rather than something only addressed prior to the succession event.