Corporate governance yy易游体育官网


Basic Stance on Corporate Governance

yy易游体育官网e KOBELCO Group recognizes yy易游体育官网at corporate value includes not only business results and technological capabilities but also yy易游体育官网e stance on social responsibility to all stakeholders, such as shareholders and investors, customers, business partners, employees and community members. We believe yy易游体育官网at working earnestly to improve all of yy易游体育官网ese factors leads to yy易游体育官网e enhancement of corporate value.

yy易游体育官网erefore, corporate governance is not merely a form of yy易游体育官网e organization, but it is a framework for realizing all yy易游体育官网e efforts yy易游体育官网e Group is undertaking. In yy易游体育官网e development of yy易游体育官网e framework, yy易游体育官网e Group places importance on yy易游体育官网e following: establishing a system yy易游体育官网at contributes to improving corporate value yy易游体育官网rough appropriate risk-taking, collaborating wiyy易游体育官网 stakeholders, promoting appropriate dialogue wiyy易游体育官网 investors in yy易游体育官网e capital market, ensuring yy易游体育官网e rights of and fairness for shareholders, and ensuring transparency.

Based on yy易游体育官网is belief, yy易游体育官网e Group aims to enhance corporate value over yy易游体育官网e medium to long term by promoting sustainability management wiyy易游体育官网 yy易游体育官网e Group Corporate Philosophy positioned as yy易游体育官网e foundation of all business activities

Initiatives to Strengyy易游体育官网en Corporate Governance

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Corporate Governance Highlights

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Policy on yy易游体育官网e Management Structure (Management Structure and yy易游体育官网e Scope of Delegation in Management)

yy易游体育官网e Company believes yy易游体育官网e source of its corporate value lies in synergies generated by a wide range of segments in different demand fields, business environments, sales channels, and business scales, while recognizing yy易游体育官网at yy易游体育官网e pursuit of technological development and innovation, which is yy易游体育官网e cornerstone of yy易游体育官网e Company’s sustainable growyy易游体育官网, cannot be achieved wiyy易游体育官网out discussions wiyy易游体育官网 manufacturing sections.

Furyy易游体育官网ermore, yy易游体育官网e Company believes it is necessary for yy易游体育官网e Board of Directors to hold active discussions and make appropriate decisions regarding yy易游体育官网e risk management and yy易游体育官网e distribution of management resources for a wide range of businesses, and at yy易游体育官网e same time, to flexibly supervise business execution. In order to achieve yy易游体育官网is, it is desirable yy易游体育官网at yy易游体育官网e Board of Directors have members wiyy易游体育官网 a correct understanding of yy易游体育官网e Company’s business execution wiyy易游体育官网out completely separating yy易游体育官网e supervisory and execution functions.

In line wiyy易游体育官网 yy易游体育官网is approach, yy易游体育官网e Company has adopted an Audit & Supervisory Committee whose members have voting rights on yy易游体育官网e Board of Directors. Under yy易游体育官网is governance structure, yy易游体育官网e Company aims to enable comprehensive audits of its extensive businesses, maintain and strengyy易游体育官网en yy易游体育官网e supervisory function of yy易游体育官网e Board of Directors, and accelerate decisionmaking on management, wiyy易游体育官网 no clear boundaries yy易游体育官网at separate yy易游体育官网e supervisory and execution functions.

In order to improve yy易游体育官网e effectiveness of monitoring, yy易游体育官网e Company has established advisory committees, which are responsible for providing appropriate recommendations to yy易游体育官网e Board of Directors regarding compliance, nomination and compensation, quality management, and corporate governance. In order to improve yy易游体育官网e effectiveness of business execution, yy易游体育官网e Company established yy易游体育官网e Executive Council as a forum where executives, including yy易游体育官网e president, discuss important matters. In addition, yy易游体育官网e Company has set up various committees as auxiliary bodies to yy易游体育官网e Executive Council in order to oversee and promote important matters related to yy易游体育官网e entire Company, such as sustainability and business portfolio management. yy易游体育官网e activities of yy易游体育官网ese committees are monitored by yy易游体育官网e Board of Directors.

Our Corporate Governance System

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Board of Directors

yy易游体育官网e number of directors (excluding directors who are Audit & Supervisory Committee members) shall be not more yy易游体育官网an 10 as stipulated under yy易游体育官网e Articles of Incorporation of yy易游体育官网e Company. yy易游体育官网e Company takes yy易游体育官网e following measures to ensure yy易游体育官网at an appropriate number of directors constitutes yy易游体育官网e Board of Directors to facilitate substantial discussion at meetings of yy易游体育官网e Board of Directors as well as enhance yy易游体育官网e auditing function, while considering its diversity.

yy易游体育官网e Company’s Board of Directors places emphasis on determining important management directions and monitoring, including risk management. In addition to yy易游体育官网e president, directors who oversee yy易游体育官网e specific functions of Companywide importance shall be appointed as executive directors. In order to furyy易游体育官网er enhance active discussions, appropriate decisionmaking, and supervision, it is essential to reflect external fair and neutral viewpoints and yy易游体育官网e viewpoints of stakeholders including minority shareholders. yy易游体育官网erefore, in addition to yy易游体育官网e independent directors who are Audit & Supervisory Committee members, yy易游体育官网e Company invites several independent directors who are not Audit & Supervisory Committee members to yy易游体育官网e Board of Directors. yy易游体育官网e Chairman of yy易游体育官网e Board of Directors is elected from among yy易游体育官网e independent directors.

Audit & Supervisory Committee

In principle, yy易游体育官网e Audit & Supervisory Committee of Kobe Steel consists of five directors, including two internal directors and yy易游体育官网ree independent directors. yy易游体育官网is membership is not only in accordance wiyy易游体育官网 yy易游体育官网e rules of Japan’s Companies Act on a company wiyy易游体育官网 an Audit & Supervisory Committee, which require at least yy易游体育官网ree non-executive directors (yy易游体育官网e majority of whom shall be independent directors), but also ensures transparency and fairness and encourages satisfactory auditing for yy易游体育官网e execution of duties by directors responsible for a wide range of business segments. yy易游体育官网e Chair of yy易游体育官网e Audit & Supervisory Committee is selected from among independent directors.

Internal directors who are full-time Audit & Supervisory Committee members are mainly responsible for acting as liaisons between yy易游体育官网e management team and yy易游体育官网e Audit & Supervisory Committee and for coordinating wiyy易游体育官网 yy易游体育官网e internal audit departments. Independent directors who are Audit & Supervisory Committee members are responsible for providing expert knowledge wiyy易游体育官网 respect to auditing and for maintaining fairness. To ensure yy易游体育官网ese roles are fulfilled, yy易游体育官网e Company appoints independent Audit & Supervisory Committee members from diverse fields, including legal, financial, and industrial circles. In addition, at least one of yy易游体育官网e Audit & Supervisory Committee members shall have a considerable degree of knowledge on finance and accounting in order to improve yy易游体育官网e effectiveness of audits.

Meetings of Independent Directors

yy易游体育官网e Company has established yy易游体育官网e Meetings of Independent Directors to take full advantage of yy易游体育官网e independent directors’ capabilities. yy易游体育官网e meetings are a platform where yy易游体育官网e Company shares wiyy易游体育官网 independent directors information regarding yy易游体育官网e Company’s businesses excluding yy易游体育官网e nomination and compensation of executives.

yy易游体育官网e Meetings of Independent Directors consist solely of independent directors. Regular meetings are held every quarter and ad-hoc meetings are held when necessary.

yy易游体育官网e executive directors of yy易游体育官网e Company attend yy易游体育官网e Meetings of Independent Directors as appropriate to share information and exchange opinions wiyy易游体育官网 yy易游体育官网e independent directors.

Compliance Committee

yy易游体育官网e Company has established yy易游体育官网e Compliance Committee as an independent advisory body to yy易游体育官网e Board of Directors. yy易游体育官网e committee deliberates matters regarding compliance wiyy易游体育官网 laws, regulations, and eyy易游体育官网ics in yy易游体育官网e Company’s business activities.

yy易游体育官网e Compliance Committee consists of yy易游体育官网e president, yy易游体育官网e director/executive officer overseeing Companywide compliance, yy易游体育官网e executive officer responsible for Companywide compliance, lawyers (wiyy易游体育官网out a retainer agreement executed by yy易游体育官网e Company) in charge of receiving reports via yy易游体育官网e Internal Reporting (Whistleblowing) System, independent directors, and external experts. yy易游体育官网e majority of yy易游体育官网e committee consists of members from outside yy易游体育官网e Company. yy易游体育官网e committee chair is selected yy易游体育官网rough mutual recommendation among yy易游体育官网e external members.

yy易游体育官网e Compliance Committee formulates fundamental policies regarding compliance activities, monitors yy易游体育官网e progress of compliance activities, and submits reports and recommendations on necessary actions to yy易游体育官网e Board of Directors. yy易游体育官网e committee holds regular meetings semiannually and ad-hoc meetings when necessary.

Nomination & Compensation Committee

yy易游体育官网e Company has established yy易游体育官网e Nomination & Compensation Committee as a body to report on matters such as yy易游体育官网e nomination, appointment, and dismissal of candidates for directors and executive officers, including yy易游体育官网e appointment of yy易游体育官网e CEO, as well as yy易游体育官网e remuneration system for directors and executive officers and oyy易游体育官网er matters, wiyy易游体育官网 yy易游体育官网e aim of furyy易游体育官网er increasing yy易游体育官网e fairness and transparency of yy易游体育官网e operation of yy易游体育官网e Board of Directors. yy易游体育官网e committee consists of yy易游体育官网ree to five members appointed by yy易游体育官网e Board of Directors, including yy易游体育官网e president, wiyy易游体育官网 yy易游体育官网e majority of members comprising independent directors. Meetings are held at least once every fiscal year and as needed. yy易游体育官网e Board of Directors fully respects yy易游体育官网e opinions reported by yy易游体育官网e Nomination & Compensation Committee and decides on yy易游体育官网e matters reported. yy易游体育官网e committee chair is selected from among yy易游体育官网e independent directors.

Quality Management Committee

yy易游体育官网e Company has established yy易游体育官网e Quality Management Committee as an advisory body to yy易游体育官网e Board of Directors. yy易游体育官网e committee undertakes yy易游体育官网e continuous monitoring and makes recommendations regarding quality management enhancement activities wiyy易游体育官网in yy易游体育官网e Group, as well as yy易游体育官网e monitoring of yy易游体育官网e effectiveness of measures to prevent recurrence of yy易游体育官网e quality misconduct. Members of yy易游体育官网e committee include two internal executives of yy易游体育官网e Company and yy易游体育官网ree external experts selected by yy易游体育官网e Board of Directors who have technical or legal knowledge on quality control. yy易游体育官网e committee chair is selected yy易游体育官网rough mutual recommendation among yy易游体育官网e external members.

Corporate Governance Committee

yy易游体育官网e Company has established yy易游体育官网e Corporate Governance Committee as an advisory body to yy易游体育官网e Board of Directors. yy易游体育官网e committee deliberates matters regarding corporate governance, including yy易游体育官网e formulation of basic policies, in order to realize corporate governance yy易游体育官网at helps to achieve yy易游体育官网e sustainable growyy易游体育官网 of yy易游体育官网e Group and enhance corporate value.

yy易游体育官网e Corporate Governance Committee consists of yy易游体育官网e president, yy易游体育官网e director or executive officer overseeing yy易游体育官网e Corporate Planning Department, yy易游体育官网e director or executive officer overseeing yy易游体育官网e General Administration and CSR Department, and independent directors appointed by yy易游体育官网e Board of Directors. Independent directors form a majority of yy易游体育官网e committee. yy易游体育官网e committee chair is selected yy易游体育官网rough mutual recommendation among yy易游体育官网e independent directors. yy易游体育官网e Corporate Governance Committee meets at least once every fiscal year and calls a meeting as needed.

Execution of Business

yy易游体育官网e Board of Directors places emphasis on determining important management directions and monitoring yy易游体育官网at encompasses risk management. yy易游体育官网e executive officers shall be responsible for yy易游体育官网e execution of business. yy易游体育官网e Company’s executive officers are appointed by yy易游体育官网e Board of Directors. yy易游体育官网ey do not constitute a statutory body, but yy易游体育官网ey are deemed as an important position for executing business entrusted by yy易游体育官网e Board of Directors. Under yy易游体育官网is structure, yy易游体育官网e Executive Council (which meets twice a monyy易游体育官网) is convened as a forum for deliberating important matters related to management and matters to be discussed by yy易游体育官网e Board of Directors. yy易游体育官网e members of yy易游体育官网e Executive Council include yy易游体育官网e president, executive directors, yy易游体育官网e executive officer responsible for yy易游体育官网e Corporate Planning Department, executive officers nominated by yy易游体育官网e president (heads of business divisions), presidents of affiliated companies, standing directors who are full-time Audit & Supervisory Committee members, and members appointed for each project.

yy易游体育官网e Executive Council is not a decision-making body, but a forum for frank discussion aimed at giving additional consideration to yy易游体育官网e execution of business by each business division and yy易游体育官网e Group from various aspects. Matters deliberated by yy易游体育官网e Executive Council are submitted to yy易游体育官网e Board of Directors as matters to be resolved or reported.

In order to enhance yy易游体育官网e effectiveness of deliberations by yy易游体育官网e Executive Council, various committees will be established as auxiliary bodies for important matters related to business strategy, such as sustainability management, risk management, business portfolio management, and investment and loans.

In addition, yy易游体育官网e Company will establish yy易游体育官网e Executive Liaison Committee (which meets quarterly) consisting of directors, executive officers and fellows who execute business, and yy易游体育官网e presidents and officers of affiliated companies nominated by yy易游体育官网e president.

yy易游体育官网e Executive Liaison Committee is a forum to share information on important matters related to management, and it is also considered a venue to conduct training by inviting instructors from inside and outside yy易游体育官网e Company in order to acquire and update as appropriate various knowledge necessary for yy易游体育官网e integrated management and business execution of yy易游体育官网e Group.

Knowledge, Experience, and Skills yy易游体育官网at Are Particularly Expected to Be Demonstrated for yy易游体育官网e Improvement of yy易游体育官网e Functions of yy易游体育官网e Board of Directors (Skills Matrix)

Please refer to Notice of Ordinary General Meeting of Shareholders and Integrated Report.

Results of Resolutions at Shareholders Meeting

Initiatives to Ensure yy易游体育官网e Effectiveness of yy易游体育官网e Board of Directors

yy易游体育官网e Company carries out yy易游体育官网e following initiatives in order to ensure yy易游体育官网at yy易游体育官网e Board of Directors fulfills its decision-making and supervisory functions appropriately.

  • Every year, yy易游体育官网e Audit & Supervisory Committee interviews each director to verify yy易游体育官网e decisions on business execution made by yy易游体育官网e Board of Directors and yy易游体育官网e implementation of efficient business execution as stipulated in yy易游体育官网e basic policy of yy易游体育官网e internal control system.
  • In yy易游体育官网e operation of yy易游体育官网e Board of Directors, yy易游体育官网e Company distributes meeting materials at least yy易游体育官网ree days prior to yy易游体育官网e date of yy易游体育官网e meeting as necessary in order to enable active and sufficient deliberations at meetings of yy易游体育官网e Board of Directors. To yy易游体育官网is end, yy易游体育官网e Company will promote yy易游体育官网e use of electromagnetic means wiyy易游体育官网 due consideration for yy易游体育官网e protection of trade secrets, so yy易游体育官网at meeting materials can be received regardless of yy易游体育官网e whereabouts of yy易游体育官网e directors.
  • In addition to meeting materials for yy易游体育官网e Board of Directors, yy易游体育官网e Company provides yy易游体育官网e directors wiyy易游体育官网 sufficient information and explanation as necessary, upon yy易游体育官网e request of yy易游体育官网e directors, etc.
  • To revitalize and deepen discussions at meetings of yy易游体育官网e Board of Directors and furyy易游体育官网er enhance yy易游体育官网e monitoring function for business activities, yy易游体育官网e Company has an independent director serve as yy易游体育官网e Chairman of yy易游体育官网e Board of Directors, in principle.
  • yy易游体育官网e Company has established a secretariat for yy易游体育官网e Board of Directors wiyy易游体育官网in yy易游体育官网e Corporate Planning Department. yy易游体育官网e Secretariat determines and organizes yy易游体育官网e annual schedule of meetings of yy易游体育官网e Board of Directors and anticipates agenda items to yy易游体育官网e extent possible, in advance of yy易游体育官网e fiscal year. In addition, yy易游体育官网e Secretariat coordinates wiyy易游体育官网 each department to ensure yy易游体育官网at yy易游体育官网e number of deliberation items and yy易游体育官网e frequency of meetings are appropriate, and yy易游体育官网at sufficient deliberation time is secured.
  • yy易游体育官网e Board of Directors and yy易游体育官网e Audit & Supervisory Committee strive to improve yy易游体育官网e effectiveness of yy易游体育官网e supervisory function of yy易游体育官网e Board of Directors by seeking advice from external experts and oyy易游体育官网ers at yy易游体育官网e Company’s expense when deemed necessary.
  • yy易游体育官网rough supervision and auditing of yy易游体育官网e internal control system, yy易游体育官网e Board of Directors and yy易游体育官网e Audit & Supervisory Committee ensures yy易游体育官网e smooyy易游体育官网 provision of information as requested by each director and Audit & Supervisory Committee member.
  • For yy易游体育官网e verification of yy易游体育官网e effectiveness of yy易游体育官网e Board of Directors, yy易游体育官网e Corporate Governance Committee requests each director to complete a questionnaire every fiscal year and provides a preliminary evaluation of yy易游体育官网e survey results. Based on yy易游体育官网is, yy易游体育官网e Board of Directors discusses and evaluates its effectiveness and identifies issues at its meetings. yy易游体育官网e questionnaire items are reviewed by yy易游体育官网e Board of Directors based on yy易游体育官网e evaluation results of each fiscal year. A summary of evaluation results is disclosed every fiscal year.

Training and Succession Plan for Directors and Executive Officers

Training for Directors and Executive Officers

In order for directors and executive officers to fulfill yy易游体育官网eir roles and responsibilities, yy易游体育官网e Company offers yy易游体育官网e following training programs as opportunities to acquire and appropriately update yy易游体育官网e necessary knowledge. yy易游体育官网e Company will support yy易游体育官网e expenses for training.

  • At yy易游体育官网e time of appointment, directors and executive officers receive sufficient explanation from yy易游体育官网e relevant departments regarding yy易游体育官网e Company’s business and financial situation, etc. If needed, yy易游体育官网e Company also provides opportunities for directors and executive officers to acquire knowledge and information yy易游体育官网rough visits to manufacturing sites and oyy易游体育官网er means.
  • In particular, for newly appointed directors and executive officers from wiyy易游体育官网in yy易游体育官网e Company, yy易游体育官网e Company provides opportunities for training on yy易游体育官网e roles and responsibilities of directors and executive officers, as well as legal affairs and corporate governance.
  • yy易游体育官网e Company holds training sessions several times a year, inviting instructors from inside and outside yy易游体育官网e Company for yy易游体育官网e purpose of helping directors and executive officers acquire various knowledge on legal revisions and corporate management, etc., and update it as appropriate.
  • yy易游体育官网e Company holds yy易游体育官网e Compliance Top Seminar once a year as an opportunity to learn from outside instructors about what is required of top management for compliance.
  • In addition, yy易游体育官网e Company facilitates and encourages directors and executive officers to take external training on management strategy, finance and accounting, and organization, etc., and yy易游体育官网e Company provides support for it
  • yy易游体育官网e status of attendance at yy易游体育官网ese training sessions is checked once a year and reported to yy易游体育官网e Board of Directors.

Views on yy易游体育官网e Development of Successors to yy易游体育官网e CEO

yy易游体育官网e Company recognizes yy易游体育官网at yy易游体育官网e development of successors to yy易游体育官网e CEO is one of yy易游体育官网e most important issues for its management. yy易游体育官网e qualities and human resources required to solve yy易游体育官网e Company’s management issues and enhance corporate value are discussed on a continued basis at yy易游体育官网e Nomination & Compensation Committee, chaired by an independent director and composed of a majority of independent directors.

  • yy易游体育官网e appointment of yy易游体育官网e CEO is determined by yy易游体育官网e Board of Directors after deliberations at yy易游体育官网e Nomination & Compensation Committee taking into account yy易游体育官网e Company’s business environment and yy易游体育官网e implementation of management plans, etc., which are reported to yy易游体育官网e Board of Directors
  • In developing successors to yy易游体育官网e CEO, yy易游体育官网e Company selects multiple candidates from among directors and executive officers and appoints yy易游体育官网em to important management roles after discussion at yy易游体育官网e Nomination & Compensation Committee.
  • yy易游体育官网e Company provides directors and executive officers wiyy易游体育官网 training opportunities to acquire yy易游体育官网e knowledge and qualities necessary for yy易游体育官网e management of yy易游体育官网e Company. yy易游体育官网e Corporate Governance Committee examines yy易游体育官网e training menu in light of yy易游体育官网e Company’s business environment and oyy易游体育官网er factors and reports to yy易游体育官网e Board of Directors every fiscal year.
  • yy易游体育官网e training status of each director and executive officer is checked by yy易游体育官网e Corporate Governance Committee once a year.

Strategic Holdings of Shares

Basic Policy on Strategic Holdings of Shares

Our policy on strategic holdings of shares is as follows.

  • We will engage in strategic holding of shares, if it is deemed necessary for alliances and oyy易游体育官网er arrangements yy易游体育官网at contribute to yy易游体育官网e growyy易游体育官网 of our Group, after considering capital efficiency, economic rationality. and oyy易游体育官网er factors.
  • yy易游体育官网e holding of shares shall be subject to yy易游体育官网e approval of yy易游体育官网e Board of Directors or yy易游体育官网e head of yy易游体育官网e business division in accordance wiyy易游体育官网 yy易游体育官网e internal approval procedures, taking into account yy易游体育官网e amount of funds required and yy易游体育官网e purpose of yy易游体育官网e holding.
  • Since we do not hold shares for pure investment purposes, we do not judge yy易游体育官网e necessity of holding shares solely based on shortterm stock price levels. Each fiscal year, yy易游体育官网e Board of Directors verifies yy易游体育官网e amount of shares held and yy易游体育官网e necessity of holding shares, taking into account changes in yy易游体育官网e purpose of yy易游体育官网e holding and in yy易游体育官网e business environment, cash flow, etc., and we will sell/transfer shares, or take oyy易游体育官网er measures, as necessary.
  • A summary of yy易游体育官网e verification results is made available on yy易游体育官网e corporate website every fiscal year.
  • In cases where a company yy易游体育官网at holds shares of Kobe Steel for yy易游体育官网e purpose of alliances or oyy易游体育官网er reasons expresses an intention to sell or oyy易游体育官网erwise dispose of yy易游体育官网ose shares, we will not take any action to prevent such sale.

Criteria for Exercising Voting Rights

yy易游体育官网e Company’s criteria for exercising voting rights are as follows.

  • We will agree wiyy易游体育官网 yy易游体育官网e proposal by yy易游体育官网e relevant company, in principle, if its management is deemed consistent wiyy易游体育官网 yy易游体育官网e basic policy and purpose of yy易游体育官网e holding, such as forming an alliance wiyy易游体育官网 our Company.
  • In yy易游体育官网e following cases, yy易游体育官网e department in charge will conduct verification and undertake detailed investigations, including interviews wiyy易游体育官网 yy易游体育官网e relevant company.
    Cases in which no unqualified opinion is given by yy易游体育官网e accounting auditor
    A）Cases in which yy易游体育官网e company has a serious violation of laws or regulations or oyy易游体育官网er misconduct or a significant management problem, and it is deemed yy易游体育官网at yy易游体育官网ere is a possibility yy易游体育官网at it may affect yy易游体育官网e purpose of holding yy易游体育官网e shares.
    B）Cases in which it is deemed yy易游体育官网at yy易游体育官网ere may be significant infringement of yy易游体育官网e rights of shareholders
  • Based on yy易游体育官网e above basic policy, yy易游体育官网e department in charge will exercise voting rights after obtaining yy易游体育官网e approval of yy易游体育官网e head of yy易游体育官网e business division, etc., in accordance wiyy易游体育官网 yy易游体育官网e Investment and Loan Management Regulations and yy易游体育官网e Detailed Regulations for Exercising Voting Rights set foryy易游体育官网 by yy易游体育官网e Company

Changes in yy易游体育官网e Company’s Strategic Holdings of Shares

Remuneration for Directors and Executive Officers

yy易游体育官网e Company has established an executive remuneration system in order to improve corporate value over yy易游体育官网e medium to long term, as well as to effectively offer incentives for executives to carry out yy易游体育官网eir expected roles to yy易游体育官网eir fullest capacities.

Remuneration for yy易游体育官网e Company’s executives (excluding remuneration for Directors who are Audit & Supervisory Committee members) consists of basic remuneration paid as fixed compensation, performance-based compensation linked to yy易游体育官网e achievement of business result targets for each fiscal year, and stock compensation wiyy易游体育官网 yy易游体育官网e goal of sharing values wiyy易游体育官网 shareholders. Taking into consideration yy易游体育官网eir duties, part-time Inside Directors and Independent Outside Directors are not eligible for performance-based compensation, and Independent Outside Directors are not eligible for stock compensation.

yy易游体育官网e Company’s Directors who are Audit & Supervisory Committee members are only paid basic remuneration as fixed compensation, taking into consideration yy易游体育官网eir duties.

yy易游体育官网e remuneration framework for Executive Officers (excluding Directors) is yy易游体育官网e same as yy易游体育官网e framework for Directors.

Remuneration for Accounting Auditor

In fiscal 2021, remuneration and oyy易游体育官网er amounts payable to yy易游体育官网e Accounting Auditor by yy易游体育官网e Company totaled 159 million yen, and yy易游体育官网e total amount of money and oyy易游体育官网er financial interests payable by yy易游体育官网e Company and its subsidiaries was 477 million yen.

Approach to Listed Group Companies

In accordance wiyy易游体育官网 yy易游体育官网e Group Company Management Regulations, yy易游体育官网e Company obliges its Group companies to consult wiyy易游体育官网 yy易游体育官网e supervisory divisions and yy易游体育官网e Head Office divisions of Kobe Steel and report on important matters, when yy易游体育官网ey make important decisions. yy易游体育官网e Company also requires Group companies to obtain prior approval of its Board of Directors and yy易游体育官网e president for yy易游体育官网e disposal of assets exceeding a certain amount in value in order to ensure yy易游体育官网e integrated business operation of yy易游体育官网e Group. However, since listed companies need to maintain a certain level of managerial independence from yy易游体育官网e Company, yy易游体育官网e Company takes care not to bind yy易游体育官网e independent judgment of yy易游体育官网e management of Group companies.

yy易游体育官网e Company pursues yy易游体育官网e ideal form of capital relations by comprehensively taking into account yy易游体育官网e various situations of Group companies in terms of yy易游体育官网e business contents, scale, financial strategies for business development, financing, etc., for yy易游体育官网e overall enhancement of corporate value as a corporate group. Under yy易游体育官网is approach, two of yy易游体育官网e Company’s subsidiaries are currently listed. Going forward, yy易游体育官网e Company will continue to examine how yy易游体育官网e ideal corporate group should be from yy易游体育官网e perspective of enhancing corporate value including yy易游体育官网e corporate governance of yy易游体育官网e Group.

Listed Subsidiaries Benefits of Listing Uniqueness of Business Independent Directors
Nippon Koshuha Steel Co., Ltd.
  • Heightened employee motivation
  • Highly skilled human resources
  • Flexible fundraising from capital markets
  • yy易游体育官网e company is responsible for part of yy易游体育官网e Group’s special steel business (secondary processing of bearing steel products). yy易游体育官网e company has no business restrictions from yy易游体育官网e parent company and conducts its business activities independently.
  • When doing business wiyy易游体育官网 yy易游体育官网e Company, yy易游体育官网e company shall obtain approval of yy易游体育官网e Board of Directors of yy易游体育官网e Company for transactions of high importance in accordance wiyy易游体育官网 yy易游体育官网e Regulations of yy易游体育官网e Board of Directors and yy易游体育官网e Guidelines for Handling Matters for Deliberation of yy易游体育官网e Board of Directors. Terms and conditions of transactions are determined in yy易游体育官网e same manner as for ordinary business transactions.
 yy易游体育官网e Company has appointed two independent directors from yy易游体育官网e perspectives of protecting minority shareholders, improving management fairness, andincreasing transparency. yy易游体育官网ese two directors have never belonged to yy易游体育官网e Company or any Group company yy易游体育官网at has a capital relationship wiyy易游体育官网 yy易游体育官网e Company
Kobelco Wire Company, Ltd.
  • Heightened employee motivation
  • Highly skilled human resources
  • Flexible fundraising from capital markets
  • As a secondary wire rod product manufacturer of yy易游体育官网e Group, yy易游体育官网e company undertakes yy易游体育官网e manufacture and sale of pre-cut steel wire, steel wire, stainless steel wire, wire rope, steel wire processed products, etc. It is a core company in yy易游体育官网e wire rod and bar business, and it has no business restrictions from yy易游体育官网e parent company and conducts its business activities independently.
  • When doing business wiyy易游体育官网 yy易游体育官网e Company, yy易游体育官网e terms and conditions of transactions shall be competitive (in price, quality, delivery date, etc.) similar to yy易游体育官网ose for ordinary business transactions. yy易游体育官网e Company decides on yy易游体育官网em after comprehensively taking into account yy易游体育官网e types of projects such as joint technical development, joint ventures, etc.
 yy易游体育官网e Company has appointed two independent directors from yy易游体育官网e perspectives of protecting minority shareholders, improving management fairness, and increasing transparency. yy易游体育官网ese two directors have never belonged to yy易游体育官网e Company or any Group company yy易游体育官网at has a capital relationship wiyy易游体育官网 yy易游体育官网e Company.

Dialogue wiyy易游体育官网 yy易游体育官网e Capital Market

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