Basic concept regarding corporate governance
The SCREEN Group takes on improving corporate governance to pursue the transparency, soundness, efficiency in business management and aims to secure shareholders and other all stakeholders’ comprehensive benefits under Corporate Philosophy (“Sharing the Future”, “Human Resource Development”, and “the Pursuit of Technology”).
The Group recognizes it is necessary to make corporate governance effective to realize this aim and strengthens governance through establishing “Management Grand Design,” which is a vision of the SCREEN Group and a long-term management plan to realize such vision, “SCREEN Group CSR Charter,” which describes the principles of action for all executives and employees of the Group, “SCREEN Group Code of Management,” which regulates controlling policy and system of the Group companies, and other regulations which all executives and employees should comply with.
SCREEN Holdings takes the form of a company with a Board of Corporate Auditors. Now, it has a Board of Directors comprising 9 directors (includes 3 outside directors) and a Board of Corporate Auditors comprising 4 corporate auditors (includes 2 outside corporate auditors) as well as external accounting auditors. In addition, the Group adopts a holding company structure with split of main three-business into each Business Operating Company to enable tactical and firm business execution. The Holding company establishes/determines basic policies and basic strategy for the Group management and has a function to oversee the business execution of each company so that it clarifies functional segregation of business execution and oversight.
>>Duty of a Board of Directors
-The Board establishes/determines basic policies and basic strategy for the Group management and important matters in business execution, as well as oversees business execution, holding regular monthly meetings and additional meetings as necessary.
-It selects one-third of outside directors in the Board of Directors with the aim of functional enhancement of management oversight and the maintenance of management objectivity. Outside directors are selected following SCREEN Holding’s “Criteria for Independence of Outside Directors and Outside Corporate Auditors”
-It ensures the effectiveness of the Board of Directors through its overall analysis and evaluation based on a questionnaire to all Directors and Auditors or other methods and enhances its function.
>>Duty of directors and their appointment/ compensation
-Duty of directors is “to recognize their fiduciary responsibility to shareholders and assumes the responsibility of sustainably enhancing the SCREEN Group’s corporate value.
-Regarding nomination of candidates for a director, candidates are selected following SCREEN Holding’s “Criteria for Appointing Candidates for Directors” and decided by the Board of Directors through a request for advisory to and recommendation from Nomination and Compensation Advisory Committee, which comprises representative directors and outside directors.
-Directors’ compensation consists of three elements: (i) fixed remuneration, (ii) stock allowances which make them conscious of medium-term and long-term performance and stock price for the purchase of the stocks and (iii) a performance-based bonus (decided based on the degree to which annual performance targets are achieved). Now it does not introduce stock option. Outside directors’ compensation does not include stock allowances.
-Board of Directors decides directors’ compensation within the range of total amount of all directors’ compensation approved in the shareholders meeting, through a request for advisory to and recommendation from Nomination and Compensation Advisory Committee.
>>Corporate auditors and a Board of Corporate Auditors
-Corporate auditors and a Board of Corporate Auditors recognizes their fiduciary responsibility to the shareholders, legally monitors business execution of directors from the independent objective standpoint as well as oversights in light of appropriateness by daily auditing.
-The Board of Corporate Auditors holds two regular meetings per month and additional meetings as necessary.
-Regarding nomination of candidates for a corporate auditor, candidates are selected following SCREEN Holding’s “Criteria for Appointing Candidates for Corporate Auditors” and decided by the Board of Directors through a request for advisory to and recommendation from Nomination and Compensation Advisory Committee as well as upon obtaining agreement of the Board of Corporate Auditors.
-Outside directors are selected following SCREEN Holding’s “Criteria for Independence of Outside Directors and Outside Corporate Auditors”
>> Corporate officer system
The Group introduces corporate officer system in order to accelerate business execution and clarify responsibility. Corporate officers do effective execution following basic policy and basic strategy decided by the Board.
>>The Management Committee
The Management Committee, comprising the full-time directors and corporate officers, and as necessary, presidents of Business Operating and Functional Support Companies meets twice a month to deliberate matters related to management and facilitate the decision making of the Board of Directors and the representative directors.
>>Constructive engagement with shareholders and other stakeholders
■Corporate Governance Structure