Corporate Governance

Corporate Governance

Approach and Governance System

To drive sustainable growth and enhance corporate value over the medium and long terms, the GS Yuasa Group is committed to establishing an organization and systems that enable fast, efficient responses to a changing business environment. At the same time, our basic policy on corporate governance is to make every effort to thoroughly implement and strengthen compliance and enhance the soundness and transparency of management.

A new governance structure began in fiscal 2017 based on this philosophy. GS Yuasa Corporation, the holding company, is responsible for formulating management strategies for all of the Group's businesses, as well as management for the entire Group and oversight of the Group's business execution. GS Yuasa International Ltd., the Group's core operating company, is the key decision-making body for business execution, consolidating and strengthening business execution and making swift business-related decisions.

The Board of Directors makes fast and effective decisions related to the Group's management by prioritizing strategic decision making and supervisory functions for management policy. In addition, monitoring has been reinforced by appointing multiple independent outside directors.

Governance Structure (FY 2020)

image:Governance Structure

Efforts to strengthen corporate governance

image:Efforts to strengthen corporate governance

Evaluating the effectiveness of the Board of Directors

The effectiveness of the Board of Directors has been evaluated once a year since fiscal 2016. In fiscal 2019 as well, all directors and corporate auditors completed a questionnaire on the structure, management, agenda, and duties of the board.

As a result of analysis and evaluation of the questionnaire replies, it was deemed that the Board of Directors is operating effectively. However, constructive opinions and suggestions were made from the perspective of further strengthening Group governance, and we will continue to address these issues.

Evaluation and improvement measures in the most recent two years are shown on the right.

Evaluating the effectiveness of the Board of Directors

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Evaluation itemsFY2019 (evaluation of FY2018)FY2020 (evaluation of FY2019)
Composition of the Board of Directors There were opinions relating to increasing the number of outside directors and appointing female directors. We newly established the Nomination and Compensation Committee, which included two outside directors, and endeavored to enhance the objectivity and transparency of the selection process for candidate directors. Similar opinions to the previous fiscal year were made. In the light of the results of discussions in the Nomination and Compensation Committee, we appointed a female outside director and increased the number of independent directors to more than one-third of the board. As a result, composition of the board has come to further reflect our diversity.
Management of the Board of Directors While most evaluations were affirmative, there was also a request to ensure more discussion time. We therefore revised the time setting for meetings of the Board of Directors and other important meetings and made improvements so as to properly ensure discussion time. Improvements made in the previous fiscal year were positively appraised. Overall evaluations were affirmative, but opinions were also given relating to further improvements so that efficient reports could be made. We therefore carried out a review of report time and eligible topics.
Agenda of the Board of Directors A request was made regarding the follow-up of important matters resolved. We made changes so that designated important matters are reported regularly to the Board of Directors. An opinion was given regarding the discussion of matters prior to their referral to the Board of Directors. We therefore carried out a review of the Group’s decision-making process.
Duties of the Board of Directors To further improve the supply of information to outside directors, among other things, we shared summaries of discussions in meetings prior to the Board of Directors with them and conducted inspections of important overseas sites by outside directors. Interest was shown in the fostering of next-generation managers. We therefore confirmed the implementation of new training sessions, etc. for personnel, including corporate officers and officers.

Establishment of Nomination and Compensation Committee

On February 26, 2019, the Board of Directors voted to establish a discretionary Nomination and Compensation Committee, chaired by an independent outside director, and serving as an advisory body to the Board of Directors. The goal of the committee will be to strengthen the independence, objectivity and accountability of Board of Director functions such as director nominations and compensation.

Nomination committee functions include consulting on proposals for nominating new directors and for selecting a new corporate president and plans for successors (including human resource development), in addition to reporting findings to the Board of Directors. Meanwhile, the compensation committee will consult on policy determinations for director compensation as well as for individual director remuneration, and reporting findings to the Board of Directors.

Nomination and Compensation Committee structure

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ClassificationPosition titleNames
Chairperson Outside Director Ikuo Otani
Committee member Outside Director Takayoshi Matsunaga
Outside Director Yoshiko Nonogaki
President Osamu Murao
Senior Managing Director Toshiyuki Nakagawa

Reasons for Appointing Internal Directors

To provide control over the Group as the holding company, GS Yuasa Corporation applies a balanced approach to appointing directors who possess knowledge and experience covering the business and functions of the entire Group and the necessary aptitude and competence to ensure speedy decision making.

At present there are no female directors, but GS Yuasa positively recruits female graduates and promotes measures to encourage women to be active at work, including next-generation training, and the ratio of women in managerial positions is gradually increasing.

Distribution of skills of directors and auditors (FY2020)

image:Distribution of skills of directors and auditors (FY2020)

Policy on the Independence of Outside Directors

Candidates selected as outside directors must meet the requirements for independence set out in the Companies Act and possess the experience and insight to objectively and fairly judge the legality and appropriateness of the execution of the company's duties from the shareholders' perspective without being limited by being in charge of business implementation. Also, we believe in the importance of employing people who are outwardly independent and use the Tokyo Stock Exchange's independence standards as their reference.

Record of Attendance by Outside Directors at Board of Directors and Auditor Meetings

The record of attendance by outside directors at meetings of the Board of Directors and auditors in fiscal 2019 is shown below.

Record of Attendance by Outside Directors at Board of Director and Auditor Meetings

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NamesBoard of DirectorsAuditor Meeting
Number of attendances
/ Number of meetings
Number of attendances
/ Number of meetings
Ikuo Otani,
Outside Director
18 / 18-
Takayoshi Matsunaga,
Outside Director
18 / 18-
Katsuya Ohara,
Outside Corporate Auditor
(Full-time)
18 / 1815 / 15
Tsukasa Fujii,
Outside Corporate Auditor
(Part-time)
18 / 1815 / 15

Remuneration of Directors

Remuneration paid to our directors and auditors in fiscal 2019 is shown below.

Total Amount of Remuneration, Etc. by Category and by Type, and Number of Applicable Persons

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CategoryTotal amount of
remuneration, etc.
(Millions of yen)
Number of
applicable persons
Directors
(excluding outside directors)
2425
Auditors
(excluding outside corporate auditors)
432
Outside directors/auditors575

Composition of GS Yuasa Corporation's director remuneration

image:Composition of GS Yuasa Corporation's director remuneration

Internal Control System

To strengthen the management foundation, the GS Yuasa Group has improved the system and relevant rules to ensure the maintenance of ethical business practices based on the Companies Act. This system includes mechanisms to ensure effective auditing, information management, and risk management throughout the Group.

To comply with the internal control reporting system required under the Financial Instruments and Exchange Act, we are maintaining an internal control system and financial reporting mechanisms to meet all requirements.

Our international subsidiaries and other consolidated Group companies evaluate the status of the improvement and implementation of internal controls. Following external audits, reports on these internal controls are publicly disclosed.

Change of independent auditor

The term of Deloitte Touche Tohmatsu LLC as our independent auditor expired at the end of GS Yuasa’s 16th Annual General Meeting of Shareholders on June 26, 2020. Since Deloitte Touche Tohmatsu had audited our accounts continuously for many years, we decided it was necessary to freshly evaluate and review our independent auditor. Prior to the expiration of Deloitte Touche Tohmatsu’s term, therefore, we conducted a comparison of several auditing firms, including Deloitte Touche Tohmatsu, in accordance with GS Yuasa’s independent auditor evaluation and selection criteria. As a result, we chose KPMG AZSA LLC as our new independent auditor. As well as this firm having the expertise, independence, and suitability required of an independent auditor, and also the capacity to audit the GS Yuasa Group’s global business activities in a uniform manner, we judged that by changing the independent auditor, we could look forward to audits being carried out from a fresh perspective using different methods than in the past.

Executives (As of June 26,2020)

GS Yuasa Corporation

President
Osamu Murao
Senior Managing Director
Toshiyuki Nakagawa
Director
Akio Furukawa
Director
Kazuhiro Fukuoka
Outside Director
Ikuo Otani
Outside Director
Takayoshi Matsunaga
Outside Director
Yoshiko Nonogaki
Outside Corporate Auditor
(Full-time)
Katsuya Ohara
Corporate Auditor
(Full-time)
Hideaki Yamada
Corporate Auditor
(Full-time)
Masayuki Murakami
Outside Corporate Auditor
(Part-time)
Tsukasa Fujii

GS Yuasa International Ltd.

President
Osamu Murao
Senior Managing Director
Toshiyuki Nakagawa
Managing Director
Masaru Sawada
Managing Director
Masahiro Shibutani
Director
Ryoichi Okuyama
Director
Akio Furukawa
Director
Masaya Nakagawa
Director
Kazuhiro Fukuoka
Director
Takashi Taniguchi
Director
Takao Omae
Director
Hiroaki Matsushima
Corporate Auditor
(Full-time)
Katsuya Ohara
Corporate Auditor
(Full-time)
Hideaki Yamada
Corporate Auditor
(Full-time)
Masayuki Murakami
Outside Corporate Auditor
(Part-time)
Yasuo Kuwana