Governance

The Group will establish effective governance frameworks to ensure the transparency, objectivity, and fairness of the management of the companies and earn society’s trust everywhere it operates. The Board of Directors recognizes fiduciary responsibilities to all stakeholders, including shareholders and investors, and supervises the Group’s overall management by taking responsibility for the Company’s sustainable growth and maximization of mid- to long-term shareholder value (MSV) through the appropriate exercise its authority.

Effectiveness evaluation (for previous years)

To bolster the efficacy of our Board of Directors and pursue the sustainable Maximization of Shareholder Value, we conduct a comprehensive evaluation of the Board’s performance. In 2023, under the leadership of the Board Chair and the Nomination Committee Chairperson, we facilitated discussions during Board meetings, evaluating effectiveness through surveys distributed to all Directors and Executive Officers. Additionally, we remain committed to ongoing improvement, actively addressing any issues surfaced during the evaluation process throughout the year. Moving forward, we remain open to third-party evaluations should they be deemed necessary.

Effectiveness evaluation 2020-2023

FY2020 Issues to strengthen efforts on
  1. Strengthen functions of nomination and remuneration including supervision of succession planning and establishment of a transparent, objective and competitive remuneration structure
  2. Leverage investor feedback
  3. Strengthen delegation of authority to establish a monitoring model
  4. Reinforce supervision and deepen discussion on the Medium-Term Plan
  5. Broaden and deepen discussions on important agendas such as strategy and capital policy
  6. Enhance the audit function
Main initiatives
  1. Formulate Remuneration Philosophy and strengthen the monitoring of the Representative Executive Officer and communication with the business execution
  2. Deepen discussions including those from the perspective of investors, based on information obtained from the business execution
  3. Delegate a substantial authority to the business execution
  4. Expand and enhance supervision and discussion on the progress in the formulation of the Medium-Term Plan
  5. Broaden and deepen strategic discussions and achieve the acquisition of 100% ownership of the Asian JVs
  6. Strengthen the Audit on Audit system based on the characteristics of our operating regions
FY2021 Issues to strengthen efforts on
  1. Upgrading the monitoring model
  2. Enhancement of discussion of important agenda items
  3. Further reinforcement of audit
  4. Reinforcement of nominating function
Main initiatives
  1. Increased separation of execution and supervision and established a system that enables the fulfillment of both roles
  2. For M&A projects, supported the implementation of growth strategies through appropriate risk-taking by executive departments
  3. Established the auditing system for each partner company that seeks to grow autonomously under the Co-President structure
  4. Transitioned to the Co-President structure through a speedy and smooth Presidential succession
FY2022 Issues to strengthen efforts on
  1. Enrichment of discussion on growth strategy
  2. Improvement of the operational efficiency of Board meetings
  3. Further contribution of Independent Directors
  4. Enhancement of the functions of The Secretariat of Board of Directors
Main initiatives
  1. Spent more time discussing medium to long-term management strategies from a broad perspective
    Created and improved an environment for concentrating on growth strategy discussions, such as brainstorming
  2. Through implementation of the Board of Directors operations based on the monitoring model
    Early preparation of annual plans and reexaminations of standards for agenda items at Board meetings
  3. Addition of two non-Japanese Independent Directors to the Board members helped incorporate different viewpoints in the Board discussions
  4. Enhanced efficiency and accuracy of information sharing by distributing Board materials early, changing the format, and providing versions in both Japanese and English
FY2023 Issues to strengthen efforts on
  1. Upgrading operation of the Board of Directors
  2. Contribution of Independent Directors
  3. Engagement in succession planning
Main initiatives
  1. Establishing an annual plan with carefully selected agenda items for improved quality of Board of Directors’ discussions, enabling increased focus on medium- and long-term strategy along with other priority topics
  2. Improving the quality of the Board of Directors’ discussions and decision-making by regularly convening the Meeting of the Independent Directors, thus fostering increased information sharing and exchanges of opinions among Directors even outside of meetings.
  3. Regular monitoring of the Group’s human capital enhancement by the Co-Presidents

Operation of the Board of Directors meetings

2020*1
2021*2
2022*3
2023*4
Agenda items of Board of Directors meetings (number of items)
2020*1
175 items
2021*2
125 items
2022*3
73 items
2023*4
70 items
"Board of Directors meetings (number of meetings)
2020*1
16 meetings
2021*2
23 meetings
2022*3
12 meetings
2023*4
9 meetings
Board of Directors meetings (total hours)
2020*1
3,985 hours
2021*2
2,789 hours
2022*3
1,385 hours
2023*4
1,445 hours
  • NPHD transitioned to a Company with Three Committees in 2020, completed the full integration of the Asian JVs and the acquisition of the Indonesia business in January 2021, and adopted the Co-President structure in April 2021. During these past two years, the Board's most urgent task was to establish a framework to respond to the transformation of the Group's management structure and business model. As a result, the number of agenda items increased temporarily.
  • In 2021, the number of Board of Directors meetings increased due to extraordinary meetings held to discuss several M&A deals.
  • In 2022, the number of meetings and agenda items returned to near normal levels following progress with the structural transformation.
  • In 2023, the number of Board of Directors meetings was reduced by distributing agenda items throughout the year, which allowed for extended deliberation periods during each meeting.

*1 April 2020 to March 2021 / *2 April 2021 to March 2022 / *3 April 2022 to March 2023 / *4 April 2023 to March 2024

Transition of growth strategy discussions

2020*1 2021*2 2022*3 2023*4
Types of growth strategies discussed at Board of Directors meetings (ratio of agenda items)

Strategies for existing businesses…57%
Medium to long-term management strategy…11%
M&A…32%

Strategies for existing businesses…13%
Medium to long-term management strategy…9%
M&A…78%

Strategies for existing businesses…10%
Medium to long-term management strategy…40%
M&A…50%

Strategies for existing businesses…13%
Medium to long-term management strategy…31%
M&A…56%
Ratio of meetings, including Board of Directors meetings, meetings of the Independent Directors, and offsite meetings (ratio of meetings held)

Board of Directors meetings…62%
Meetings of the Independent Directors…33%
Offsite meetings, study sessions, etc.…5%

Board of Directors meetings…81%
Meetings of the Independent Directors…9%
Offsite meetings, study sessions, etc.…10%

Board of Directors meetings…44%
Meetings of the Independent Directors…34%
Offsite meetings, study sessions, etc.…22%

Board of Directors meetings…38%
Meetings of the Independent Directors…33%
Offsite meetings, study sessions, etc.…29%
Growth strategy discussions Focus on strategies for the growth of existing businesses
The Board of Directors mainly discussed strategies for the growth of existing businesses to lay the groundwork for formulating Medium-Term Plan (FY2021-2023)
Laser-focus on discussions about important agenda items, such as M&A
Following the shift to autonomous and decentralized management, the number of M&A deals conducted mainly by Partner Company Groups (PCG*5) increased.
More thorough growth strategy discussions
More and better offsite meetings and other occasions for discussions and more thorough discussions using a broad perspective about medium and long-term management strategies at Board of Directors meetings.
Enhanced focus on medium to long-term strategy
Developed our Medium-Term Strategy and deepened discussions focused on future growth opportunities, including M&A. Offsite meetings and study sessions are now well-integrated into our planning process.

*1 April 2020 to March 2021 / *2 April 2021 to March 2022 / *3 April 2022 to March 2023 / *4 April 2023 to March 2024 / *5 PCG: Group of partner companies organized by region or business


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