Corporate Governance

The NICHINO Group aims to be a corporate group that is trusted by various stakeholders such as shareholders, customers, employees, business partners and local communities. From the perspective of promoting sustainable growth and enhancing corporate value over the medium to long term, we always strive for the best corporate governance based on the following fundamental principles.

Corporate Governance Structure and Initiatives

Nihon Nohyaku has adopted the form of a company with an Audit and Supervisory Committee. The purpose is to strengthen the supervisory function of the Board of Directors and enhance corporate governance by appointing Audit and Supervisory Committee members, who are responsible for auditing the execution of duties by Directors, as members of the Board of Directors.
In addition, the Governance Committee (members: 8 as of June 18, 2025), 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 from the Board—on the appropriateness of the process for appointing/dismissing candidates for Director of Nihon Nohyaku, their qualifications and reasons for appointment, evaluations of the effectiveness of the entire Board of Directors, and the officer remuneration system.

• Please refer to our Annual Securities Report for details.(Japanese)

Main Matters of Deliberation by the Board of Directors (FY2024)

In FY2024, the Board of Directors carefully deliberated on important matters directly linked to enhancing corporate value to ensure the soundness and transparency of management. Regarding approval of the fiscal year-end financial statements and the matters to be submitted to the General Meeting of Shareholders, the Board held discussions emphasizing dialogue with shareholders with regard to business performance summary, dividend policy, and management policy. Regarding its review of the executive structure, the Board of Directors approved personnel changes designed to make Outside Directors comprise the majority of the Board, thus enhancing the diversity and independence of management. Concerning risk management, the Board considered the renewal of the directors and officers liability insurance, as well as environmental measures for, and the sale of, owned real estate. Regarding the remuneration system, the Board approved the continuation of the stock-based remuneration plan to ensure transparency and the consistency of incentives. The Board also approved the guarantee of debts of overseas subsidiaries, strengthening the Group’s financial base for global expansion.

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. Efforts are made to continuously improve issues identified based on the content of the reports.

• Please refer to our Corporate Governance Report for details.(Japanese) (PDF: 377KB)

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.
The ratio of type of remuneration for Executive Directors shall be determined in consideration of factors including the long-term R&D-based business characteristics of Nihon Nohyaku, the Director’s position, duties, standards at other companies, and social trends. The ratio between basic remuneration, bonuses and performance-linked stock-based remuneration during the period to which a medium-term management plan applies will be about 8:1:1.

Succession Plan

We promote human capital development and succession planning across the Group to strengthen our global management structure. Aiming to cultivate and pass on human capital to support sustainable growth, we established the Human Capital Development
Committee in 2023, composed of division managers and above, and have begun visualizing and systematically developing the next generation of potential senior
managers. We define potential senior managers (general managers of Nihon Nohyaku and executives of Group companies) as Talent Pool 1 (TP1) and next-generation potential senior managers (chief managers and Group company department general managers) as Talent Pool 2 (TP2). For TP2, we progressively plan and implement development programs through meetings that include overseas Group companies. We also promote talent exchange from a global perspective, coordinating among candidates while also considering potential future department general managers and female managerial candidates. Regarding the promotion from TP1 to top management positions, we select executive officers based on a comprehensive perspective. In addition to the skills matrix presented in the Notice of the General Meeting of Shareholders, we also consider candidates’ legal compliance, sense of mission, leadership, resilience, strategic thinking, and crisis management abilities.

Corporate Governance Guidelines of Nihon Nohyaku Co., Ltd.

• Please refer to the Corporate Governance Guidelines of Nihon Nohyaku Co., Ltd. for details.

Enhancing and Strengthening Internal Control Systems

 At Nihon Nohyaku, the Audit and Supervisory Committee exercises management evaluation authority in order to enhance the checking function of the governance structure in two ways. One, by checking the legality and validity of the execution of business by NICHINO Group, and two, by the right to state opinions regarding the appointment of Directors who are not Audit and Supervisory Committee members.
The Internal Control & Audit Department conducts internal audits based on the internal audit plan set forth each fiscal year to promote the improvement of operations. Moreover, they exchange information and hold meetings in a timely and appropriate manner so that each audit, including accounting audits by auditing firms, functions efficiently and effectively.