Corporate Governance

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

  • 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

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 five seventh (5/7) of the members from outside 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 24, 2020)

[ image ] Corporate Governance Structure (as of April 1, 2020
)
Download
Governance Organization Personnel
(Yamaha Corporation, as of June 24, 2020)
  Male Female
Directors Total 6 1
Outside Directors 4 1
Executive Officers Total 6 0
President and Representative Executive Officer 1 0
Managing Executive Officer 2 0
Operating Officers Total 6 1
Audit Officers Total 2 0
Nominating Committee Members Total 4 0
Outside Directors 3 0
Audit Committee Members Total 2 1
Outside Directors 2 1
Compensation Committee Members Total 4 0
Outside Directors 3 0
Governance Organization Personnel, by Nationality
(Yamaha Corporation, as of June 24, 2020)
  Japan Overseas
Directors Total 6 1
Outside Directors 4 1
Executive Officers Total 6 0
President and Representative Executive Officer 1 0
Managing Executive Officers 2 0
Operating Officers 6 1

Directors and Board of Directors

The number of Directors of the Company is seven (7) as of June 24, 2020 (five (5) of them are Outside Directors). The Board Meeting held monthly (in principle). In keeping with its fiduciary duty, the Board of Directors presses for the Group’s sustainable growth and enhancement of enterprise value over the medium-to-longer term. 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 Regulations of the Board of Directors, including basic management policy. In addition, the Board of Directors supervises overall management of the Company through overseeing the succession plan for the Chief Executive Officer and other officers, selecting the members and the chairs of the Nominating Committee, Audit Committee, and the Compensation Committee, appointing Executive Officers, Operating Officers and Audit Officers, approving transactions with related parties, and supervising the development and operation of the Internal Control Systems.
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-longer 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.
In accordance with the Article 26, Paragraph 2 of the Company’s Articles of Incorporation under the Article 427, Paragraph 1 of the Companies Act, the Company has entered into agreements with non-operating director to limit their liability for damages caused by negligence in executing their duties.
The Board of Directors held a total of twelve (12) meetings during the fiscal 2019 (from April 1, 2019 through March 31, 2020; the same shall apply hereinafter).

Nominating Committee

The number of members of Nominating Committee is four (4) as of June 24, 2020 (three (3) of them are Outside 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 Nominating Committee held a total of three (3) meetings during the fiscal 2019.

Audit Committee

The number of members of Audit Committee is three (3) as of June 24, 2020 (three (3) of them are Outside Directors). The chair shall be an Independent Outside Director. The Audit Committee, either working in collaboration with the Internal Auditing Division or conducting audits directly on its own initiative, audits the structure and operation of the internal control systems of the Company and other Group companies. Based on the 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 orders to 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 held a total of fourteen (14) meetings during the fiscal 2019.

Compensation Committee

The number of members of Compensation Committee is four (4) as of June 24, 2020 (three (3) of them are Outside 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.
The Compensation Committee held a total of three (3) meetings during the fiscal 2019.

Executive Officers

The number of Executive Officers is six (6) as of June 24, 2020 (one (1) of them is the Representative Executive Officer and two (2) of them are the Managing Executive Officers). The Executive Officers shall be responsible for the execution of business and 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.

Operating Officers

The number of Operating Officers is seven (7) as of June 24, 2020. 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 by the Board of Directors or the Executive Officers, under the oversight of the Executive Officers.

Audit Officers

The number of Audit Officers is two (2) as of June 24, 2020. The Audit Officers will be responsible for auditing functions in the Yamaha Group as a member of the management team at the equivalent position as 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.

Reason for Appointment of Directors
Title Name Reason for appointment
Director Takuya Nakata Having served in positions such as General Manager of our Pro Audio & Digital Musical Instruments Division, President and Director of Yamaha Corporation of America, Mr. Takuya Nakata has a wealth of experience and achievements alongside broad insight in business. He has led the Group as President and Representative Director since June 2013, and as Director, President and Representative Executive Officer since June 2017 after our transition to a Company with Three Committees (Nominating, Audit, and Compensation). Additionally, he has been a leader in Corporate Governance reform via initiatives such as the transition to a Company with Three Committees (Nominating, Audit, and Compensation), and has worked to strengthen the oversight function of the Board of Directors. He was appointed as a director on expectations that he would help further strengthen the oversight function of the Board of Directors through these achievements and insights, etc.
Director Satoshi Yamahata In addition to work experience at an overseas subsidiary, Mr. Satoshi Yamahata has served as General Manager of the Accounting and Finance Division, General Manager of the Corporate Planning Division, Executive General Manager of the Operations Unit, and Executive General Manager of the Corporate Management Unit, and has a wealth of experience and achievements alongside broad insight. He has promoted Corporate Governance reform as Director and Senior Executive Manager since June 2015 and as Director and Managing Executive Officer since June 2017, and has worked to strengthen the oversight function of the Board of Directors. He was appointed as a director on expectations that he would help further strengthen the oversight function of the Board of Directors through these achievements and insights, etc.
Director Yoshimi Nakajima Having been involved in management as the person responsible for the Asian region and Japanese arm of a global financial institution, Ms. Yoshimi Nakajima has a wealth of experience and achievements alongside broad insight as a corporate manager. Since assuming the position of Outside Director of the Company in June 2017, she has provided highly effective supervision while supporting the determination of major corporate actions and quick and decisive execution on decision-making, based on her wealth of achievements and insights, etc., as a corporate manager. She was appointed as a director on expectations that she would help further strengthen the oversight function of the Board of Directors through these achievements and insights, etc.
Director Taku Fukui With a mastery of corporate law and corporate governance in Japan and overseas as an attorney, Mr. Taku Fukui has a high degree of expertise, wealth of experience and achievements alongside broad insight. Since assuming the position of Outside Director of the Company in June 2017, he has provided highly effective supervision while supporting the determination of major corporate actions and quick and decisive execution on decision-making, based on his high degree of expertise, wealth of achievements and insights, etc. He was appointed as a director on expectations that he would help further strengthen the oversight function of the Board of Directors through these achievements and insights, etc.
Director Yoshihiro Hidaka Having been involved in management at one of the largest global transportation equipment manufacturers in Japan, Mr. Yoshihiro Hidaka has a wealth of experience and achievements alongside broad insight as a corporate manager. Additionally, as President and Representative Director of Yamaha Motor Co., Ltd., a company that shares a common brand with the Company, he is a person with one of the deepest understandings of the Yamaha brand. Since assuming the position of Outside Director of the Company in June 2018, he has provided highly effective supervision while supporting the determination of major corporate actions and quick and decisive execution on decision-making, based on his wealth of achievements and insights, etc., as a corporate manager. He was appointed as a director on expectations that he would help further strengthen the oversight function of the Board of Directors through these achievements and insights, etc., and improve the Yamaha brand value.
Director Mikio Fujitsuka Having been involved in management as CFO at one of the largest global construction machinery manufacturers in Japan, Mr. Mikio Fujitsuka has a wealth of experience and achievements alongside broad insight as a corporate manager, as well as adequate knowledge of finance and accounting. Since assuming the position of Outside Director of the Company in June 2019, he has provided highly effective supervision while supporting the determination of major corporate actions and quick and decisive execution on decision-making, based on his wealth of achievements and insights, etc., as a corporate manager. He has been appointed as a director on expectations that he will help further strengthen the oversight function of the Board of Directors through these achievements and insights, etc.
Director Paul Candland Having been involved in management as the person responsible for the Asian region and Japanese arm of a global entertainment company, Mr. Paul Candland has a wealth of experience and achievements alongside broad insight as a manager. Since assuming the position of Outside Director of the Company in June 2019, he has provided highly effective supervision while supporting the determination of major corporate actions and quick and decisive execution on decision-making, based on his wealth of achievements and insights, etc., as a corporate manager. He has been appointed as a director on expectations that he will help further strengthen the oversight function of the Board of Directors through these achievements and insights, etc.
  • * Yamaha has registered five Outside Directors — Yoshimi Nakajima, Taku Fukui, Yoshihiro Hidaka, Mikio Fujitsuka, and Paul Candland — as independent directors pursuant to Tokyo Stock Exchange provisions (as of June 24, 2020).
Expertise held by the Company’s Directors
Directors Corporate management Legal and risk management Finance and accounting IT and digital Manufacturing, technology, and R&D Marketing and sales Global experience
Takuya Nakata   x     x x x x
Satoshi Yamahata     x x       x
Yoshimi Nakajima Outside x x       x x
Taku Fukui Outside   x         x
Yoshihiro Hidaka Outside x   x       x
Mikio Fujitsuka Outside x x x       x
Paul Candland Outside x         x x
Major Activities by Outside Directors in the Year Ended March 31, 2020
  Board of Directors Nominating Committee Audit Committee Compensation Committee
Total meetings held 12 3 14 3
Outside Director
Masatoshi Ito
Attended 12 3 - 3
Attendance rate* 100% 100% - 100%
Outside Director
Yoshimi Nakajima
Attended 12 - 13 -
Attendance rate* 100% - 92.9% -
Outside Director
Taku Fukui
Attended 12 - 14 -
Attendance rate* 100% - 100% -
Outside Director
Yoshihiro Hidaka
Attended 11 3 - -
Attendance rate* 91.7% 100% - -
Outside Director
Mikio Fujitsuka
Attended 10 - 11 -
Attendance rate* 100% - 100% -
Outside Director
Paul Candland
Attended 10 3 - 2
Attendance rate* 100% 100% - 100%
  • * The attendance rate denominator is the total number of meetings held during each person's term of service

In principle, materials for meetings of the Board of Directors are posted on the database system of the intranet at least three days prior to ensure that Outside Directors can share information, and each Outside Director receives explanations regarding proposals if necessary. Details of deliberations at the Managing Council and internal regulations are also shared through the same database system.
In addition, the secretariat provides Outside Directors with information regarding major events at the Company and analyst reports as needed.

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.

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 with an indicator, which is contained in the medium-term management plan that gives equal weight to core operating income ratio, ROE, and EPS. Transfer restrictions shall not be lifted till the retirement of Director or Executive Officer (the transfer restrictions are effective for thirty (30) 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.

Amount of Remuneration and Other Compensation Provided to Yamaha Directors, Executive Officers, and Auditors
(Year Ended March 31, 2019)
Classification Total Compensation (Millions of Yen) Compensation by Type
(Millions of Yen)
Number of directors, auditors, and officers
Fixed Remuneration Performance-based bonuses Compensation in the form of restricted stock
Director
Outside Directors
86
52
86
52
- - 8
7
Executive Officers 576 253 184 138 7
  • * The above numbers of directors include one director who retired at the conclusion of the Ordinary General Shareholders' Meeting held on June 25, 2018.
  • * The total amount of compensation, etc., paid to the executive officers concurrently serving as directors is described in the section for executive officers.
Remuneration by Director
(Year Ended March 31, 2019)
Name Total Compensation (Millions of Yen) Director category Company category Compensation by Type
(Millions of Yen)
Fixed Remuneration Performance-based bonuses Compensation in the form of restricted stock
Takuya Nakata 195 President and Representative Executive Officer Submitting Company 77 70 48
  • * Only directors whose total consolidated remuneration is ¥100 million or more are listed.

The Company employs Ernst and Young ShinNihon LLC as its Accounting Auditor. Three certified public accountants belonging to the said audit corporation, conduct the accounting audits of the Company. The said audit corporation has already introduced a voluntary shift system for Designated and Engagement Partners in order to ensure that the duration of the engagement does not exceed a certain fixed period. In addition, another six (6) certified public accountants and twenty (20) assistants help the aforementioned two certified public accountants conduct the auditing work.

Compensation for Accounting Auditor in Fiscal 2018 and 2019

Yamaha has applied a transitional measure outlined Points in Attention Concerning Preparation of Form 2 (56) d (f) i through iii of the Revised Cabinet Office Order on Disclosure of Corporate Affairs, etc. based on the Cabinet Office Order on the Partial Revision of Disclosure of Corporate Affairs, etc. (Cabinet Office Order No. 3, January 31, 2019), relating to compensation for accounting auditors etc.

Classification Fiscal 2018 Fiscal 2019
Compensation based on audit certificate services
(Millions of yen)
Compensation based on non-auditing services
(Millions of yen)
Compensation based on audit certificate services
(Millions of yen)
Compensation based on non-auditing services
(Millions of yen)
Filing Company 73 23 145 -
Consolidated affiliates 21 19 21 19
Total 95 42 167 19
  • (Note) The breakdown of compensation based on the audit certification duties of the submitting company in the fiscal year ended March 31, 2019 is as follows.
  • (i) Compensation for Accounting Auditors (audit compensation based on the Companies Act and the Financial Instruments and Exchange Act): ¥75 million yen
  • (ii) Compensation for auditing of International Financial Reporting Standards (IFRS) comparative financial statements for the application of International Financial Reporting Standards (IFRS) for the fiscal year ended March 31, 2020: ¥69 million yen

Notes: Other important compensation:
Fiscal 2019: Yamaha Corporation of America, a consolidated subsidiary of Yamaha Corporation, and 20 other companies paid ¥149 million yen in compensation based on audit certificate services and ¥27 million yen based on non-auditing services to Ernst & Young, which is affiliated with the same auditing accounting auditor network as Yamaha Corporation.
Fiscal 2018: Yamaha Corporation of America, a consolidated subsidiary of Yamaha Corporation, and 17 other companies paid ¥136 million yen in compensation based on audit certificate services and ¥47 million yen based on non-auditing services to Ernst & Young, which is affiliated with the same auditing accounting auditor network as Yamaha Corporation.

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.

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.