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Corporate GovernanceSustainability
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Corporate Governance

In order to earn the trust of all stakeholders including shareholders, customers, consumers, and society at large and to further improve corporate value, Nihon Nohyaku strives to enhance corporate governance by strengthening functions to enable quick and rational decision-making and by checking that business is managed properly in compliance with laws, regulations, and business ethics.

Corporate Governance Structure and Initiatives

Nihon Nohyaku changed from being a company with a Board of Corporate Auditors to a company with an Audit and Supervisory Committee upon approval in the 121st Ordinary General Meeting of Shareholders held on June 26, 2020. With the change, we have strengthened the supervisory function of the Board of Directors and are promoting enhancements to corporate governance.

On the Board of Directors, all important matters are decided after sufficient deliberations by Directors with their efforts to ensure efficient management, execution, and supervision. In addition, from the standpoint of management oversight, Audit and Supervisory Committee members attend meetings of the Board of Directors and exercise voting rights as Directors.

Management execution and supervision (monitoring) are separated; the Board of Directors and the Board of Executive Officers. Moreover, executive officer system has been put in place to expedite decision-making by management and raise the efficiency of business execution.

The Board of Executive Officers deliberates and decides on the direction of basic policy and important matters related to business execution in order to expedite and increase the efficiency of management execution and reports to the Board of Directors about the status of execution, as well as matters required for the promotion of business activities such as internal control, compliance, risk management, Responsible Care, and respect for human rights.

The Board of Directors conducts supervision (monitoring) of the business execution of the Board of Executive Officers and makes resolutions related to important management decisions, supervision of Directors and Executive Officers, convocation of the General Meeting of Shareholders, human resources, and important financial allocations.

The Governance Committee, where a majority of members are independent officers, has been established as an advisory body to the Board of Directors. The Governance Committee further enhances corporate governance by deliberating and reporting, upon a consultation request by the Board, on the appropriateness of the process for appointing/dismissing candidates for Director (excluding Audit and Supervisory Committee members) and candidates for Director who are Audit and Supervisory Committee members of Nihon Nohyaku, their qualifications and reasons for appointment, standards for  independence of officers, evaluations of the effectiveness of the entire Board of Directors, and the officer remuneration system.

We have also established the Compliance Committee and Risk Management Committee to promote internal controls effectively and the RC Promotion Committee to promote Responsible Care activities aimed at continual improvement as a chemical company related to “the environment, safety and health,” from research and development to production, sales, consumption, and disposal. Furthermore, we have established the Sustainability Committee, which is the supervisory organization of the three committees mentioned above, to indirectly support the activities of the three committees and address sustainability-related​ issues rest of the three committees. In order to ensure the appropriateness of operations at Group companies, Nihon Nohyaku and its Group companies have established regulations and systems, and we built an internal control system under the guidance of the Nihon Nohyaku Group Action Charter. In addition, responsible divisions of Nihon Nohyaku check the appropriateness of operations through monitoring audits of Group companies.

Analysis and Evaluation of the Effectiveness of the Board of Directors Overall

The Board of Directors conducts a questionnaire survey for Directors every year concerning the effectiveness of the entire Board of Directors. The Governance Committee is consulted regarding the results of analysis and evaluation of the effectiveness of the Board of Directors based on the results of this questionnaire survey, and efforts are made to continuously improve issues identified based on the reports received.

Initiatives to Strengthen Auditing

The Audit and Supervisory Committee is responsible for conducting audits to monitor the legal compliance and appropriateness of business execution by Nihon Nohyaku and its Group companies. Internal audits based on an internal audit plan proposed by the Internal Control & Audit Department are coordinated with accounting audits by auditing firms. Information is exchanged and meetings are held in a timely and appropriate manner so that the respective audits function efficiently and effectively. In recent years, audits by the Audit and Supervisory Committee and internal audits have been performed using a general check sheet to increase audit efficiency and reduce the burden on the departments being audited.

Policies on Determining Directors’ Remuneration

The policies on determining the contents of remuneration, etc. for individual Directors are determined by the Board of Directors after it receives opinions from the Governance Committee, which is a voluntary advisory body of the Board of Directors, on officers’ remuneration.

Policies and Procedures for Appointing Director Candidates

Nihon Nohyaku considers the diversity of Board of Directors members and selects candidates for Director (excluding Audit and Supervisory Committee members) from those who possess high ethical standards as well as personality, insight, ability and extensive experience.

Corporate Governance Guidelines of Nihon Nohyaku Co., Ltd.

Enhancing and Strengthening Internal Control Systems

At Nihon Nohyaku, the Audit and Supervisory Committee exercises management evaluation authority based on two ways, one by checking the legality and validity of the execution of business by Nihon Nohyaku and Group companies and the other by right to state opinions regarding the appointment of Directors who are not Audit and Supervisory Committee members, in order to enhance the checking function of the governance structure.