Basic Policy

Guided by our Corporate Phylosophy, we at Kaneka aim to achieve sustainable growth and improve corporate value in the medium to long term. As good citizens, we will conduct our business activities while respecting all stakeholders.

Diagram of Corporate Governance System

Diagram of Corporate Governance System

* Since FY 2018 when Kaneka launched the ESG management initiatives, the term “CSR” we conventionally used has been replaced by “ESG.”

Please see here for the Board of Directors (401KB)

Corporate Governance Structure

Organizational Design

We currently have two independent external directors and two independent external auditors. Since both the overseeing of business operations by the Board of Directors and auditing by the Board of Auditors are functioning well, Kaneka has chosen to be a Company with Board of Auditors under the Companies Act.

Directors and the Board of Directors

The Board of Directors, on behalf of the shareholders, seeks to ensure efficient and effective corporate governance in order to realize the company’s sustainable growth and increase corporate value in the medium to long term. The Board of Directors exercises its oversight functions on overall management to ensure fairness and transparency, as well as to appoint management positions, evaluate and determine remuneration, evaluate serious risks and determine strategies to counter them, and make the best decisions on important business operations. The Board of Directors makes resolutions on important matters related to the management of the Kaneka Group after deliberation by the Management Committee, which includes the president. There are at most 13 members on the Board of Directors. Of these, two are independent external directors to strengthen the oversight function. Directors serve for a period of one year to clearly define management responsibilities.

Auditors and the Board of Auditors

Auditors and the Board of Auditors, on behalf of the shareholders, seek to ensure healthy and sustainable corporate growth and to establish a structure with good corporate governance that can gain social trust by checking on the performance of directors in regard to their duties. The Board of Auditors comprises four members, two of whom are independent external auditors in principle, and performs audits in coordination with the Accounting Auditor and the ESG Department Internal Control Division’s. Auditors are given space to periodically exchange views with the president, and monitor the state of business operations when necessary, by attending key meetings of the Board of Directors and those of the Management Committee, which decides on the implementation of important matters, as well as division head meetings.

Ad Hoc Committees

Independent external directors meetings are held, and an appointment and remuneration advisory committee will be created as an ad hoc committee.

Implementation of Business Operations

Kaneka has adopted the executive officer system to separate the oversight function of directors from the implementation function of business operations, which also facilitates decision-making and clearly defines roles. The Board of Directors decides on key management strategies and business operations of the entire Kaneka Group, while executive officers handle business operations in their respective areas of responsibility. While division heads, including executive officers appointed by the Board of Directors, are given extensive authority over daily business execution, directors are responsible for specific divisions and oversee the business execution in their respective divisions. Monthly division head meetings are held to enable the directors and auditors to directly hear progress reports from each division head. The Internal Control Division of the ESG Department evaluates the effectiveness of internal control and conducts an internal audit.

Standards for Independence of External Directors/Audit & Supervisory Board Members

We have defined the Standards for Independence of External Directors/Audit & Supervisory Board Members to guarantee the independence of independent external directors and auditors in practice. The standards are disclosed in our corporate governance report, etc.

Selection Criteria for Directors

At Kaneka, directors are selected by the Board of Directors, on the basis of character, judgment, expertise and experience as well as ethics without limitations on gender, age, nationality and other attributes, after deliberation by the Appointment and Remuneration Advisory Committee, which is comprised of representative directors and independent external directors.

Analysis and Evaluation of Effectiveness of the Board of Directors

Kaneka regularly implements an analysis and evaluation of the effectiveness of the Board of Directors, and discloses a summary of the evaluation results. Specifically, the Chair of Board of Directors periodically receives reports from the Independent External Director’s Meeting and opinions from the internal directors. Based on these reports, the current status of operations of the Board is evaluated. In this fiscal year’s evaluation process, the Independent External Director’s Meeting held discussions focusing on the operation of the Board of Directors (number of meetings held, frequency, length, contents of information provided beforehand, contents of agendas, deliberations, etc.), role of external directors, and risk management. Based on the discussion results, the Board of Directors conducted a self-evaluation. As a result, it has been confirmed that the Board of Directors functions effectively in making decisions on important matters for the Group such as risk management and supervising business execution. We will continue to enhance the effectiveness of our Board of Directors through effectiveness evaluations.

Our Efforts to Strengthen the Governance Capacity

2006
  • Introduced the executive officer system
  • Changed the number of directors from 21 to 13
  • Formulated the Basic Policy on Internal Control System
2011
  • Appointed an outside director
2013
  • Formulated the Criteria for Independence of Outside Directors
2015
  • Increased the number of outside directors from 1 to 2
  • Formulated the Basic Policy on Corporate Governance
  • Established the Appointment and Remuneration Advisory Committee
  • Established the Independent Outside Officers Meeting
2016
  • Commenced the effectiveness evaluation on the Board of Directors

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