Corporate Governance System

More than one third (three) of the eight members of the Board of Directors are outside directors, which increases management transparency and objectivity. Inside directors, familiar with business operations and circumstances within the company, and outside directors, who have extensive experience, knowledge, abilities, and insights, discuss issues from various perspectives, so that decisions can be appropriately made and monitored regarding strategies and policies for increasing medium and long-term corporate value. Outside Directors consist of more diverse members who have extensive experience in corporate management from a wide range of industries, including female Directors.

A system of corporate auditors is used to audit the legality and appropriateness of management operations, with two internal and two outside Audit & Supervisory Board members. The Audit & Supervisory Board and its members attend Board of Directors meetings, where they proactively execute auditing functions, such as by expressing their opinions or exchanging views with directors or administrative corporate executive officers.

The President, administrative corporate executive officers, and the Executive Committee are designated as the institutions for appropriately and quickly executing administrative processes based on decisions made by the Board of Directors.

Reasons for Appointing Outside Directors and Audit & Supervisory Board Members and Description of Main Activities

Outside Director and Audit & Supervisory Board Member Category Independent Director and Audit & Supervisory Board Member Name Reasons for Appointment and Overview of Duties with Respect to Expected Role Attendance during FY 2020
Outside Directors Reappointed Independent director Hiroko Wada Based on her extensive global business experience as a director of a multinational company and CEO of a Japanese corporation and her broad knowledge about marketing, human resource development, and diversity, she actively expresses views and offers recommendations that strengthen the decision-making and supervisory functions of the Board of Directors. Also, as a member of the Appointment and Compensation Committee, she participates in discussions about improving the transparency and fairness of director appointment/removal and compensation decisions. She was appointed because of her anticipated role in contributing to sustaining growth and increasing the corporate value of the Shimadzu Group.
  • Attended 11 of 11 Board of Directors meetings
  • Attended 6 of 6 Appointment and Compensation Committee meetings
Reappointed Independent director Nobuo Hanai Based on his extensive management experience as a CEO of a major Japanese pharmaceutical company and global knowledge about R&D and the pharmaceutical industry in Japan and throughout the world, he actively expresses views and offers recommendations that strengthen the decision-making and supervisory functions of the Board of Directors. Also, as a member of the Appointment and Compensation Committee, she participates in discussions about improving the transparency and fairness of director appointment/removal and compensation decisions. He was appointed because of his anticipated role in contributing to sustaining growth and increasing the corporate value of the Shimadzu Group based on his knowledge of major markets.
  • Attended 9 of 9 Board of Directors meetings
  • Attended 5 of 5 Appointment and Compensation Committee meetings
    (Director, Shimadzu Corporation)
Newly appointed Independent director Yoshiyuki Nakanishi He offers extensive management experience as the CEO of a global chemical company and global knowledge about chemical industries throughout the world, management strategies, manufacturing, marketing, and other expertise. Given his knowledge of major markets of the Shimadzu Group, he was appointed in anticipation of his valuable advice regarding management and to serve the role of appropriately supervising the execution of business operations. Appointed at the annual shareholders’ meeting on June 25, 2021
Outside Audit & Supervisory Board Members Retained Independent Audit & Supervisory Board member Masahiro Nishio Based on his extensive experience and knowledge from many years of working as a certified public accountant, he actively offers his opinions at Board of Directors meetings and other situations. He was appointed in anticipation of his role in helping to improve the governance of the Shimadzu Group by gathering information from internal control departments and other sources, and providing opinions regarding ensuring the financial health of the Shimadzu Group.
  • Attended 11 of 11 Board of Directors meetings
  • Attended 18 of 18 Audit & Supervisory Board meetings
Retained Independent Audit & Supervisory Board member Tsuyoshi Nishimoto He actively offers his opinions at Board of Directors meetings and other situations based on his extensive expert knowledge and experience as a lawyer. He was appointed in anticipation of his role in helping to improve the governance of the Shimadzu Group by gathering information from internal control departments and other sources, and providing opinions regarding the preparedness of internal control systems at Shimadzu subsidiaries, both within and outside Japan.
  • Attended 8 of 9 Board of Directors meetings
  • Attended 10 of 11 Audit & Supervisory Board meetings
    (after being appointed Audit & Supervisory Board member)
Notes:   The above information represents the status of outside directors and Audit & Supervisory Board members after the Annual Shareholders’ Meeting in June 2021. An overview of duties expected for the role of an outside director that resigned during the June shareholders’ meeting is provided below.
 
Outside Director and Audit & Supervisory Board Member Name Overview of Duties with Respect to Expected Role Attendance during FY 2020
Outside Director Minoru Sawaguchi  With expert knowledge and extensive experience regarding corporate law and corporate governance, he actively expressed views and offered recommendations that strengthen the decision-making and supervisory functions of the Board of Directors. Also, as a member of the Appointment and Compensation Committee, he improved transparency and fairness by actively expressing views in discussions and decisions about succession plans, director compensation, and the appointment and removal of directors, including the President/CEO.
  • Attended 11 of 11 Board of Directors meetings
  • Attended 6 of 6 Appointment and Compensation Committee meetings

Corporate Governance System

 

Internal Control System

To further improve and strengthen the internal control system, corporate ethics, compliance, and risk management operations in the Shimadzu Group function as a single system, with the effectiveness of that system verified as appropriate. Based on that understanding, an internal control system has been established to ensure the duties of executives are executed in accordance with applicable laws/regulations and our Articles of Incorporation, and to ensure business processes within Shimadzu Corporation and Shimadzu Group companies are performed appropriately and efficiently.

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