Basic Concept
Fujikura has chosen to be a company with the Audit and Supervisory Committee. This is to establish a flexible and efficient business execution system by delegating a large amount of authority from Board of Directors' Meeting to executive directors. In addition, Fujikura's multiple outside directors, who are independent of management, have diverse and advanced knowledge and are able to conduct thorough deliberations, thereby strengthening the supervisory function.
Fujikura Group 's corporate governance system, which reflects the above ideas, is as follows:
governance system Diagram (After the 176th Ordinary shareholders' meeting)
Board of Directors' Meeting
Following the Ordinary shareholders' meeting for the fiscal year ending March 2024, the total number of directors will be eight, half of whom are outside directors (all of whom are audit and supervisory committee members). All of the outside directors are independent from Fujikura's management (independent outside directors), and each has management experience and specialized knowledge in finance, accounting, legal matters, etc. Important matters related to management at Board of Directors' Meeting (drafting medium- to long-term strategy, reviewing the business portfolio, etc.) are decided through thorough discussion between the outside directors and internal directors, who have a wide range of knowledge and expertise. In addition, Board of Directors' Meeting is chaired by a full-time audit and supervisory committee member who is a non-executive director, who leads the proceedings and strengthens the supervisory function of Board of Directors' Meeting.
Board of Directors' Meeting will meet 24 times during fiscal year 2023, and with sufficient discussion including with independent outside directors, it will discuss, decide and report on matters such as the nomination of director candidates, matters related to compensation, the formulation of quarterly and annual management plans and confirmation of their progress, the formulation of medium-term management plans, review of business portfolio, decisions on important investment projects, matters related to the restructuring of group companies, and other important matters related to management.
Business Execution System
By resolution of Board of Directors' Meeting, we have established a system in which we appoint a Chief Executive Officer (CEO), Chief Technology Officer (CTO), and Chief Financial Officer (CFO). The CEO is the CEO for the entire Fujikura Group, the CTO is the chief executive officer in the field of technology development, and the CFO is the chief executive officer in the field of finance. With the CEO at the top, the CTO and CFO complement or support the CEO's functions in the fields of technology development and finance, which each require a high level of expertise. This "three-headed system" enables business operations based on more advanced and effective management decisions.
the Audit and Supervisory Committee
The total number of directors who are members of the Audit and Supervisory Committee after the end of the regular shareholders' meeting for the fiscal year ending March 2024 is five, consisting of one full-time internal director and four independent outside directors. From the viewpoint of improving the effectiveness of the execution of duties by the Audit and Supervisory Committee, full-time Audit and Supervisory Committee members are entitled to attend important meetings related to the execution of Executive Management Council and other business and express their opinions. In addition, the Audit and Supervisory Committee members are guaranteed the right to request opportunities to exchange opinions with the persons responsible for each business, and they meet regularly and on an ad hoc basis. In addition, as a organization to assist the the Audit and Supervisory Committee activities, we have established a the Audit and Supervisory Committee Office under its command and assign a full-time staff to it. During fiscal 2023, we will hold 20 the Audit and Supervisory Committee meetings to resolution and discuss matters based on the audit plan and other matters necessary for supervision of the execution of business by executive directors.
Nomination and remuneration of directors
When Board of Directors' Meeting decides on the following matters related to the nomination of directors, the Nomination Advisory committee which is an advisory body to the Board of Directors (comprised of a majority of outside directors and the chairperson of the committee by an outside director), is to verify the fairness and appropriateness of the decision-making process.
Main consultation matters
Proposal for the shareholders' meeting regarding the appointment and dismissal of directors
Criteria for selection and dismissal of directors
Succession planning
Independence Standards for Outside Directors
In fiscal year 2011, the Nomination Advisory committee met a total of eight times.
When Board of Directors' Meeting determines the following items related to Director remuneration, the Compensation Advisory committee which is an advisory body to the Board of Directors (comprised of a majority of Outside Directors and the chairperson of the committee by an Outside Director), is to verify calibration and appropriateness of the decision-making process.
Main consultation matters
Rules for determining directors' remuneration and its amount
Remuneration for individual directors
In fiscal year 2011, the Remuneration Advisory committee met a total of nine times.
group governance
In order to increase the value of the entire Fujikura Group and achieve sustainable growth, we aim to establish frameworks and processes that enable Fujikura Group to come together and operate as if it were a single company, and to establish a system that allows the promotion and management of these processes to be effective and efficient.
group governance system Conceptual Diagram
Skills matrix for directors and Corporate Officer
- I = Information Infrastructure
- With optical wiring solutions based on innovative optical technology and future high-speed wireless communication technologies, we will contribute to building the information and communications infrastructure needed to realize a digital society.
- S = Information Storage
- Our unique electronic component technology and ultra-high density optical wiring technology contribute to the construction of high-capacity components and data center for storing massive amounts of data.
- T = Information Terminal
- With our high-precision electronic components and wiring/mounting technologies, we will contribute to the evolution of high-speed, large-capacity, and highly functional information terminals. We also consider automobiles to be information terminals, and will contribute to the realization and evolution of CASE.
- C = Carbon neutral
- Since carbon neutrality as an initiative to realize a sustainable society is also an opportunity to create businesses, we will promote the business of Fujikura's superconductivity technology and other technologies.
policy for determining director remuneration
The Remuneration Advisory policy committee, which is an advisory body to Board of Directors' Meeting, is composed of the director in charge of human resources and three outside directors, and the chairperson of the committee is an outside director in determining the remuneration of directors who are not members of the Audit and Supervisory Committee. After the report, it will be resolution by Board of Directors' Meeting.
Decisions on the details of remuneration, etc. for individual directors policy are as follows.
Fujikura Group not only handles a wide variety of products, but also develops business globally, and the duties of directors are advanced and diverse. For this reason, the level of remuneration for directors is based on a level appropriate for an excellent human resource who can handle these tasks, and the remuneration of directors is specifically composed in the following three categories with reference to the results of surveys conducted by multiple research organizations, mainly for listed companies. In addition to being based on objective indicators and evaluations, we have re-established a remuneration system that is more linked to business performance.
The ratio of remuneration (short-term business-linked remuneration and stock-based remuneration) to the total remuneration, which fluctuates depending on the length of business and stock price, is expected to be approximately 50% at most.
In addition, the remuneration of directors other than executive directors shall be limited to basic remuneration, which is a fixed amount in consideration of their roles, and short-term work-linked remuneration and stock-based remuneration shall not be paid.
On the other hand, the determination of remuneration for directors who are members of the Audit and Supervisory Committee policy and the determination of remuneration, etc., shall be fixed remuneration in light of the market environment and in light of their duties, and the amount of remuneration for each individual of directors who are Audit and Supervisory Committee members shall be determined through consultation among the directors who are Audit and Supervisory Committee members within the range of the maximum remuneration approval by shareholders' meeting. The policy is determined through consultation among directors who are members of the Audit and Supervisory Committee.
- Basic Remuneration
This portion corresponds to the monitoring and supervision function of directors and is set at a fixed amount according to position and grade.
- Short-term performance-linked compensation
A basic amount is set for each position and grade according to the company's overall performance or the performance of unit in charge, and the amount is paid in the range of 0% to 200% of the basic amount based on certain indicators (operating profit margin, return on equity (ROE), return on invested capital (ROIC)). These indicators are adopted because they are "indicators that easily reflect management policies" and "indicators that are highly correlated with the degree of return of profits to shareholders," and are highly compatible with the growth strategy of Fujikura Group. As targets for indicators related to "short-term performance-linked compensation" in this business year, the aforementioned indicators calculated from the consolidated fiscal year plan for the fiscal year ending March 2023 resolution by Board of Directors' Meeting at the end of the fiscal year ending March 2022 were used. The degree of achievement is measured by comparing these indicators with the same indicators calculated from the consolidated fiscal year results for the same period, and the amount of short-term performance-linked compensation to be paid in this business year is determined. From the next business year (fiscal year ending March 2025), in addition to the degree of achievement against the current fiscal year plan, the degree of growth against the previous fiscal year results will also be adopted as an indicator.
- Stock-Based Compensation
In addition to [1] and [2] above, the Company's common stock will be issued as compensation to directors. The main purpose of this scheme is to increase directors' awareness of contributing to the improvement of corporate value by allowing them to not only enjoy the benefits of rising stock prices, but also bear the risks of falling stock prices, and share the benefits and risks of stock price fluctuations with shareholders. In principle, the shares will be issued when directors who are not audit and supervisory committee members retire.
As part of efforts to improve the effectiveness of Board of Directors' Meeting, we conduct a survey of all directors every year. We have been making continuous improvements to the main issues raised in the survey, and have been working to create a system in which Board of Directors' Meeting can focus on discussions centered on mid- to long-term Corporate Strategy.
The methodology and results of the effectiveness evaluation are outlined below.
In light of this issue, we will proceed with the following initiatives:
policy on Cross-Shareholdings
Fujikura has policy not holding investment shares in principle. However, Fujikura will hold shares of a company as strategically held shares only if it is necessary to enter into a cooperative relationship in business conducted by Fujikura for business strategy and the cooperative relationship contributes to the improvement of Fujikura's medium- to long-term corporate value. These business held shares are positioned as part of the invested capital of each business units, and are examined appropriately in accordance with the above holding policy, and Board of Directors' Meeting decides whether to hold them or not. For shares that Fujikura has decided not to hold, the progress of the sale is reported to Board of Directors' Meeting. Based on the above policy, Fujikura has been actively selling its shares. In May and June 2024, Fujikura sold a total of 3,776,300 common shares of Fujikura Composites Co., Ltd., an equity application affiliates. As a result, Fujikura's shareholding ratio in the company is 4.27%.
Changes in cross-shareholdings