Corporate Governance

Corporate Governance

Corporate Governance Policy

Basic Approach

Nitta believes that undertaking sustainable growth and medium- to long-term enhancement of corporate value through fair business activities is the basic mission of corporate management in responding to the trust of our shareholders. Additionally, we have obligations to stakeholders other than shareholders, including employees, business partners, customers, local communities, and the global environment.
In practicing corporate management under this way of thinking, we recognize the importance of establishing corporate governance that covers securing accuracy and greater speed in decision-making, improving the transparency of management, enhancing information disclosure and IR, and strengthening risk management (including compliance systems). Accordingly, we are working to strengthen and enhance governance through means including management system innovation.

Corporate Governance System

Overall View of Our Governance Organization

Nitta has an Audit & Supervisory Board so as to facilitate the ability of the Board of Directors to perform proper business management while the Audit & Supervisory Board carries out management oversight.
In order to ensure the full realization of these functions, we appoint multiple outside directors who are capable of providing an independent perspective on business execution. Moreover, outside Audit & Supervisory Board members are selected from multiple fields and are appointed to make up half of the Audit & Supervisory Board, where they facilitate multifaceted oversight. In this way, we have a broad spectrum of experience and expertise from which to obtain advice and ideas, as well as a system of corporate governance with highly transparent and sound management.
We have also adopted an executive officer system that separates decision-making (the Board of Directors) from business execution in order to ensure both appropriate business management and efficient business execution.

Directors and the Board of Directors

In order to facilitate the establishment and achievement of corporate management strategies, policies, and targets, the Board of Directors is vested with the authority and responsibility to perform concrete planning, stipulate basic matters for overall management, and put forward resolution measures for internal issues, along with the authority to oversee the performance of representative directors and other directors and executive officers. The Board of Directors is obligated to pursue all duties fairly.
To facilitate prompt and appropriate decision-making and fulfillment of the full scope of responsibilities held by the Board of Directors, we limit the number of directors to nine, including three outside directors.
Directors serve for one year, after which they are eligible for reappointment.

Audit & Supervisory Board

The purpose of the Audit & Supervisory Board is to carry out the duties required of it by Japan’s Companies Act and to serve as an objective observer of our management. Full-time Audit & Supervisory Board members attend Board of Directors meetings, Management Council meetings, and other important meetings, and perform compliance- and legality-related auditing of the company’s business execution. Outside Audit & Supervisory Board members ask questions regarding the legality of company decision-making at Board of Directors meetings, and provide their own opinions on these matters.
To facilitate accounting and operational audit effectiveness, we limit the number of Audit & Supervisory Board members to four. At least half of these are outside Audit & Supervisory Board members.
Nitta has established an organization to support the work of Audit & Supervisory Board members, with dedicated support staff who execute duties under the leadership of the Audit & Supervisory Board.
Additionally, appointments and transfers of these staff members shall be determined through consultation with the Audit & Supervisory Board to ensure the independence of the staff from directors and to ensure their effectiveness in carrying out tasks as directed by Audit & Supervisory Board members.

Outside Directors and Outside Audit & Supervisory Board Members

Nitta appoints outside officers, who bring a wide range of experiences and insights, including in specialized fields, to our company’s managerial decision-making, and who supervise the validity of our business execution from fair and neutral standpoints.
With regard to standards for independence of outside directors, Nitta follows the criteria for outside director independence stipulated in the 2010 Stock Exchange Guidelines for Listing Management, as well as the attribute information from the 2012 Revised Stock Exchange Listing Rules. However, with regard to the appointment of outside directors, Nitta has established its own minimal standard criteria.

Outline of Limitation of Liability Agreements

Nitta maintains agreements with outside directors and outside Audit & Supervisory Board members, which are based on the stipulations of Paragraph 1, Article 427 of the Companies Act and which limit liability for compensation as well as the amount of liability compensation as stipulated by Paragraph 1, Article 423 and Paragraph 1, Article 425, respectively, of the Companies Act.

Nomination and Compensation Committee

The Nitta Group’s Nomination and Compensation Committee consists of three outside directors and two inside directors. Following consultation with the Board of Directors, the Nomination and Compensation Committee deliberates on candidates for appointment to and dismissal from the Board, human resource development programs, the compensation system for directors, and the level and distribution of compensation, after which it reports to the Board of Directors.

Nitta Group Corporate Governance System Diagram
Nitta Group Corporate Governance System Diagram
Members in Attendance at Board of Directors, Audit & Supervisory Board, and Nomination and Compensation Committee Meetings

As of 25th June 2024

Names of directors and Audit &
Supervisory Board members
Board of Directors Audit & Supervisory Board Nomination and Compensation
Board of Directors Representative director/president Yasunori Ishikiriyama
Representative director Seiichi Kitamura
Director Toyohiro Hagiwara
Director Atsushi Izumi
Director Kouichi Kakegami
Director (outside) Hiroe Toyoshima
Director (outside) Takehisa Ikeda
Director (outside) Tomoyuki Ono
Audit & Supervisory Board member Full-time Audit& Supervisory Board member Junichi Akai
Full-time Audit& Supervisory Board member Katsuhiro Fukuwaka
Audit & Supervisory Board (outside) Kazuyoshi Matsuura
Audit & Supervisory Board (outside) Tetsuaki Ogami

◎: Chair ○: Attending member

Percentage of Outside Members
  • Percentage of Outside Members
  • Audit & Supervisory Board
Experience and Expertise of Directors and Executive Officers

As of 25th June 2024

Position Name Experience and expertise
Corporate management/
organizational operation
Global Sales/
Manufacturing technology/R&D HR/legal/
risk management
Management strategy/
financial accounting
Directors Yasunori Ishikiriyama
Seiichi Kitamura
Toyohiro Hagiwara
Atsushi Izumi
Kouichi Kakegami
Hiroe Toyoshima
Takehisa Ikeda
Tomoyuki Ono
Executive officers Hiroki Suzuki
Kazushige Kinoshita
Yuji Hamada
Takafumi Ishizuka
Keiji Hirata
Takemasa Kurokawa
  • Experience and Expertise of Directors and Executive Officers
  • Independence and Diversity of Directors

Corporate Governance Report

Nitta’s Corporate Governance Report is on the website of the Tokyo Stock Exchange.
Feel free to read this report.

Corporate Governance Report

Officer Compensation

Basic policy for the determination of directors’ compensation decided by the Board of Directors, based on the report by the Nomination and Compensation Committee, is as follows.

  • 1.The composition of compensation will provide directors with incentive to steadily achieve yearly performance targets and to promote appropriate management, and will make directors sufficiently aware of sustainable improvement in corporate value over the medium to long term through the achievement of medium- to long-term business plans.
  • 2.The compensation level will be sufficiently competitive in comparison with companies of similar scale and belonging to the same industry, to secure officers who are outstanding human resources possessing the abilities and the aptitude to meet the criteria for appointment as directors of the Company.
  • 3.The compensation system will enable fair and impartial evaluation with high transparency.

In accordance with our basic policy, the Nomination and Compensation Committee deliberates matters related to performance evaluations involving calculation of individual compensation amounts for directors, and advises the Board of Directors regarding the results. Based on the Committee’s reports and advice, the Board of Directors determines the individual compensation amounts and other matters for directors.
The amount of compensation for Audit & Supervisory Board members is determined by resolution of the Audit & Supervisory Board, based on the advice of the Nomination and Compensation Committee and within the total amount of compensation determined through resolution at the General Shareholders’ Meeting.

Type of compensation Directors
(excluding outside directors)
Outside directors Audit & Supervisory Board members Outline
Fixed compensation Monetary compensation 70% 100% 100% This monetary compensation is paid monthly as basic compensation to ensure that recipients fully demonstrate qualities and abilities for driving corporate growth and meet their responsibilities.
Monetary compensation 10% - - This monetary compensation is paid in accordance with each fiscal year’s company-wide performance evaluation and officers’ individual performance evaluations following the end of the fiscal year, as a short-term incentive to encourage appropriate management and the steady achievement of the fiscal year’s performance targets.
Restricted stock
20% - - Monetary compensation receivables are paid as assets in kind related to the granting of restricted stock, for the purpose of providing directors with incentive to continuously enhance the Company’s corporate value, while promoting further value sharing between directors and shareholders.

Analysis and Evaluation of the Effectiveness of the Board

Nitta uses a questionnaire to survey all directors and Audit & Supervisory Board members, including those outside the Company, about the effectiveness of the Board of Directors. The results are reported to the Board of Directors. An outline of the results is as follows.

  • ・The operation of the Board of Directors (including frequency of meetings, number of agenda items, and time allotted for prior examination of materials) is appropriate overall.
  • ・Board of Directors meetings maintain conditions in which outside directors and Audit & Supervisory Board members can freely express opinions.

As indicated, positive evaluations have been received, and our analysis and assessment show that the effectiveness of the Board of Directors is ensured overall.
At the same time, opinions have also been received calling for “more flexible setting of meeting times,” “review of the standards for items to be discussed at the Board of Directors,” and “implementation of training in response to changes in society.”
Drawing on such opinions, we intend to work toward further improvement of the effectiveness of the Board of Directors.

Internal Control Systems

The Nitta Group has established the Basic Policy on Construction of Internal Control Systems. In line with this policy, we maintain an internal control system covering things such as deliberation on important matters, establishment and implementation of relevant rules, internal audits, compliance, and risk management. This is how we strive to build and operate a system for ensuring all business is done appropriately. Details on the status of maintenance and operation of our internal control can be found in part IV, “Matters Concerning the Internal Control System,” in the Corporate Governance Report.