Election and dismissal of Directors and Executive Officers

Nominating Directors and election and dismissal of Executive Officers

Directors are elected at the General Meetings of Shareholders based on nominations of the Nominating Committee. We, in order to secure the effectiveness of the Board of Directors, have adopted a policy of nominating candidate Directors with diverse experiences, achievements, high levels of insight, high levels of expertise, etc., regardless of nationality or gender, whether from Japan or overseas, or from within or outside the Group, in the Nominating Committee, whose majority members are Independent Directors.
Executive Officers are elected by resolution of the Board of Directors. The policy for the elected and dismissal of Executive Officers at our Company is as follows.

Nomination of Directors

Corporate Governance Policies
Article 20 (Director of the Board Appointment and Qualification Standards)

1. The Company, in order to secure the effectiveness of the Board of Directors, has adopted the policy of nominating candidate Directors of the Board with diverse experience, achievements, high levels of insight, and high levels of expertise, etc., regardless of nationality, gender, whether from Japan or overseas, or from within or outside the Group, etc.

2. The Company nominates personnel that meet the following as candidate Directors of the Board.

   (1) Directors of the Board have the qualifications to appropriately perform their duty of loyalty and duty of care, and to contribute to the sustainable growth of the Group and MSV in the medium to long term.

   (2) Outside Directors of the Board, in addition to (1) above, have high levels of insight and extensive experience in the fields of corporate management, accounting, and legal affairs, etc., have qualifications to monitor the execution of business of Executive Officers from an independent and objective perspective as a general rule, and in addition, meet the “Independence Criteria for Outside Director of the Board” (Annex 3) prescribed by the Board of Directors.

   (3) Directors of the Board concurrently serving as Executive Officer, in addition to (1) above, have the abilities required to be conversant with the business of the Group and for the appropriate execution of the business management of the Group.

3. As a general rule, the number of times that an Outside Director may be nominated as a candidate is four (a total of four years), and if the prior consent of a majority of Directors of the Board has been obtained, this may be up to a maximum of eight times (a total of eight years).

Executive Officers election policies

Corporate Governance Policies
Article 31 (Policies and Procedures for the Election and Dismissal of Executive Officers)

1. The Company shall use the following as criteria for the election of the Executive Officers and the appointment of the Representative Executive Officers.

   (Executive Officer)

   A person who has the diverse experience, performance, high level of insight, and high level of expertise, etc., worthy of the Executive Officer, who will contribute to the achievement of the sustainable growth and MSV in the medium to long term of the Group, regardless of nationality, gender, whether from Japan or overseas, or from within or outside the Group.

   (Representative Executive Officer)

   A person who has a wealth of experience and achievements in corporate management, who will demonstrate high levels of ability worthy of the Representative Executive Officer and President and will contribute to the achievement of the sustainable growth and MSV in the medium to long term of the Group.

2. The Board of Directors, pursuant to the policies of the preceding Paragraph, and based on the deliberations and reports of the Nominating Committee, shall elect and dismiss Executive Officers, and shall appoint and remove the Representative Executive Officers.

3. The Board of Directors, in the case of an Executive Officer or Representative Executive Officer and President falling applicable under any of the following and being able to objectively determine that removal or dismissal would be appropriate, shall dismiss or remove him/her, upon sufficient deliberations at the Board of Directors, based on the reports of the Nominating Committee.

   (1) In the event of having violated a law or ordinance or the Articles of Incorporation, etc., and it being able to be recognized that significant damage has been caused to the shareholder value of the Group;

   (2) In the event of significant impediment having occurred to the execution of their duties;

   (3) In the event of it being realized that the requirements of the selection standards are not met.

Unearthing future management talent and development of growth environment

We recognize that strengthening our Group’s human capital is an important management issue in the face of globalization and drastic changes in the business environment. We do not recruit and develop future management personnel in a uniform manner. Based on mutual trust between Co-Presidents and the heads of each partner company group (PCG: Nippon Paint Group companies grouped by region or business), we are developing an environment for discovering and growing human resources based on respect for the autonomy of each PCG. This field-based human capital enhancement is appropriate for our company, which is oriented toward the “Asset Assembler” model, and we believe that it will greatly contribute to the realization of MSV. Based on this policy, the Group’s key management talent are identified as GKPs, who are entrusted with formulating and executing succession plans for the senior management of each PCG, monitored and assessed by the Co-Presidents, thereby strengthening the Group’s human capital. Under the leadership of the Co-Presidents, our Group continuously seeks future management talent, both in and outside the Group, while at the same time creating an environment in which such talent can fully exert their potential and growth. Twice a year, the Co-Presidents report their approaches to and assessment of respective GKPs to the joint Nominating and Compensation Committees to conduct an open discussion on the Group’s human capital. In addition, the Nominating Committee also focuses on direct communication with each GKP. These efforts lead to properly assessing and recognizing the performance of Co-Presidents as leaders in our Group, and provide the basis for the succession and appointment/dismissal of an appropriate future Representative Executive Officer & President of the Company. Based on this policy by the Board of Directors and Nominating Committee, we are “always on” the identification of future management personnel, including our top management, and the strengthening of human capital by developing the growth environment to realize MSV and to achieve future leaps forward.