In order to continue being "a corporation that is trusted and respected," NDK positions corporate governance as a key management issue. And in order to increase corporate value, we not only engage in management streamlining, but also in the strengthening of our management monitoring function and the thoroughness of our legal compliance, and enhance our corporate governance with the following five points as our basic policy.
Our Corporate Governance enhancement history
|1985||Installed Internal Audit Office|
|2006||Formulated Basic Policy concerning Internal Control System Construction|
|2008||Revised Basic Policy concerning Internal Control System Construction|
|2011||Terminated Executive Retirement Benefit Framework|
|2014||Initiated Executive Officer Framework|
|2015||Appointed External Director Revised Basic Policy concerning Internal Control System Construction
Formulated NDK Group Action Guidelines
|2018||Installed Independent Advisory Committee (issues recommendations concerning the appointment, removal, and remuneration for Directors and Executive Officers) under the Board of Directors|
|2019||Revised NDK Group Action Guidelines|
|2021||Formulated Basic Policy concerning Director Remuneration and Executive Remuneration Bylaws|
NDK Corporate Governance System Overview
Board of Directors
Oversees decision-making concerning basic management policy and the enforcement of important operations, and the enforcement status of Executive Officers.
Audit and Supervisory Board
Audits the enforcement of Director duties. One Standing Auditor is maintained, and that auditor shares information regarding company operations, etc., with the Part-Time Auditors.
Independent Advisory Council
With an Independent External Director as the committee chair, this body advises the Board of Directors concerning the appointment, removal, and remuneration of Directors and Executive Officers.
The Executive Officer Committee
The Executive Officer Committee, which is composed of Executive Officers and chaired by the Representative Director, proposes and formulates business plans based on the Midterm Management Policy passed by a resolution in the Board of Directors. Additionally, based on the business plans passed through resolutions of the Board of Directors, this body holds debates concerning business progress management and future business plans, and holds deliberation and resolutions regrading important matters related to operations enforcement.
Our system calls for Executive Officers to have the responsibility for and authority to conduct operations enforcement, with the goal of accelerating management decision-making and action.
Director candidate appointment
We appoint individuals as Director candidates from the viewpoints of: (1) possessing the appropriate knowledge, experience, and skills, (2) possessing the ability to contribute to increasing the NDK corporate value, and (3) ensuring diversity in the Board of Directors. Furthermore, regarding the appointment of candidates for External Directors, we strive to select candidates who, in addition to the above, fulfill the independence standards of the Tokyo Stock Exchange.
The Representative Director reviews the candidate, the Independent Advisory Committee chaired by an Independent External Director gives advice concerning the candidate, and the Board of Directors makes the final decision, taking that advice into consideration.
Director Skill Matrix
As seen in the NDK management philosophies of, "NDK provides high-quality service to customers while staying ahead of the marketplace," and, "NDK is enhancing each individual's character through work," the NDK founder had the firm conviction that, "products are a reflection of the person who makes them." And as such, NDK employees and executives are expected to pursue a path that places quality as the top priority in products and services. The following NDK Director Skill Matrix is a reflection of that belief.
Remuneration for Directors
At the March 25, 2021 Board of Directors meeting, the following basic policy concerning the setting of Director remuneration was passed through a Board resolution.
(1) Basic policy
Remuneration for Directors are performance based so as to function as a healthy incentive for sustainable growth. In determining individual remuneration amounts, the basic policy will be to employ appropriate standards that take into account the individual duty responsibilities. Specifically, remuneration for the Director who serves simultaneously as both the Representative Director and an Executive Officer is composed of fixed remuneration as the basic remuneration with performance-based remuneration added. Remuneration for External Directors is composed only of basic remuneration that reflects their duties.
(2) Policy concerning the setting of individual amounts for basic remuneration, etc.
Basic remuneration is a fixed monthly remuneration. It reflects factors including attributes, position, and job responsibilities. It is set with comprehensive consideration to factors including the standards of other companies, the standards of salaries to employees, and the business climate. The amount is set by the Board of Directors in consideration of advice offered by the Independent Advisory Committee, of which Independent External Directors are a major component.
(3) Performance-based remuneration components and policy concerning amount determination
Performance-based remuneration is a cash remuneration that reflects performance indexes for raising incentive to increase performance each fiscal year. It is paid during a set period annually as a bonus. The amount is determined by the Board of Directors, considering advice from the Independent Advisory Committee and taking into account the level of individual contribution and the success ratio for the consolidated operating profit target amount for each fiscal year according to a calculation result based on the calculation formula pursuant to factors including the coefficient passed through a resolution of the Board of Directors.
(4) Policy concerning the setting of non-monetary remuneration
Currently, in consideration of the NDK business climate, etc., we do not issue non-monetary remuneration.
(5) The ratio of basic to performance-based remuneration
See below for the general standard concerning the ratio of basic and performance-based remunerations assuming 100% was attained for the target amount of consolidated operating profit for the final fiscal year in the midterm management policy (the fiscal year ending in March 2023).
|Executive position||Basic remuneration||Performance-based remuneration|
|Director serving simultaneously as both
Representative Director and Executive Officer
Internal Control Frameworks
1．Frameworks that ensure compliance with laws, regulations, and the Articles of Incorporation for the enforcement of Director and staff duties
2．Frameworks concerning the retention and management of information regarding the enforcement of Director duties
3．Rules for managing the danger of loss and other frameworks
4．Frameworks to ensure enforcement of Director duties is conducted efficiently
5．Frameworks for ensuring appropriate operations in related joint-stock companies and the corporate conglomerates made up of their parent companies and subsidiaries
6．Frameworks for staff when an Auditor requests staff to assist in those duties, and
frameworks concerning the ensuring independency of the staff member and the effectiveness of directions from the Director to the staff
When an Auditor needs staff to assist in Auditor duties, an Auditor Assistant (staff) is placed under that Auditor. To ensure the independence of that staff and the effectiveness of directions to that staff, the Standing Auditor must issue prior authorization concerning decisions on human resources related matters such as appointment, transfer, etc. Additionally, performance reviews are designated as being conducted by the Standing Auditor.
7．Frameworks for Directors and staff members to report to Auditors, and frameworks for other reports to Auditors
8．Other frameworks for ensuring the effectiveness of audits by Auditors