Corporate Governance Structure and Initiatives | External Directors
Shareholders and investors have made the effective functioning of internal control into a key issue amidst an epidemic of corporate misconduct in Japan and overseas. In this section, Capcom will explain the corporate governance structure and systems that it has initiated so far based on the key concepts of “effectiveness and visibility” in terms of the results of third party assessment.
(Assessment areas are highlighted in yellow.)
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Capcom Corporate Governance Guidelines (June 21, 2023)
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Corporate Governance Report (June 21, 2023)
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- Structure
- Directors
- Third-Party
Assessment - Information on
Shareholdings - Internal Control
Compliance - Information
security
External Directors
Using external perspectives to ensure effective governance
External directors ensure the effectiveness of the corporate governance function by playing key roles in the Compliance Committee and the voluntary Nomination and Remuneration Committee. They also focus efforts on compliance and the prevention of corrupt or illegal activities, and openly exchange opinions and provide counsel at Board of Directors meetings in an effort to strengthen the management audit function. The Secretariat staff helps with the work of the external directors who are not members of the Audit and Supervisory Committee. For external directors who are members of the Audit and Supervisory Committee, the full-time staff of the Internal Audit Division helps with their work.
Since all seven of the external directors meet the criteria of Tokyo Stock Exchange, Inc. for independent directors, they have been registered with the exchange as independent directors.
Reasons for Selection of External Directors
| Name | Reasons for selection |
|---|---|
| External Directors | |
| Toru Muranaka | Due to expectations for his ability to contribute to the auditing and supervision of the Board of Directors through proposals and advice on legal compliance and propriety from a professional standpoint along with his high level of expertise and broad insight and knowledge as an attorney specializing in corporate and financial instruments and exchange law |
| Yutaka Mizukoshi | Due to expectations for his ability to contribute to the auditing and supervision of the Board of Directors based on an external perspective, including his enthusiastic provision of opinions and advice from an independent standpoint based on his familiarity with management analysis and establishment of management strategies as well as his deep insight into economic trends and international sensibilities that comes from his experience and knowledge from his many years in the consulting industry |
| Wataru Kotani | Due to expectations for his ability to contribute to the auditing and supervision of the Board of Directors by providing opinions and advice from a neutral and objective standpoint based on the perspective of risk management and legal compliance as he possesses broad expertise and extensive experience in IT security and legal affairs from his many years of involvement in police administration |
| Toshiro Muto | Due to expectations for his ability to contribute to the auditing and supervision of the Board of Directors based on his extensive knowledge and experience as he possesses a high level of insight related to fiscal and monetary affairs, general economics, and corporate governance cultivated at the Ministry of Finance, the Bank of Japan, and operating companies |
| Yumi Hirose | Due to expectations for her ability to contribute to the auditing and supervision of the Board of Directors and improvement of the human resources strategy based on her specialized knowledge and extensive experience from her many years as a tax administrator of tax agency offices, her considerable knowledge of finance and accounting, and her high level of knowledge related to health management |
| External Directors (Audit and Supervisory Committee) | |
| Yoshihiko Iwasaki | Due to his expertise and rich experience with tax administration along with his considerable knowledge of finance and accounting, he is expected to contribute to the auditing and supervision of the Board of Directors from the standpoint of tax administration, finance, and accounting with proposals and advice from an external perspective |
| Makoto Matsuo | Due to his success in the legal world based on his high level of expertise and broad insight and knowledge as an attorney and his familiarity with the business world that comes from his extensive experience as an external officer of listed companies, he is expected to contribute to the auditing and supervision of the Board of Directors with guidance and advice from a legal standpoint at meetings of the Board of Directors and other important meetings. |
Officer Remuneration
The Nomination and Remuneration Committee is consulted to ensure fairness and transparency
Policy for setting the calculation method and amount of directors’ remuneration
1 Policy on determining remuneration of directors
(excluding directors who are members of the Audit and Supervisory Committee)
To ensure the fairness and transparency of remuneration for directors (excluding directors who are members of the Audit and Supervisory Committee), the Board of Directors consults the Nomination and Remuneration Committee, which deliberates and makes recommendations based on the policy below, and makes its decision accordingly.
a. Basic remuneration of directors (excluding directors who are members of the Audit and Supervisory Committee)
- – Monthly remuneration is fixed.
- – The amount is determined after considering each board member’ s position, duties, tenure, and status as either an executive director or non-executive director, and an evaluation of individual job performance.
b. Performance linked remuneration of directors (excluding external directors and directors who are members of the Audit and Supervisory Committee)
In regard to performance linked remuneration of directors (excluding external directors and directors who are members of the Audit and Supervisory Committee), short-term performance linked remuneration is based on a bonus for the fiscal year. The Board of Directors consults the Nomination and Remuneration Committee, which performs an evaluation and calculation using the items below based on the Group’ s management objective of steady growth of profits, and makes its decision based on their recommendations.
- i. Single-year net income attributable to owners of parent
- ii. Increase in consolidated operating profit over the previous year
- iii. Multiple consecutive increases in consolidated operating profit over previous years
- iv. Evaluation of operations that the board member oversees
The ratio of remuneration for directors (excluding external directors and directors who are members of the Audit and Supervisory Committee) is set based on the above items and includes annual basic remuneration, comprised of monthly remuneration, and a single year bonus, which does not exceed 50% of annual basic remuneration.
2 Policy for determining remuneration of the directors who serve as members of the Audit and Supervisory Committee
From the standpoint of securing their independence, the remuneration of the directors who serve as members of the Audit and Supervisory Committee is not linked to performance; it is a fixed amount determined through discussions, taking the difference of full-time or part-time service and other factors into account, by the directors who serve as members of the Audit and Supervisory Committee.
Officer Remuneration (Year ended March 31, 2022)
Total remuneration, total amount by type of remuneration, and number of directors the remuneration was paid to, by type of director of delivery company
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| Type of director | Total Remuneration (million yen) |
Total of remuneration by type(million yen) | Number of directors paid |
|||
|---|---|---|---|---|---|---|
| Basic remuneration |
Performance linked remuneration |
Severance | Of those items to the left, non-monetary remuneration |
|||
| Director (excluding Audit and Supervisory Committee and external directors) |
457 | 300 | 156 | – | – | 5 |
| Member of Audit and Supervisory Committee (excluding external directors) |
21 | 21 | – | – | – | 1 |
| External directors | 36 | 36 | – | – | – | 4 |
| Member of Audit and Supervisory Committee (external directors) |
32 | 32 | – | – | – | 2 |
Total amount of consolidated remuneration by director of delivery company
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| Name | Total of consolidated remuneration, etc. (million yen) |
Type of director |
Type of company |
Total of consolidated remuneration by type(million yen) | |||
|---|---|---|---|---|---|---|---|
| Basic remuneration |
Performance linked Remuneration |
Severance | Of those items to the left, non-monetary remuneration |
||||
| Kenzo Tsujimoto | 150 | Director | Delivery company | 100 | 50 | – | – |
| Haruhiro Tsujimoto | 120 | Director | Delivery company | 80 | 40 | – | – |
Note: Total consolidated remuneration, etc. is listed only for those with remuneration of 100 million yen or more.
Evaluation of the Effectiveness of the Board of Directors
The Company performs evaluations of the effectiveness of the Board of Directors to further improve its function. With respect to issues in the fiscal year ended March 31, 2021, we found that the Board of Directors continues to function effectively due to the enhancement of opportunities for external directors to share information and exchange opinions and the further review of the criteria for submitting agenda items in the fiscal year ended March 31, 2022.
Moreover, to further improve the effectiveness for strengthening the supervision function, we will work on the issues below in the fiscal year ending March 31, 2023.
- ・Strengthening operational support structure for Board of Directors and voluntary committees
- ・Enhancing opportunities to provide information to external directors
- ・Securing diversity within Board of Directors and strengthening management human resource capabilities to contribute to sustainable and steady growth
