Fujikura Ltd.

  1. Home
  2. ESG
  3. Corporate Governance

ESG

Governance

Corporate Governance

Basic Views on Corporate Governance

Fujikura Ltd. believes the corporate governance system discussed herein is optimal for achieving the company’s growth strategies. Fujikura has adopted a “company with Audit and Supervisory Committee” organizational structure to establish such a corporate governance system.

Enhancing decision-making by the Board of Directors

The Company thinks it important to build a structure that enables the Board of Directors to make decisions after sufficient, thorough deliberation of the annual and mid-term business plans, large M&A deals, and other matters that are central to the policy and growth strategy of the Company. We therefore elect multiple outside directors who possess a broad range of expertise and have objective opinions that are not influenced by internal company circumstances, in addition to electing internal executive directors who are well-versed in and oversee the business of each in-house company. We think this enables the Board of Directors to engage in sufficient, thorough deliberation in making decisions on important matters.

At present, there are five outside directors: Three with corporate management experience (in finance, manufacturing, and legal affairs and risk management, respectively) and two others (one attorney and one certified public accountant).v

Delegation of authority to executive directors

The main businesses of Fujikura are organized into two in-house Companies (the Power & Telecommunication Systems Company, and the Electronics, Automotive & Connector Business Company). An executive director is assigned to each in-house company to handle oversight. Fujikura believes that a flexible system needs to be put in place to facilitate quick and decisive decision-making by these executive directors on items exclusive to the in-house company and on matters posing a relatively minimal degree of risk. Fujikura therefore delegates a significant amount of authority to the executive directors in charge of management of the in-house companies. Fujikura is working to strengthen the structure for business execution further in light of the losses incurred in business operations in past years. One of the steps we are taking is to build a system that enables Fujikura to predict risks, analyze and thoroughly investigate them, and mount a rapid response when a risk materializes.

Strengthening the supervisory function of the Board of Directors

The Company has established an effective system of internal controls to ensure the legality and appropriateness of the performance of duties by each executive director to whom the Board of Directors has delegated broad authority.
The Board of Directors has also strengthened the function for supervising each executive director by appointing multiple outside directors who are independent from the company’s management.

The Board of Directors also believes that establishment of a structure that ensures objectivity and transparency in evaluating the performance of executive directors appropriately contributes to strengthening the supervisory function of the Board of Directors. To achieve this, Fujikura has established a Nominating Advisory Committee and a Remuneration Advisory Committee, the majority of members of which are outside directors. The Board of Directors makes decisions on nomination and remuneration of executive directors after such matters have been discussed in these committees. This ensures the objectivity and transparency of the decision-making process.

Corporate Governance Structure

Officers List

Matters Related to Independent Officers

Fujikura designates all outside directors that satisfy the criteria for independent officers as independent officers.

Criteria for Independence

An individual does not have independence if any of the following applies, has applied in the most recent three-year period, or applies to a spouse, or to a first or second-degree relative.

  • ※1Major business partner: Person or company that accounts for 1% or more of Fujikura’s consolidated net sales, or person or company that earns 1% or more of its consolidated net sales from Fujikura
  • ※2Person who executes business: Executive director or employee working under said director
  • ※3Substantial compensation: Annual amounts in excess of ¥10 million yen

Analysis and evaluation of the effectiveness of the Board of Directors

A survey is conducted on the effectiveness of the Board of Directors and applies to all directors. The survey includes questions on the adequacy of Board meetings overall (time, frequency, management of meeting proceedings, minutes, etc.), adequacy of agenda items (timing, importance, volume of information, etc.), aspects of Board members (participation in discussions, etc.), and executive office function. Fujikura considers the results of the survey and takes remedial measures as necessary.

Based on the findings of this survey, Fujikura works to strengthen the structure to specifically ensure that 1) explanations of Fujikura’s products and individual businesses are provided to outside directors to give them a deeper understanding of the company and thereby further enhance deliberations by the Board of Directors and 2) strengthen the structure to enable prediction, analysis, and investigation of risks, and rapid response when a risk materializes in operating divisions, to take the risk of incurring losses in business operations into consideration.

Policy and procedures followed by the Board of Directors to determine remuneration for executive management and directors

In addition to handling a large variety of products, Fujikura operates its business globally, and director duties are also highly complex and varied. Our basic policy is that the director remuneration should be at a level appropriate for outstanding human resources who are capable of accomplishing such duties. We have therefore classified director remuneration into the following three specific categories, based on the survey results from multiple research groups, mainly on listed companies. We have established a system of remuneration based on objective indicators and evaluation, while also strengthening the link to performance.

 Fujikura’s Board of Directors determines the amount of remuneration for directors who are not audit and supervisory committee members after it has been discussed by the Nominating Advisory Committee, which is an advisory body to the Board of Directors (and consists of the director in charge of human resources and three outside directors, and chaired by an outside director). The Remuneration Advisory Committee evaluates the performance of each director, examines whether the level of compensation is in line with the market, and confirms that the decision-making process concerning the remuneration structure and specific remuneration is appropriate. It then reports the results to the Board of Directors. The Board of Directors then takes these findings into consideration in determining the remuneration of directors who are not audit and supervisory committee members.

Remuneration Classification

Classification Detail
Basic compensation Compensation for the monitoring and supervision functions of each director, which is a fixed amount according to his/her rank.
Short-term performance-based compensation Compensation ranges from 0% to 200% of the basic compensation set by rank, according to corporate performance and performance of the division the director is in charge of, and performance is based on certain indicators (operating margin, ROE, ROIC). These indicators are used because they easily reflect management policy, strongly correspond to shareholder return, and are highly compatible with the Fujikura’s growth strategy.
Stock-based compensation In addition to the monetary compensation in (1) and (2) above, Fujikura also grants shares of Fujikura Ltd. as compensation. This scheme is intended to enhance the motivation of directors to contribute to an increase in the corporate value of Fujikura by placing directors in a position to enjoy the advantage of a rising share price as well as to bear the risk of a falling share price, so that directors and shareholders share the advantages and disadvantages of such fluctuations.

Messages from Outside Directors on Enhancing Corporate Value

Masaaki Shimojima

Masaaki Shimojima

Focus on More Intensive Risk Management through Active Discussions
Fujikura has a long-storied history of technical prowess and strong relationships with customers. In search of further growth, we are now promoting development of technical innovations and new products as well as establishing new customers. At the same time, the company’s overseas operations occupy a larger share of its business, which also requires more intensive risk management for overseas investments. I was elected as outside director in June 2012, and since then, I have focused on approaches to risk management based on my experience working for a financial institution.Fujikura has a long-storied history of technical prowess and strong relationships with customers. In search of further growth, we are now promoting development of technical innovations and new products as well as establishing new customers. At the same time, the company’s overseas operations occupy a larger share of its business, which also requires more intensive risk management for overseas investments. I was elected as outside director in June 2012, and since then, I have focused on approaches to risk management based on my experience working for a financial institution.
Today, one-third of Fujikura’s board members are outside directors and projects are reviewed based on the views of outside directors, which has enlivened discussions during board meetings. As an outside director, I share opinions that may be difficult to raise from inside the company, and by ensuring transparency of management’s decision making processes and speeding up decision making itself, I will contribute to the enhancement of Fujikura’s corporate value.

Kenichiro Abe

Kenichiro Abe

Contributing to the Enhancement of Corporate Value using Teamwork Based on My Experiences at Other Companies
As a Certified Public Accountant, I have been involved in accounting audits for more than three decades. Since being elected in June 2013, I have visited Fujikura’s plants around the world and Group companies on many occasions, knowing that the best way to find issues is understanding frontline operations. I have made recommendations to the Board of Directors based on the issues I identified along with improvement requests. In recent years, there is growing demand for greater communication between management and outside directors, owing to strengthened governance required by Japan’s revised Corporate Governance Code and the need to report on Key Audit Matters (KAM).
Utilizing my experience as an outside director for Japanese companies and foreign companies, I support synergistic value creation using good team work, which contributes to the enhancement of Fujikura’s corporate value.Utilizing my experience as an outside director for Japanese companies and foreign companies, I support synergistic value creation using good team work, which contributes to the enhancement of Fujikura’s corporate value.

Yoshio Shirai

Yoshio Shirai

Supporting a Balance between High Value Added Monozukuri and Profitability/Efficiency
Since I was elected in June 2017, I have supported Fujikura’s management using my expertise and experience developed with monozukuri companies and trading companies. Fujikura has a long history and many businesses, so the key to further growth is how to continually generate high value added products and how to reduce waste and increase management’s profitability and efficiency. In my capacity as outside director, I will continue to support Fujikura in determining the type of added value to provide to its customers.Since I was elected in June 2017, I have supported Fujikura’s management using my expertise and experience developed with monozukuri companies and trading companies. Fujikura has a long history and many businesses, so the key to further growth is how to continually generate high value added products and how to reduce waste and increase management’s profitability and efficiency. In my capacity as outside director, I will continue to support Fujikura in determining the type of added value to provide to its customers.
In addition, I will deepen discussions by the board on approaches to corporate governance and enhance shareholder value. I will contribute to the enhancement of corporate value by recommending initiatives for raising Fujikura’s presence.In addition, I will deepen discussions by the board on approaches to corporate governance and enhance shareholder value. I will contribute to the enhancement of corporate value by recommending initiatives for raising Fujikura’s presence.

Tsuneko Murata

Tsuneko Murata

Committed to Enhancing Management’s Soundness and Transparency to Earn the Trust of Stakeholders
I was newly elected as outside director in June 2019. I deeply understand the founder’s DNA running through Fujikura’s veins for more than 130 years, including “fair play, hard work, and diligence.”I was newly elected as outside director in June 2019. I deeply understand the founder’s DNA running through Fujikura’s veins for more than 130 years, including “fair play, hard work, and diligence.”
The role of an outside director is to convey the necessary views even if they may be difficult to hear for management. Outside directors must not fall into the inaction of “see no evil, hear no evil, speak no evil.” I believe it is important to report views from the standpoints of both compliance and risk management, both actively and passively. The role of an outside director is to convey the necessary views even if they may be difficult to hear for management. Outside directors must not fall into the inaction of “see no evil, hear no evil, speak no evil.” I believe it is important to report views from the standpoints of both compliance and risk management, both actively and passively.
In my career I have experience in working level and management positions at corporations and public institutions. I believe it is important to foster a corporate culture that actively thinks and takes action to prevent recurrences of issues by utilizing lessons learned from past mistakes.In my career I have experience in working level and management positions at corporations and public institutions. I believe it is important to foster a corporate culture that actively thinks and takes action to prevent recurrences of issues by utilizing lessons learned from past mistakes.
I will contribute to enhancing corporate value by elevating management’s soundness and transparency so that we can earn the trust of all stakeholders including shareholders, customers and business partners, by growing sustainably as a company that is employee friendly while realizing its business goals for the future and responding flexibly to society’s needs.I will contribute to enhancing corporate value by elevating management’s soundness and transparency so that we can earn the trust of all stakeholders including shareholders, customers and business partners, by growing sustainably as a company that is employee friendly while realizing its business goals for the future and responding flexibly to society’s needs.


Hamako Hanazaki

Hamako Hanazaki

Supporting Fujikura’s Management from a Legal Perspective Mindful of Society
I was newly elected as outside director in June 2019. I have many years of experience in corporate law as a practicing attorney at law. Only a short time has passed since my election, but talking with employees I feel that they are committed to making Fujikura an even better company. To uphold this commitment, I need to always be mindful of how society views Fujikura and provide the right advice and requests for improvement based on social convictions, with regard to management’s approach and the company’s actions and stance.I was newly elected as outside director in June 2019. I have many years of experience in corporate law as a practicing attorney at law. Only a short time has passed since my election, but talking with employees I feel that they are committed to making Fujikura an even better company. To uphold this commitment, I need to always be mindful of how society views Fujikura and provide the right advice and requests for improvement based on social convictions, with regard to management’s approach and the company’s actions and stance.
To strengthen risk management and compliance, discussions must be held with relevant parties to deepen understanding, without simply providing instructions in a one-sided manner. I will be mindful of employees’ working style, support Fujikura’s management from a legal perspective, and use my untiring efforts to contribute to the enhancement of Fujikura’s corporate value.To strengthen risk management and compliance, discussions must be held with relevant parties to deepen understanding, without simply providing instructions in a one-sided manner. I will be mindful of employees’ working style, support Fujikura’s management from a legal perspective, and use my untiring efforts to contribute to the enhancement of Fujikura’s corporate value.

Communication with Shareholders and Investors

Fujikura promotes initiatives by which the President and senior management can engage in dialogue with shareholders and investors as a means to achieve sustainable growth and increase corporate value over the mid to long-term.

Fujikura places a director in charge of handling constructive dialogue to ensure the effectiveness of dialogue and information disclosure, under whom the IR Group of the Corporate Strategy Planning Division is set up and that cooperates with related departments to conduct a timely, fair, and adequate disclosure of information.

For the purpose of preventing the leakage of financial information and ensuring fairness, Fujikura has established a quiet period. During this quiet period, Fujikura does not make any comments about its financial information neither responds to questions about this information. In addition, pursuant to its internal information management rules, Fujikura endeavors to prevent the leakage or proliferation of important information, and to prevent insider trading.

Announcement of Financial Results, Press Release

Fujikura and the Fujikura Group are making efforts to disclose information promptly, including disclosure on the Tokyo Stock Exchange and release to press. On the "Investor Information" page of the Fujikura website, we will post the quarterly financial disclosure schedule, quarterly performance disclosure material, medium-term management plan material, new business, research development results, press release of the establishment of a new company, in Japanese / English We are trying to enrich it, including posting in.

Activities for Institutional Investors

In Japan, we provide quarterly accounts settlements for institutional investors and securities analysts. During the interim period and fiscal year-end, the top executives explain the results and the progress of the mid-term plan at the results presentation meeting.

Overseas, the president and director in charge of IR visit Europe, North America and Asia directly to institutional investors to explain our business outline, account settlement explanation, and medium-term management plan. In addition, we visit investors as appropriate, and we are trying to enhance dialogue by having a forum for exchanging opinions on the general meeting of shareholders, corporate governance system, ESG etc.

Activities for Individual Investors

In addition to sending a business report, we provide information on a website in a timely manner to individual investors, and the IR Group handles inquiries about business results as a contact point.

IR Activities (FY2018)

Classification Results
Results briefing 4 times (1Q, 3Q is a telephone conference format)
Overseas IR 3 times
Individual interview  30 companies (including telephone conference format)

PAGE TOP