The Yamaha Group has issued the Yamaha Philosophy and our Promises to Stakeholders, which outline our commitment to ensuring strong profitability while upholding our social responsibilities as a company, and thereby to achieving sustainable growth and improving corporate value over the medium- to long-term. We carry out transparent, high-quality business management based on the basic policies for corporate governance indicated below.
Basic Policies for Corporate Governance
Basic policies for corporate governance
- From a shareholder's perspective, ensure the rights and equal treatment of shareholders
- Taking into consideration our relationships with all stakeholders, proactively fulfill the Company's social responsibilities
- Ensure that information is disclosed appropriately and the management is transparent
- By separating the oversight and executive functions and strengthening the oversight function, ensure that the Board of Directors is highly effective while at the same time executing decisions appropriately and with a sense of urgency
- Proactively engage in dialogue with shareholders
Basic Corporate Governance System
Yamaha Corporation made the transition to a Company with Three Committees (Nominating, Audit, and Compensation) from June 22, 2017, with the objectives of making a clear separation between the oversight and the execution in management, thereby enhancing the oversight function of the Board of Directors and speeding up the execution of business.
Regarding the composition of the Board of Directors, the Company has appointed a Board with two thirds (2/3) of the members from independent Outside Directors with a diversity of backgrounds and specialties, including persons with management experience in other industries. Also, by forming a Nominating Committee, Audit Committee, and Compensation Committee with a majority of independent Outside Directors as obligated by law, the Company can execute its oversight function with further transparency and objectivity. The Audit Committee will strengthen the oversight function through audit by implementing validity checks in addition to legal checks, in cooperation with the Internal Audit Division.
Also, as an official function under the Companies Act, the Company established the Executive Officer position to assume a direct responsibility to shareholders, and they have been delegated major authority from the Board of Directors. By having the Executive Officers functioning as important decision-makers in the execution of business operations, the Company is aiming to speed up this process.
By implementing the abovementioned measures to strengthen the oversight functions and speed up the execution, the Company endeavors to further strengthen corporate governance and to continuously increase corporate value.
Corporate Governance Structure (As of June 26 ,2018)
|President and Representative Executive Officer||1||0|
|Managing Executive Officer||2||0|
|Nominating Committee Members||Total||4||0|
|Audit Committee Members||Total||3||1|
|Compensation Committee Members||Total||4||0|
|President and Representative Executive Officer||1||0|
|Managing Executive Officers||2||0|
Board of Directors
As of June 26, 2018, there are nine (9) Directors (including six (6) independent Outside Directors).
The Board Meeting held monthly (in principle).
The Board of Directors oversees the conduct of duties by the Executive Officers and the Directors, and makes decisions on important matters that are specified in laws and regulations, the Articles of Incorporation, and the Regulations of the Board of Directors.
In keeping with its fiduciary duties, the Directors act to ensure the Company's sustainable growth and enhance its enterprise value over the medium- to long-term, taking into consideration the relationships with all stakeholders.
Directors understand relevant laws and regulations and the Company's Articles of Incorporation and gather sufficient information in order to proactively express their opinions and engage in constructive discussions at the Board of Directors' meetings as elsewhere.
The Nominating Committee has four (4) members (including three (3) Outside Directors) as of June 26, 2018. A majority of the members are independent Outside Directors, and both committee members and the chair are appointed by the Board of Directors.
The Nominating Committee decides on the content of the proposals to be submitted to the General Shareholders' Meeting for selection/dismissal of Directors and the content of proposals submitted to the Board of Directors for selection/dismissal of Executive Officers and Operating Officers. The Nominating Committee also implements the succession plan for the Chief Executive Officer and other officers through activities to develop human resources that can assume the positions of Director, Executive Officer, and Operating Officer.
The Audit Committee has four (4) members (including three (3) independent Outside Directors) as of June 26, 2018. A majority of the members are independent Outside Directors, and both committee members and the chair are appointed by the Board of Directors.
The chair shall be an independent Outside Director. The Audit Committee either works in collaboration with the Internal Auditing Division or conducts audits directly on its own initiative, and audits the structure and operation of the internal control systems of the Company and other Group companies. Based on audit results, the Audit Committee conducts audits to determine the legality and appropriateness of the conduct of duties by the Executive Officers and Directors.
When deemed necessary, members of the Audit Committee report to or express their opinions to the Board of Directors, or may issue cease and desist injunctions of Executive Officers and/or Directors. In addition, the Audit Committee may decide on proposals to be considered in the General Shareholders' Meeting, including the selection/dismissal of the Accounting Auditor.
The Audit Committee shall select full-time members to increase the effectiveness of internal information gathering. In addition, an Audit Committee's Office will be established as a specialized organizational unit that reports directly to the Audit Committee to assist the committee members in the performance of its work. To secure independence from the Executive Officers and other persons engaged in the conduct of business, personnel evaluations, changes in personnel assignments, and rewards/disciplinary punishments of the staff of the Audit Committee's Office will require the approval of the Audit Committee.
For matters where it is necessary to undertake auditing of the conduct of duties by the Executive Officers and Directors, the Audit Committee will make arrangements to ensure that sufficient and appropriate audits can be conducted, including collaboration and sharing information with the Accounting Auditor and the Internal Auditing Division, and engage in activities to increase auditing quality and realize the efficiency of auditing.
The Internal Auditing Division must report on the results of their auditing activities to the Audit Committee periodically and at other times when appropriate, and any time when there are requests for such reports from the Audit Committee.
The Audit Committee shall be able, when necessary, to give instructions regarding audits to the Internal Auditing Division.
In cases where audit-related instructions given by the Audit Committee conflict with those given by the President and Representative Executive Officer, the instructions of the Audit Committee will take precedence.
When the manager of the Internal Auditing Division is going to be reassigned, the opinions of the Audit Committee shall be heard in advance.
The Compensation Committee has four (4) members (including three (3) independent Outside Directors) as of June 26, 2018. A majority of the members are independent Outside Directors, and both committee members and the Committee Chairman are appointed by the Board of Directors.
The Compensation Committee establishes policies regarding the setting of compensation for Directors, Executive Officers, and Operating Officers and, based on these policies, sets the compensation of such officers individually.
As an official function under the Companies Act, the Executive Officer position shall bear direct responsibility to shareholders.
There are seven (7) Executive Officers as of June 26, 2018. The Executive Officers will make important decisions from a Companywide perspective on matters related to the conduct of business that have been delegated to them by the Board of Directors and will be subject to the oversight of the Board of Directors.
A member of the Executive Officers, the President and Representative Executive Officer will represent the Company and, with supreme duties for matters of the Company, will be in overall charge of business under the basic policies set by the Board of Directors.
Managing Executive Officers and Executive Officers will provide assistance to the Representative Executive Officer and will have the position and duties corresponding to general managers in charge of core divisions.
The Operating Officers will execute the business activities they are responsible for from a Companywide perspective based on the important decisions related to conduct of business made by the Board of Directors or the Executive Officers, under the oversight of the Executive Officers.
The Operating Officers will be heads of core divisions of the organization and/or be officers responsible for major Group companies.
As of June 26, 2018, the Company has 10 Operating Officers.
Process and Standards for Selecting Directors and Other Personnel
Regarding the selection of candidates for Director, the Nominating Committee selects candidates based on basic personal qualities and capabilities, competency, experience and record of achievements that are required of internal directors and outside directors as defined by their respective roles, and then decides on the content of selection proposals to be submitted to the General Shareholders' Meeting.
Regarding the selection of members and the chairs of the Nominating Committee, Audit Committee, and Compensation Committee, the Nominating Committee selects candidates based on personal qualities and capabilities as defined by the roles of each of these committees. The Nominating Committee then decides on the content of selection proposals to be submitted to the Board of Directors. Note that for the selection of candidates for the members and the chair of the Audit Committee, the Nominating Committee gathers opinions from the Audit Committee in advance.
For Executive Officers, the Nominating Committees selects candidates based on basic personal qualities and capabilities, competency, experience, and record of achievements that are required of Executive Officers as defined by their respective roles, and then decides on the content of selection proposals to be submitted to the Board of Directors.
For Operating Officers, the Nominating Committee selects candidates based on personal qualities and capabilities they are required to play as defined by their respective roles, and then decides on the content of selection proposals to be submitted to the Board of Directors.
|Title||Name||Reason for appointment|
- * Yamaha has registered six Outside Directors — Shigeru Nosaka, Masatoshi Ito, Junya Hakoda, Yoshimi Nakajima, Taku Fukui, and Yoshihiro Hidaka — as independent directors pursuant to Tokyo Stock Exchange provisions (as of June 26, 2018).
|Board of Directors||Board of Auditors||Nominating Committee||Audit Committee||Compensation Committee|
|Total meetings held||13||4||5||15||1|
- * The attendance rate denominator is the total number of meetings held during each person's term of service
- * Outside Director Hakoda's attendance includes the number of meeting attended at the Board of Auditors up to June 22, 2017
Support system for Outside Directors
Providing Information to Outside Directors
In principle, management meetings are held monthly with the aim of sharing and discussing important management matters and the directionality of business strategy with all directors. In addition, the outside directors receive individual explanations regarding the agenda of the Board of Directors and other reported matters where necessary.
Regular Meetings Among Outside Directors
The Outside Directors regularly hold meetings for only the Outside Directors for the purpose of exchanging views based on an objective perspective and developing a shared awareness of issues.
They also regularly hold meetings to exchange ideas with the President and Representative Executive Officer.
Development of Internal Control System
Based on the Companies Act and Ordinances for the Enforcement of the Companies Act, Yamaha Corporation has put in place systems to secure the proper conduct of its business activities (hereinafter, Internal Control Systems). The aims of these systems are conducting business efficiently, securing the reliability of reporting, securing strict compliance with laws and regulations, preserving the value of Company assets, and strengthening risk management.
The Company has structured the Internal Control Systems for the Group as a whole, based on the "Group Management Charter," which sets forth basic Group management policies, and the "Group Internal Control Policy," which sets internal control policy for the Group. Regarding decisions on the status of management and on issues with some degree of importance which may have an effect on the management condition of the Group, Subsidiaries are required to receive approval from the Company in advance and report certain items to the Company.
Information Relating to Conflicts of Interest
When engaging in transactions with Directors, Executive Officers, or close relatives thereof, necessary systems shall be put in place and monitored to ensure that they are not detrimental to Yamaha Corporation or its shareholders' common interests. With the approval of the Board of Directors pursuant to the Companies Act, the results of related party transactions shall be reported after a transaction is completed.
Policy and Status Concerning Executive Officer Remuneration
Remunerations for Directors
Individual amounts and policy regarding the renumeration of Directors and Executive Officers have been determined in the Compensation Committee, which is comprised of three Outside Directors and one internal Director.
Compensation for Directors (excluding Outside Directors and Audit Committee members) and Executive Officers (excluding the Executive Officer in charge of the internal audit) will consist of (1) fixed compensation, (2) performance-linked bonuses, and (3) compensation in the form of restricted stock. The approximate breakdown of total compensation of (1), (2), and (3) will be 5:3:2.
"(2) Performance-linked bonuses" will vary according to the Company's consolidated net income and consolidated return on equity (ROE) in the previous fiscal year, and these bonuses will be calculated with consideration for the individual's record of performance. The evaluation of individual performance will be based on indicators of performance set by business and function in each area the individual is responsible for. "(3) The Restricted stock compensation plan" has been introduced with the intent of continuously improving the corporate value, and having the Directors and Executive Officers share a common interest with shareholders. Compensation based on Company performance has also been introduced to provide a motivation for reaching performance goals in the medium term, therefore the two thirds (2/3) of the total amount is linked to the Company performance. Conditions for performance will be measured by giving equal weight to three indicators; namely the rate of sales (ROS), earnings per share (EPS), and return on equity (ROE), which are set out in the medium-term management plan. The period of restriction on stock disposal shall be for ten (10) years (or till the retirement of Director or Executive Officer) for the purpose of aligning the interests of the corporate officers with those of the shareholders over a long period after the end of the medium-term management plan. In addition, in the event of serious cases of accounting fraud and/or major losses, a claw-back clause is included that will require the return of all or a portion of restricted shares transferred to officers on an accumulated basis to date, depending on the responsibility of the officers in charge.
Outside Directors and Directors who are members of the Audit Committee as well as the Executive Officer in charge of the internal audit will receive only the fixed compensation.
(Millions of Yen)
|Compensation by Type
(Millions of Yen)
|Number of directors, auditors, and officers|
|Fixed Remuneration||Performance-based compensation||Performance-based bonuses||Compensation in the form of restricted stock|
(Millions of Yen)
|Compensation by Type
(Millions of Yen)
|Number of directors and corporate auditors|
|Fixed Remuneration||Performance-based compensation||Bonuses|
(excluding Outside Directors)
(excluding Outside Corporate Auditors)
|Outside Directors and Outside Corporate Auditors||32||32||-||-||7|
Reflecting the Opinions of Stakeholders
A System to Reflect the Opinions of Stakeholders in Management
In addition to the respective dialogue with shareholders and investors, Yamaha Corporation gives presentations on its medium-term management plan and quarterly earnings for securities analysts and institutional investors, provides business briefings, and conducts facilities tours and gives presentations to individual investors. The Company also posts its management plan and the explanatory materials used in earnings presentations on the Company website.
The results of the dialogue with shareholders and investors are reported to the Board of Directors by the Director, Executive Officers, or Operating Officers responsible on a timely basis, and they will be appropriately reflected in the management of the Company, leading to the Group's sustainable growth and enhancing enterprise value over the medium-to-longer term. Additionally, the voting is analyzed for each resolution at the Ordinary General Shareholders' Meeting, and this is reported to the Board of Directors.
Corporate Governance Policies/Report
In accordance to the provisions of the Tokyo Stock Exchange and the Corporate Governance Code, the Company has created a policy and report which describes our thoughts and systems for corporate governance.