In the nomination and appointment of candidates for Directors, Audit & Supervisory Board Members and executive officers, OKI considers the following matters in addition to meeting legal requirements.
The criteria for submitting a proposal to dismiss a Director, an Audit & Supervisory Board Member, or an executive ofﬁcer take into consideration the following: where the person's act violates or infringes on the law and the Articles of Incorporation; whether the person has become unable to properly perform his/her duties. Such proposals are immediately deliberated by the Personnel Affairs and Compensation Advisory Committee, which then submits its proposal to the Board of Directors.
|Name||Reasons for Appointment||Status of Attendance at meeting of the Board of Directors or the meetings of the Audit & Supervisory Board (FY2019)|
|Outside Directors||Shigeru Asaba||As Ph.D. of Economics, he specializes in industrial organization, corporate strategy, competitive strategy, ownership structure and strategy, and family business, and possesses academic expertise and high ethical standards in general business. In addition, through his experience as an outside director at Nippon Beet Sugar Manufacturing Co., Ltd., the Company has determined that he is able to appropriately supervise management and strengthen decision-making functions. Therefore, the Company has appointed him as an Outside Director.||Board of Directors 14/14 (100%)|
|Tamotsu Saito||He has served as chairman of the Board of IHI Corporation for many years and has a wealth of experience as a business leader not only in the industry but also in Japan. The Company has determined that he is able to provide appropriate oversight of management as well as appropriate opinions and advices from both a business management perspective and a compliance perspective, and therefore has appointed him as an Outside Director.||Board of Directors 14/14 (100%)|
|Izumi Kawashima||She is currently a professor on the Faculty of Social Sciences at Waseda University and specializes in commercial law (particularly the Companies Act) and the Financial Instruments and Exchange Act. She is one of Japan's leading experts in this field. The Company believes that it can expect her accurate opinions and advice based on her academic expertise related to the Companies Act and corporate governance, in particular. Therefore, the Company has appointed her as an Outside Director.||Board of Directors 14/14 (100%)|
|Makoto Kigawa||Based on his extensive experience as Representative Director of Yamato Holdings Co., Ltd. after serving as an executive at a financial institution, the Company has judged that he is able to provide appropriate supervision over business management.
In addition, the Company considers that it can expect accurate opinions and advice from both the business management and the compliance perspectives, and has appointed him as an Outside Director.
|Board of Directors 9/10 (90%)|
|Outside Audit & Supervisory Board Members||Hideo Shiwa||He has headed the finance & accounting and planning divisions and presided over the head office department of a manufacturing company before serving as Director and Senior Managing Executive Office and completing overseas assignments. Utilizing his abundant experience, insight and high ethical standards, the Company believes that it can expect him performing appropriate auditing on the management of the Company, and therefore has appointed him as an Outside Audit & Supervisory Board Member.||—|
|Ryuichi Makino||As a certified public accountant, he has been engaged in accounting audit of manufacturers and other businesses in a wide range of industries for many years. He also has extensive knowledge in internal control. Utilizing his abundant experience, insight and high ethical standards, the Company believes that it can expect him performing auditing on the management of the Company in an objective, neutral manner, and therefore has appointed him as an Outside Audit & Supervisory Board Member.||—|
OKI has established independence standards for the appointment of Outside Directors and Outside Audit & Supervisory Board Members (together, "Outside Officers"), and places importance on independence based on these standards when considering candidates.
Independence Standards for Appointment of Outside Officers
The Company appoints Outside Directors and Outside Audit & Supervisory Board Members based on the following criteria.
a. People listed in (2) to (7) above (limited to important executives(*2) for "executives" in (2) to (5), (2) for "people belonging to associations" in (6), important executives and people whose associations have professional qualifications such as certified public accountants or lawyers in the case of accounting or legal expert associations such as audit firms or legal firms, and people who have professional qualifications such as certified public accountants and certified public accountants for "people belonging to audit firms" in (7).
b. An important executive of the OKI Group
c. A person falling under category b above in the past 10 years
Four Outside Directors and two Outside Audit & Supervisory Board Members, appointed based on the above policy, have been judged to have no risk of conflict of interest with general shareholders, and thus have been reported as independent officers to the Tokyo Stock Exchange.
In order to secure transparency and objectiveness in the decision-making processes concerning compensation for officers, the Personnel Affairs and Compensation Advisory Committee deliberates on the structure and level of compensation for directors and executive officers from an objective viewpoint, and reports the results to the Board of Directors.
OKI's basic policy on compensation for directors and executive officers is to serve as incentives for the performance improvement with the aim of the continuous enhancement of the corporate value and the corporate competitiveness while being the compensation structure that can attract excellent human resources.
The compensation system consists of basic compensation, annual incentive compensation linked to the performance of each fiscal year, and compensation-type stock option as medium- to long-term incentive compensation. These changes have been implemented as part of efforts to develop an environment for a shift to the management focused on "more aggressive goal setting" and "growth over medium- to long-term" in order to achieve "continuous growth" of the OKI Group.
|Type||Content of Compensation|
|Basic compensation||When serving as executive officer concurrently, monetary compensation shall be paid, determined individually tailored to position, followed by duties.|
|Monetary compensation shall be paid, determined individually with a linkage with the past fiscal year's consolidated business performance of the OKI Group and that of the division each director/executive officer is responsible for. The amount of payments is 35% of the basic compensation in case that the rate of payments is 100%. The rate of payments is determined within the scope of 0% to 200%, according to a linkage with business performance and the President's qualitative assessment.|
|Medium- to long-term incentive compensation||Compensation-type stock option shall be granted, around 13% of basic compensation amount, in the view of value sharing with shareholders and the enhancement of corporate value as well as shareholders' value over the medium- to long-term.|
Compensation for outside directors consists only of basic compensation. In addition, the appropriateness of the structure and level of compensation is validated utilizing objective evaluation data from external organizations and others.
The compensation paid to Directors and Audit & Supervisory Board Members in FY2019 is as follows;
|Title||Amount of payment
|Amount of payment by compensation type (million yen)||Number of applicable officers|
|Basic compensation||Annual incentive compensation||Medium- to long-term incentive compensation|
(excluding Outside Directors)
|Audit & Supervisory Board Members
(excluding Outside Audit & Supervisory Board Members)
|Outside Audit & Supervisory Board Members||14||14||—||—||2|