UACJ Assets
Corporate
Governance
Truly Concentrating on Manufacturing with the Aims of Increasing Corporate Value and Improving Management Systems
Basic Concept
The UACJ Group believes that corporate governance is the basic framework of corporate management that maintains relationships with its various stakeholders (concerned parties), such as shareholders, customers, suppliers, employees and local communities. It is our responsibility to continuously increase corporate value by developing and providing products, technologies and services that are useful for society; doing so while placing a priority on safety, and thereby contributing to our stakeholders as well. To achieve this, improving the functions of corporate governance and safeguarding sound and transparent operations are important issues.
Equally important are continuing measures that ensure proper disclosure of financial and management information, practicing strong corporate ethics and maintaining thorough compliance and risk management, which are achieved by strengthening the functions of the Board of Directors and the Board of Auditors.
Governance Organization
Governance System
UACJ has introduced an “Executive Officer” system that divides functions between “management decision-making and supervision” and “business execution” to ensure the Board of Directors (BOD) functions with maximum efficiency and conducts business quickly and effectively.
BOD meetings are held monthly, at which time 12 directors and six auditors, including two outside directors and four outside auditors, respectively, attend. The meeting agenda includes deliberating important management issues and reporting business operations in compliance with the laws and regulations of the Articles of Incorporation and other internal rules.
A monthly management meeting attended by 10 directors, two full-time auditors and 20 executive officers is also held, where members deliberate and review important issues and try to ensure further communication among executives in order to better control business operations.
UACJ also utilizes a “Board of Auditors” system comprised of six auditors, four of whom are outside auditors and two of whom have expertise in finance and accounting. There is also a Secretariat with two staff members assigned to help improve the functions of the Board of Auditors.
Auditors attend important internal meetings such as BOD meetings and audit the directors’ execution of duties as an independent organ playing a role in corporate governance. The board of auditors meets monthly. In addition to preparing the auditing policy and other plans for each fiscal year, the operation and maintenance status of internal control systems, risk prevention measures, and the state of initiatives for management issues and other matters are audited, and the information is shared in periodic audit reports prepared by the full-time auditors.
Effectively Evaluating the Board of Directors
To analyze and evaluate the effectiveness of the BOD, UACJ conducted a survey where it polled directors and auditors on various issues, including the composition and operations of the BOD. Following discussions based on the results of the survey, it was confirmed that the UACJ BOD is of an appropriate size, is comprised of a diverse balance of members, and operates properly in exercising supervisory functions over the management. It was also confirmed that, for BOD meeting discussions, a culture has developed in which both members of preliminary review meetings and those attending BOD meetings respect open and constructive discussions and freely exchange opinions.
The importance of making decisions after actively discussing business strategies and improving preparatory meeting explanations for outside officers has been realized as well.
Status of Responding to the Corporate Governance Code
In response to the applying the Corporate Governance Code as a measure of corporate performance on the Tokyo Stock Exchange in June 2015, UACJ is working to strengthen its governance system even further. In June 2016, we announced implementation of the following initiatives:
- Preparing evaluation and selection criteria for outside accounting auditors
- Holding periodic meetings with outside directors
- Beginning a study to consider introducing stock-based compensation linked to mid- to long-term performance, etc.
- Evaluating the effectiveness of the BOD
Remuneration for Officers
Regarding the remuneration paid to UACJ directors and auditors, the contents of the resolution made during the June 2006 general stockholders’ meeting of the former Furukawa-Sky Aluminum Corporation have been maintained. Specifically, the annual remuneration cap for directors is ¥450 million excluding normal employee salaries, and that for auditors is ¥75 million. The amounts paid to directors are limited to that which is approved at shareholders’ meetings and confirmed in a BOD meeting. Determination of the amounts paid to directors is calculated considering various factors, such as working full-time or part-time and position in the company. A portion of the remuneration paid is performance based.
The amounts of paid to auditors are also within the limit approved at the shareholders’ meeting, and further determined through consultation with the auditors.
The UACJ Group does not offer stock options as a means of providing remuneration to officers.
| Classification | Number of officers | Remuneration |
|---|---|---|
| Directors (Outside Directors) |
14 (2) |
¥361 million (¥13 million) |
| Auditors (Outside Auditors) |
8 (5) |
¥60 million (¥11 million) |
| Total (Outside Officers |
22 (7) |
¥421 million (¥24 million) |
Note: Above data includes two board directors and two auditors that resigned at a general meeting of the shareholders during the second term held on June 26, 2015.
Training Officers
To promote adequate performance of duties, UACJ provides various training programs for directors and auditors upon assuming their positions and during their terms of service.
New officer training includes a briefing for all directors and auditors, in which their roles and responsibilities are clarified. For outside officers, members are also briefed on information about the Group, such as businesses, finances and organizational structure.
Ongoing training while assigned to their positions includes camp-style training to deepen their understanding of governance and discuss various issues facing the Group. Additional training sessions are also provided depending on the knowledge, experience and capacity of each individual.
Attendance at sessions and participation in Group business debriefings when held help deepen the officers’ understanding of business details.
Appointing Officers
The appointment of directors at UACJ is based on making appropriate decisions on personnel evaluations, taking into consideration a candidate’s career and abilities, and also the balance and diversity of knowledge, experience and capacity of the BOD as a whole.
Two independent outside directors who meet the requirements set forth for independent outside officers by the Tokyo Stock Exchange are also appointed. Based on the criteria stipulated in the Companies Act and by the Tokyo Stock Exchange, members who are believed will best contribute to the BOD through their straightforward, concise and constructive opinions are chosen. If it becomes necessary to increase the number of officers according to changes in the environment in the future, candidates will likely be selected following a similar policy.
| Classification | Full name | Reason for appointment | Activities |
|---|---|---|---|
| Outside director, member of the board | Toshio Suzuki | As a Professor Emeritus of The University of Tokyo, Toshio Suzuki has a rich academic background and an objective viewpoint. We were confident that these features would enable him to perform duties assigned, and requested him to assume the position as one of the outside directors of UACJ. | Attended all 14 of the BOD meetings held during the fiscal year, openly expressing his opinion from an objective viewpoint and confidently supporting his comments based on his rich academic experience as a Professor Emeritus. |
| Ryoko Sugiyama | Having tenured experience as an academic at Tokoha University and an impressive background in business management including being a director at various companies, we were confident that Ryoko Sugiyama would perform duties assigned to her and accordingly requested her to accept the position of outside director at UACJ. | Attended 10 of the 11 BOD meetings held since joining UACJ in fiscal 2016. Openly expressed her opinions from an objective point of view, clearly showing her poise and experience as a university professor and company director. | |
| Outside auditor & board supervisory role | Akari Asano | Given his long experience and extensive knowledge gained through management positions such as the general manager of an administrative department and corporate executive, we were certain that Akari Asano was an excellent choice for performing the duties of an outside auditor and requested him to work with UACJ. | Attended all 14 BOD meetings and 13 Board of Auditors meetings throughout the fiscal year. Openly commented and expressed his opinions backed by his years of experience accumulated as a company executive. |
| Tetsuya Sato | Possessing a broad knowledge of the corporate world and many years of experience, including holding the position of auditor at Furukawa Electric Co., Ltd., we felt Tetsuya Sato was an ideal choice for the position of outside auditor and requested him to work with UACJ. | Attended 13 of 14 BOD meetings 10 of 13 Board of Auditors meetings held during the fiscal year. Openly commented and expressed his opinions based on his wealth of knowledge and broad perspective as a company officer. | |
| Takashi Sone | Boasting a wealth of knowledge and having broad perspective of business management, including serving as a managing executive office at Sumitomo Corporation, we were certain that Takashi Sone would perform the duties of outside auditor appropriately and requested him to take the position. | Attended all 14 BOD meetings and all Board of Auditors meetings held in the fiscal year. Freely expressed his opinions when he felt it was needed, doing so confidently and contributing his wealth of knowledge and broad perspective as a company officer. | |
| Atsuki Matsumura | In addition to having experience in corporate management as the president and representative director of Siltronic Japan Corporation, Atsuki Matsumura also engaged in group management in the Corporate Planning Division of Nippon Steel & Sumitomo Metal Corporation. With his wealth of knowledge and broad business perspective, we were confident he would perform his duties accordingly and asked him to take a position as an outside auditor. | Attended 10 of the 11 BOD meetings and all 10 Board of Auditors meetings held since joining UACJ during the fiscal year. Openly expressed his opinions backed long experience as a corporate officer. |
Information Disclosure
To ensure timely and appropriate information disclosure to investors, UACJ introduced a system in which the director in charge of the Public and Investor Relations Division is responsible for disclosure, and the general manager of the Public and Investor Relations Department is in charge of administrative affairs.
Specifically, based on various regulations set forth by the Financial Instrument Exchange, any information that is likely to be classified as an issue requiring disclosure is immediately reported by the head of the division supervising such issue to the general manager of the Public and Investor Relations Department. The general manager of the Public and Investor Relations Department then consults with the general manager of the Legal Affairs Department, as needed, and decides whether or not to disclose the information. If the decision is made to disclose information, the general manager must first obtain approval from the head of the division concerned and the president of UACJ.
Constructive Dialogue with Shareholders
In addition to appointing a Director in charge of Public and Investor Relations, UACJ has assigned the Public and Investor Relations Department as the department responsible for investor relations.
Quarterly results briefings and other opportunities, such as one-on-one meetings, small meetings and factory tours, are arranged for shareholders and investors when required.
We also have a basic policy to visit investors in the U.S.A., Europe and Asia once a year.
We try to improve information disclosure even further through initiatives such as information dissemination through our website and issuing annual reports. The UACJ website has received high evaluation from external institutions, and came in sixth in the overall standings of the “Fiscal 2016 Adequacy Ranking of All Listed Company Homepages.”
Compliance
In order to ensure the continuation of sound and fair business activities as a corporate group trusted by society, we established and distributed the Group Code of Conduct, which stipulates items that the employees of overseas companies in the Group must observe and share. The Code of Conduct is published in local languages for overseas companies including English, Chinese, Czech, Indonesian, Thai, Spanish and Vietnamese. Training to ensure compliance with laws and regulations such as the Anti-Monopoly Act is also being implemented as part of employee development at Group companies.
Risk Management
In the UACJ Group, risks that may occur during operations are identified and evaluated by the respective departments as part of the risk management activities conducted throughout each company. Additionally, for risks that are identified, information on countermeasures, the time limit required for implementing them and progress status are collected and compiled into a “Risk Management Chart” so that information can be shared throughout the company. It is also reported to the CSR Committee, which evaluates the validity of the countermeasure.
We are also reviewing business continuity plans (BCPs) for large-scale earthquakes and working to build systems that enable operations to recover quickly. This includes confirming employee safety, setting up alternate production facilities and relocating headquarter functions elsewhere should the headquarters be severely damaged.
CSR Management
In order to strengthen CSR management, UACJ established a CSR Committee for the purpose of creating a CSR promotion system to control group-wide, cross-sectional implementation of activities. This committee is chaired by the president and includes full-time directors, general managers from the headquarters and factories, and the presidents of related sales companies. To improve CSR management, the CSR Committee meets once a year to discuss and report on general policies and measures related to CSR, including compliance, risk management, and the training and enlightenment of executives and senior staff. Each committee member then disseminates the policies and measures discussed by the committee throughout the Group companies to further develop initiatives.