Analysis and evaluation of the effectiveness of the Board of Directors
Issues identified by the FY2021 Board effectiveness assessment and initiatives for FY2022
| Issues that required stronger initiatives in FY2022 | Main initiatives in FY2022 |
|---|---|
| 1) Enrichment of discussion on growth strategy Further increase opportunities for strategic discussions and enable the Board of Directors to concentrate more on discussions about growth |
For growth strategy discussions at meetings, the Board of Directors spent more time discussing medium to long-term management strategies from a broad perspective. These discussions cover strategies for the growth of existing businesses, portfolio expansion and other goals. In addition, the Board of Directors created and improved an environment for concentrating on growth strategy discussions, such as brainstorming and offsite meetings. |
| 2) Improvement of the operational efficiency of Board meetings Minimize time spent on regular agenda items and other regular proceedings; focus on discussions that truly contribute to the achievement of MSV |
Due to progress involving Asset Assembler model, the agenda items and reports submitted by Co-Presidents and other executives are becoming even more complex. In response, the operation of the Board of Directors has become even more thorough in accordance with the monitoring model. In addition, the Board of Directors has made progress with establishing a proper framework that reflects the Group’s management structure and business model reforms. The Board of Directors is using highly detailed agenda building, the early preparation of annual plans, reexaminations of standards for agenda items at Board meetings and other measures to operate more efficiently |
| 3) Further contribution of Independent Directors Improve the contribution of every Independent Director by having these Directors submit more constructive questions to challenge the management team |
Adding the fresh perspectives of two non-Japanese Independent Directors with a broad range of experience and professional skills enables the Board of Directors to hold discussions that incorporate many viewpoints. This diversity is helping the Board properly perform its supervisory and advisory roles. Furthermore, regular meetings of the Independent Directors and the use of IT for close communications that do not require meetings make possible the efficient sharing of information and opinions between the Independent Directors, who have knowledge in many areas. These activities enabled the Directors to conduct rigorous discussions and reach proper decisions for achieving MSV. |
| 4) Enhancement of the functions of The Secretariat of Board of Directors Strengthen support functions for Directors to facilitate more thorough strategic discussions, and provide for secretariat functions that reflect the global scale of the Group operations |
The Board of Directors ensured that all materials and minutes of the Board’s meetings are available in both Japanese and English for the efficient and accurate provision of information. In addition, we revamped Board materials to enable a more accurate understanding of key points of agenda items and are distributing Board materials faster by strengthening cooperation with drafting departments. The Board of Directors increased the digital transformation of Board meetings and perform information sharing in a secure environment in a timely and appropriate manner. |
Evaluation for FY2022 and issues for FY2023
- Guidelines for making evaluations
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Evaluation target
All Directors in FY2022: 11
Managing Executive Officer, General Counsel (GC): 1Method
By placing emphasis on the continuity of evaluations following the change in the Board’s composition, a third-party organization, Board Advisors Japan, Inc. (BAJ), was selected. A questionnaire and individual interviews were used.
Questions
- Status of progress with resolving issues identified in the FY2021 Effectiveness Assessment of the Board of Directors
- Issues for the Board of Directors and committees following the change in the Board’s composition
Evaluation process
- Distribute questionnaires to Directors
- Conduct a separate interview with each Director based on the results of the questionnaire
- Summarize and analyze the results of questionnaires and individual interviews
- Report and discuss the effectiveness evaluation at the Board of Directors meetings
- Overview of evaluation outcome
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Based on the following evaluation by the BAJ and the Board of Directors discussion that followed, the Board of Directors has concluded that the Board was generally effective in FY2022.
Summary of BAJ’s assessment
- The Board of Directors has a common understanding about its role and everyone is committed to the policy of pursuing MSV.
- The Board’s composition with Independent Directors comprising the majority allows the Board to perform oversight over the management team from an objective perspective.
- Led by the Board Chair, the Directors are discussing important agenda items, such as medium to long-term management strategies.
- All Directors engage in active discussions by leveraging their knowledge from the perspective of supporting the management team.
- Issues requiring stronger initiatives in FY2023
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- Upgrading operation of the Board of Directors
Upgrade the quality of the Board’s discussions by holding meetings more efficiently in order to increase the percentage of time spend on agenda items involving strategies - Contributions of Independent Directors
Further increase the contributions of Independent Directors by raising their awareness of various issues and enabling them to submit more constructive questions that challenge the management team - Engagement in succession planning
Systematically discuss succession plans for the management team and Independent Directors and consider the optimal Board composition
- Upgrading operation of the Board of Directors