Basic Policy on Corporate Governance
Shiseido has established BEAUTY INNOVATIONS FOR A BETTER WORLD as OUR MISSION in our Corporate Philosophy, THE SHISEIDO PHILOSOPHY. We define corporate governance as our “platform to realize sustainable growth through fulfilling OUR MISSION.”
We strive to maximize medium-term corporate and shareholder value through dialogues with all stakeholders (employees, consumers, business partners, shareholders, society, and the Earth). In addition, while fulfilling social responsibilities, we aim to achieve optimized distribution of values to respective stakeholders.
Corporate Governance System
Shiseido’s Corporate Governance Framework from January 1, 2022:
Reasons for Adoption of Current Corporate Governance System
Shiseido has adopted the framework of a company with the Audit & Supervisory Board system, which exercises the dual checking functions over business execution by the Board of Directors and over the legality and effectiveness by the Audit & Supervisory Board members. In order to maintain and improve management transparency, fairness and speed that are provided in the basic policy for the corporate governance within the framework, we have incorporated superior functions of a company with nominating committee, etc., and a company with audit and supervisory committee, reinforcing the supervisory functions of the Board of Directors.
We concluded that adopting a “monitoring board-type” would be appropriate to sufficiently ensure effective supervisory functions over the whole Shiseido Group, and have implemented a “monitoring board-type corporate governance” while leveraging advantages of the company with the Audit & Supervisory Board system.
Meetings Attended by Directors and Executive Officers
Composed of eight members including four external directors, the Board of Directors of Shiseido is small and thereby able to make decisions quickly under the leadership of the President and CEO, who serves as a Chairman. The Board of Directors holds approximately one meeting a month to discuss all significant matters.
Shiseido adopts an Executive Officer System, wherein functions of the Board of Directors to oversee the execution of business are separated from those of executive officers, who are responsible for business execution. We also set up the “Global Strategy Committee,” a meeting body that is responsible for deliberation over important matters for Shiseido Group from various viewpoints. In addition, we organize meeting bodies by theme, such as the “Innovation Committee” and the “Sustainability Committee.” These functions allow Shiseido to drive delegation of power to executive officers in order to clarify responsibilities and accelerate business execution.
Diversity of Directors and Audit & Supervisory Board Members
We believe that the Board of Directors of Shiseido should be composed of directors with various viewpoints and backgrounds, on top of multilateral sophisticated expertise. This ensures effective supervision over the execution of business, as well as decision-making on critical matters.
Furthermore, we believe that Audit & Supervisory Board members should have the same diversity and sophisticated expertise as the directors, as they have a duty to attend meetings of the Board of Directors and state opinions as necessary.
When selecting candidates, we place importance on ensuring rich diversity, considering not only the achievement of gender equality, but other attributes including age, nationality and personality, as well as insights and experiences in various fields related to management. In addition, we have set a maximum term of office for external directors and external Audit & Supervisory Board members. This allows for views to be reflected to business management without interference from Shiseido’s existing structure, while the handover period from long-serving external directors and Audit & Supervisory Board members to newly appointed external directors and Audit & Supervisory Board members ensures appropriate transition.
Remuneration
Shiseido regards the directors’, Audit & Supervisory Board members’ and executive officers’ remuneration policy as an important matter for corporate governance. For this reason, in accordance with our basic philosophy for remuneration, our renumeration policy for directors, Audit & Supervisory Board members and executive officers is designed in the Nomination & Remuneration Advisory Committee chaired by external directors, incorporating objective points of view.
Director and executive officer renumeration comprises basic remuneration and performance-linked remuneration. We set remuneration levels by making comparisons with companies in the same industry, or of the same scale, in both Japan and overseas, and by taking Shiseido’s financial conditions into consideration.
External directors and Audit & Supervisory Board members receive only basic remuneration, as fluctuating remuneration such as performance-linked remuneration is inconsistent with their supervisory functions which should be independent of business execution.
