SECTION4 Corporate Governance
Basic policy on corporate governance
Calbee has a vision of being a company with the "respect, admiration and love, firstly of our customers, suppliers, and distributors, secondly of our employees and their fami- lies, thirdly of the communities, and finally of our stockholders." The reason for this vision is we believe that management that puts customers and business partners first will maximize profits for our shareholders. We believe that enhancing corporate governance is crucial to live up to the trust and expectations of all stakeholders and increase corporate value, and, based on this frame of mind, we intend to increase the transparency of management while building up our internal control and compliance systems.
We have formulated Calbee's Corporate Governance Code, which systematizes our basic policy on corporate governance. Calbee's Corporate Governance Code
https://www.calbee.co.jp/en/ir/pdf/2021/governance_code.pdf
Corporate governance system
We recognize corporate governance as a management priority and have been working to strengthen and enhance our corporate governance system from an early stage. As such, we have adopted a corporate governance system that has functions of management oversight. It comprises the Board of Directors, which has a majority of outside directors, and the Audit & Supervisory Board members, and Audit & Supervisory Board. We have introduced an executive officer system to separate business execution and supervisory functions to improve management transparency, clarify management responsibilities, speed up decision-making, and strengthen the management oversight function. In addition, the Board of Directors and the executive officer system place importance on diversity in regard to the backgrounds and values of the members.
Calbee Report 2022
Transition of corporate governance system enhancement
Purpose | Measures taken | |
2001 | Separation of supervision and | Adopted an executive officer system |
business execution | Appointed outside directors | |
Enhancement of supervisory and | Reduced the number of internal directors from nine | |
to two | ||
monitoring functions | ||
2009 | Increased the number of outside directors from two | |
Promotion of diversity of the | ||
to five | ||
Board of Directors | ||
Appointed the first non-Japanese director | ||
2010 | Enhancement of management | Established the Advisory Board (currently the |
transparency and soundness | Nominating Committee/Compensation Committee) | |
2014 | Clarification of management | Reduced director terms from two years to one year |
responsibility | ||
2019 | Strengthening of management | Increased the number of internal directors by two; the |
structure | Board of Directors increased from six to eight | |
Clarification of the function of | Changed the Advisory Board into the Nominating |
Committee/Compensation Committee, chaired by an | |
committees | |
outside director | |
Number of directors 8 | Number of Audit & |
Supervisory Board members 3 |
Internal | Ratio of outside | ||
Ratio of outside | directors | ||
Non-Japanese director | Audit & | ||
directors | Supervisory Board | ||
63% | members | ||
Outside | 67% | ||
directors | |||
Female directors |
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Corporate Governance
Organization of corporate governance
General Meeting of Shareholders | ||||||||||||||||||||||||||
Appoint / Dismiss | Appoint / Dismiss | Appoint / Dismiss | ||||||||||||||||||||||||
Audit | ||||||||||||||||||||||||||
Audit & Supervisory Board | Nominating Committee/ | Board of Directors | ||||||||||||||||||||||||
Compensation | ||||||||||||||||||||||||||
Committee | Report | |||||||||||||||||||||||||
President & CEO, Representative Director | Report | |||||||||||||||||||||||||
Auditor | ||||||||||||||||||||||||||
Accounting | Report / | Sustainability Committee | ||||||||||||||||||||||||
Independent | audit | Cooperate | Management Council | |||||||||||||||||||||||
Ethics and Risk | ||||||||||||||||||||||||||
Ethics and Risk | ||||||||||||||||||||||||||
Report | Management Advisory | |||||||||||||||||||||||||
Management Committee | ||||||||||||||||||||||||||
Board | ||||||||||||||||||||||||||
Cooperate | Executive Officers | ||||||||||||
Internal Audit Division | |||||||||||||
Internal | |||||||||||||
audit | Divisions, and Internal | Affiliated companies | |||||||||||
Companies | |||||||||||||
Corporate governance system
Main items | Contents | Main items | Contents | |
Form of institutional design | Company with Audit and | Audit & Supervisory Board members | ||
Supervisory Board | Term of office | 4 years | ||
Number of Audit & Supervisory Board members | 3 (2) | |||
Board of Directors | (of whom, outside Audit & Supervisory Board | |||
Term of office | 1 year | members) | ||
Number of directors (of whom, outside directors) | 8 (5) | Number of meetings of Audit & Supervisory | 14 | |
Number of meetings of the Board of Directors | 13 | Board (FY2022/3) | ||
(FY2022/3) | ||||
Board of Directors' attendance ratio | 99% | Adoption of an executive officer system | Yes | |
(all members) | ||||
Calbee Report 2022
Board of Directors
The Board of Directors holds regular meetings once per month, in principle. The Board formulates and makes decisions regarding important management policies and strategies connected to sustainable growth and improving corporate value in addition to making decisions concerning statutory matters, and supervises business execution.
Nominating Committee/Compensation Committee
The Nominating Committee/Compensation Committee meets four times a year, in principle. It is a discretionary committee chaired by an outside director. The committee discusses the nomination and compensation of directors and Audit & Supervisory Board members.
Audit & Supervisory Board
The Audit & Supervisory Board consists of three Audit & Supervisory Board members. (Including 2 outside Audit & Supervisory Board members). The Board ensures transparency and oversees audits management.
Management Council
The Management Council meets once a month, in principle. Regular members consist of senior executive officers (including three directors) and the general manager of the Corporate Planning Department. The council verifies the current status of, and issues facing, business administration and conducts preliminary discussions on important matters.
Sustainability Committee
The Sustainability Committee is responsible for determining material issues for the Calbee Group, deliberating on priority themes, and managing the progress of initiatives.
Ethics and Risk Management Committee
The Ethics and Risk Management Committee is chaired by the president & CEO. The committee discusses, decides, and manages progress on issues and countermeasures related to promoting compliance and risk reduction.
Ethics and Risk Management Advisory Board
The Ethics and Risk Management Advisory Board includes an eternal expert. The Board discusses management risks and compliance issues, and then makes proposals to the CEO and the Ethics and Risk Management Committee.
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Corporate Governance
Policies and processes for appointing Directors and Audit & Supervisory Board Members
Policy
Composition of the Board of Directors
The Board of Directors is composed of a majority of independent directors. We actively promote the Board's diversity by appointing members with differing personal histories, genders, and nation- alities. In addition, we appoint a balanced combination of outside directors with backgrounds in many different areas of expertise, such as the food industry, general industry, academia, and journalism.
Policy on appointing Outside Directors and Outside Audit & Supervisory Board members
In appointing outside directors or outside Audit & Supervisory Board members, we place importance on the following points and comprehensively consider whether or not they contribute to sound and efficient corporate management. Evaluations of the independence of directors and Audit & Supervisory Board members are conducted based on the standards established by the Tokyo Stock Exchange.
Expectations for useful, objective, and fair advice and supervision based on a thorough knowledge and experience of corporate management, and a high level of knowledge in the food industry
Expectations for useful, objective, and fair advice and supervision based on a high level of knowledge in the specific field
Processes
The nomination of outside directors is decided upon approval at the General Meeting of Shareholders after being reviewed by the Nominating Committee, which is a discretionary advisory committee, and recommended by the Board of Directors.Regarding the nomination of candidates for outside Audit & Supervisory Board members, candidates must have a strong will to respond to the mission entrusted to them from the shareholders and a background in finance, accounting, and/or law. Candidates are recommended by the Board of Directors and approved by the Audit & Supervisory Board before being decided on at the General Meeting of Shareholders.
Calbee Report 2022
Enhancing the effectiveness of the Board of Directors
Evaluation of the effectiveness of the Board of Directors
To continuously improve the effectiveness of the Board of Directors, we conduct an annual evaluation of its effectiveness. Directors are interviewed individually and fill out a questionnaire pertaining to the effectiveness of Board meetings. Effectiveness is evaluated in terms of whether the Board of Directors is capable of decision-making that increases corporate value from the shareholders' perspective and whether the Board can fulfill its supervisory function over executive divisions. Results are then analyzed to further improve the functions of the Board of Directors.
Method of evaluation of the effectiveness
In the evaluation of the effectiveness of the Board of Directors for the fiscal year ended March 31, 2022, questionnaires on the following subjects were issued to directors and Audit & Supervisory Board members. The format of these questionnaires involved three-level quantitative evaluation and open response columns. In order to develop a better understanding of the questionnaire responses, individual meetings were held with all directors, and the results were discussed at a Board of Directors' meeting.
Questionnairesubjects
- Processes and composition of the Board of Directors
- Specialties and diversity of directors
- Auditing systems
- Adequacy of discussions at Board of Directors' meetings from a medium- to long-term perspective
- Sufficiency of discussion on Director/officer appointments by Nominating Committee
- Adequacy of discussions on evaluations and compensation of Director/Senior management by Compensation Committee
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Corporate Governance
Results of effectiveness evaluation
The evaluation conducted in the fiscal year ended March 31, 2022, found that the Board of Directors was sufficiently effective.
Results | |
Quantitative | The overall average for all responses was "generally appropriate," and responses of |
evaluation | "generally appropriate" and "appropriate" were received for more than 90% of questions. |
Calbee Report 2022
Future initiatives by the Board of Directors
In the fiscal year ending March 31, 2023, initiatives will advanced based on the following three priority themes in order to drive ongoing improvements to the effectiveness of the Board of Directors through means such as reinforcing risk management and internal control.
Priority themes | Policies |
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The number of outside directors and other aspects of the composition of the Board of | |
Directors were deemed appropriate, and directors are effectively performing their duties. | |
The directors selected feature diverse career backgrounds and possess the insight and | |
Qualitative | expertise required to perform their duties. |
Although meetings of the Board of Directors were held remotely, brisk, unrestrained, and | |
evaluation | |
meaningful discussion took place with frequent questions asked, despite the time | |
limitations. |
Discussions for policies and strategies regarding important management issues
It is important for the Board of Directors to discuss the growth strategies to be implemented leading up to 2030 as well as the related priority issues. The following goals will be pursued by the Board of Directors based on a recognition of the importance of formulating policies and resource allocation founded on appropriate strategies.
Provision of more opportunities for regularly sharing information regarding the progress of new businesses and the issues that have arisen during the course of these businesses
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Outside directors engaged in discussions based on their varied perspectives and with | |
sufficient information due to materials on agenda items supplied in advance of meetings. | |
Improvement has been seen in discussions from a medium- to long-term perspective | |
Areas of particular | with regard to agenda items for Board of Directors' meetings. |
The addition of internal Audit & Supervisory Board members well versed on Calbee's | |
improvement | |
business in the fiscal year ending March 31, 2023, is anticipated to make for a strong | |
auditing system comprised of two full-time Audit & Supervisory Board members. | |
Initiatives based on issues recognized in evaluation in the fiscal year ended March 31, 2021
The Board of Directors took steps to enhance reporting regarding the progress of important overseas projects, new development projects that are priorities under the Medium-term Business Plan, and the establishment and implementation of sustainability strategies, climate change response measures, and digital transformation strategies. In addition, avenues for monitoring these activities and pursuing qualitative improvements were pursued. Moreover, input and suggestions received from institutional investors and other stakeholders was shared at meetings of the Board of Directors via discussion with outside directors and investors in order to facilitate deliberations aimed at improving corporate value.
Expansion of opportunities for tracking M&A and post-merger integration projects in | |
overseas businesses and the status of raw material procurement in frontline | |
operations | |
Emphasis on quantitative indicators when deciding policies and strategies | |
We will enhance monitoring by the Board of Directors through the bolstering of the | |
Enhancement of | scope and targets of monitoring. |
monitoring regarding | Confirmation of the progress of strategic investment and development projects and |
strategy formulation | status of projects facing issues along with reasons for issues and remedy measures |
and implementation | Confirmation of status of human resources, digital transformation, and other impor- |
tant management measures | |
The roles of the Nominating Committee and the Compensation Committee will be | |
Expansion of roles | clarified based on the understanding of their critical role in improving corporate gover- |
nance in order to fully capitalize on their respective functions. | |
and activities of | |
nominating committee | Coordination between Board of Directors and Nominating Committee and the |
and compensation | Compensation Committee regarding succession planning |
committee | Enhancement of Nominating Committee and the Compensation Committee secre- |
tariat functions and coordination with outside directors
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Corporate Governance | Calbee Report 2022 |
Executive remuneration
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To enhance management transparency, remuneration paid to directors goes through a process of discussion by the Compensation Committee, resolution by the Board of Directors, and approval at the General Meeting of Shareholders. Remuneration for senior executive officers goes through a process of discussion by the Compensation Committee and then resolution by the Board of Directors. The remuneration of the Company's directors and senior executive officers comprises 1) basic remuneration (fixed remuneration), 2) bonuses (variable remuneration), 3) performance-based stock
compensation(variable remuneration), and 4) retirement bonus(variable remuneration). Approximately half of the remuneration is performance-based to promote medium- to long-term growth in addition to continued and improved performance every fiscal year and to connect remuneration to shareholder interests.
Outside directors and Audit & Supervisory Board members are limited to fixed remuneration only, as they are in positions independent from business execution.
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Director | Basic remuneration 50% | Bonuses 25% | Performance-based stock compensation | |||||
(excluding outside | Retirement bonus 25% | |||||||
directors) | ||||||||
Senior executive | ||||||||
officers | ||||||||
1. Basic remuneration | 2. Bonuses | 3. Performance-based stock compensation | 4. Retirement bonus | |||||
Position | Compensation for executive duties | Short-term incentive | Medium- to long-term incentive | |||||
Linked to results during the fiscal year | Linked to results during the period of appointment | |||||||
Payment form | Cash | Cash | Shares | Cash | ||||
Annual compensation linked to degree of accomplishment of targets | Non-monetary remuneration issued at time | |||||||
Payment of compensation based on opera- | set for evaluation indicators | |||||||
of resignation based on points (shares of | ||||||||
tional execution duties for specific ranks | Payments based on duties and degree of accomplishment of targets for | One half of the annual bonus amount set | ||||||
Company stock) allocated each year in | ||||||||
Overview | Compensation amounts decided through | personal performance indicators and consolidated performance indicators | aside and paid in one lump sum upon | |||||
accordance with rank and degree of accom- | ||||||||
comprehensive assessment of ranks, | (net sales, operating profit, and profit attributable to owners of parent) | retirement | ||||||
plishment of consolidated performance | ||||||||
duties, and responsibilities | Diversity and other human resource development targets representing | |||||||
targets | ||||||||
50% of personal performance indicators | ||||||||
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Rate of Influence of Evaluations on Bonuses | |||||
In-house com- | |||||
Consolidated performance 50% | In-house company performance 30% | Personal performance | |||
pany presidents | 20% | ||||
Other officers | |||||
Consolidated performance 70% | Personal performance 30% | ||||
Evaluation Indicators for Performance-Based Stock compensation
Prior to March 31, 2022 | Profit attributable to owners of parent | ||||||
Consolidated Net Sales 20% | Consolidated operating profit 50% | 30% | |||||
From April 1, 2022 | Profit attributable to owners of parent | Sustainability targets* | |||||
Consolidated Net Sales 20% | Consolidated operating profit 40% | 25% | 15% | ||||
- Sustainability targets have been set for protein-rich product sales ratio, ratio of women in management, domestic procurement volume of potatoes, Food Communications participants, rate of use of certified palm oil (rates of accomplishment of the targets indicated on the Company's corporate website for the aforementioned indicators), and employee engagement
Governance Corporate
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Outside directors/
Audit & SupervisoryBasic remuneration 100% Board Members
Data
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Disclaimer
Calbee Inc. published this content on 19 October 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 October 2022 07:29:04 UTC.