06/28/2021 | Press release | Distributed by Public on 06/28/2021 01:08
Tokio Marine Holdings (the 'Company') is committed to the continuous enhancement of corporate value by fulfilling its responsibilities to shareholders, customers, society, employees and other stakeholders as set forth in the 'Tokio Marine Group Corporate Philosophy'.
For this purpose, the Company hereby establishes a sound and transparent corporate governance system and, as a holding company, recognizes the importance of appropriate control over its Group companies and has formulated the 'Tokio Marine Holdings Fundamental Corporate Governance Policy '. In this Policy, the Company defines the rights of shareholders and securing fairness, and the responsibilities of the Board of Directors, etc.
Corporate Governance System
The corporate governance system of the Company is designed as a hybrid structure whereby the Nomination Committee and Compensation Committee are discretionarily established in addition to the fundamental structure of a company with an Audit & Supervisory Board. The Company believes that the above structure is optimal at this point and in light of the following measures taken: the Company determines significant business execution by resolution of the Board of Directors as an insurance holding company, and makes high-quality decisions reflecting the insight of Outside Directors and Outside Audit & Supervisory Board Members; Audit & Supervisory Board Members who hold no voting rights at the Board of Directors meeting conduct unbiased and objective audits; and the transparency of the decision-making process of nomination and compensation of and for Directors, Audit & Supervisory Board Members, and Executive Officers is ensured by those issues being deliberated at the Nomination Committee and Compensation Committee.
1The Board of Directors
The Board of Directors is responsible for deciding on important matters relating to the execution of the Company's business such as determining the Group's business plan and various basic business policies, supervising the performance of individual Directors and establishing an effective internal control system.
The Company shall have approximately 10 Directors, with a maximum of 15 set by the Articles of Incorporation. As a general rule, the Company shall have at least three Outside Directors. In addition, Directors are appointed for a term of office of one year and may be re-appointed. To ensure the effectiveness of the Board of Directors, when selecting Directors, a balanced composition shall be established, with viewpoints and specializations from diverse fields. As of the end of June 2020, the Company had 13 Directors, of whom five were Outside Directors.
2Audit & Supervisory Board Members and the Audit & Supervisory Board
Audit & Supervisory Board Members, as an independent body entrusted by shareholders, audit the performance of Directors, with the aim of ensuring sound and fair management and accountability. Audit & Supervisory Board Members shall endeavor to conduct a high-quality audit in accordance with the regulations of the Audit & Supervisory Board, auditing standards, auditing policies and auditing plans determined by the Audit & Supervisory Board.
The Company shall have approximately five Audit & Supervisory Board Members, with a maximum of six set by the Articles of Incorporation. As a general rule, a majority shall be Outside Audit & Supervisory Board Members. As of the end of June 2020, the Company had five Audit & Supervisory Board Members, of whom three were Outside Audit & Supervisory Board Members.
3Nomination Committee and Compensation Committee
The Company has established the Nomination Committee and the Compensation Committee, which consist mainly of Outside Directors, to raise the transparency of the processes for selecting as well as determining compensation for Directors, Audit & Supervisory Board Members and Executive Officers of the Company and principal business subsidiaries.
The Nomination Committee deliberates on the following matters and reports to the Board of Directors: the appointment and dismissal of the President & Chief Executive Officer, Directors, Audit & Supervisory Board Members and Executive Officers of the Company, as well as the President & Chief Executive Officer of its principal business subsidiaries, the criteria for the appointment and policy for the dismissal of the President & Chief Executive Officer of the Company, as well as Directors, Audit & Supervisory Board Members and Executive Officers of the Company and its principal business subsidiaries.
The Compensation Committee deliberates on the following matters and reports to the Board of Directors: evaluation of the performance of Directors (full-time) and Executive Officers of the Company, as well as the President & Chief Executive Officer of its principal business subsidiaries, the compensation system for Directors, Audit & Supervisory Board Members and Executive Officers of the Company and its principal business subsidiaries and the level of compensation for Directors (full-time) and Executive Officers of the Company and its principal business subsidiaries , policy for determination of compensation for Directors, Audit & Supervisory Board Members and Executive Officers.
The Nomination Committee and the Compensation Committee generally consist of approximately five members each. As a general rule, a majority of the members of each committee are selected from outside of the Company, and the chairman of each committee is one of the outside members.
Framework Supporting the Corporate Governance System
1Conditions for Selection of Directors and Audit & Supervisory Board Members
Directors of the Company and its principal business subsidiaries shall have a deep understanding of the Company's business type, possess a wide range of knowledge required for management, and as a member of the Board of Directors, have the ability to make decisions that are necessary to determine significant business execution matters. Audit & Supervisory Board Members of the Company and its principal business subsidiaries shall have operational abilities and previous achievements and experience, etc., as Audit & Supervisory Board Members, and through implementation of high quality audits, secure sound and continuous growth of the Company, contributing to the establishment of a superior corporate control system that can respond to societal trust.
The presence of Outside Directors ensures effective supervision of director performance by the Board of Directors. In addition, Outside Directors provide advice based on their insight as experts in various fields, thus ensuring an organization that enables appropriate decisions on important matters relating to the execution of the Company's business. The presence of Outside Audit & Supervisory Board Members creates an auditing organization with an independent and objective perspective. Moreover, it enhances the effectiveness of the Audit & Supervisory Board and ensures an organization that maintains sound, transparent management.
The Company has established conditions for selection and standards for determining independence when selecting Outside Officers.
As of the end of June 2020, the Company currently has five Outside Directors and three Outside Audit & Supervisory Board Members, and has determined their independence from the Company with reference to the above criteria. Accordingly, the Company has registered all eight Outside Officers as independent directors/auditors as prescribed by the Tokyo Stock Exchange.
3Training of Directors, Audit & Supervisory Board Members and Executive Officers
The Company provides opportunities for training, as necessary, to Directors, Audit & Supervisory Board Members and Executive Officers to allow them to appropriately fulfill duties required in each respective area.
4Policies on determination of compensation for Directors, Audit & Supervisory Board Members and Executive Officers
The Company shall ensure 'transparency,' 'fairness,' and 'objectivity' when determining compensation for Directors, Audit & Supervisory Board Members, and Executive Officers.
The following structure shall apply to compensation for Directors, Audit & Supervisory Board Members, and Executive Officers.
The purpose of each type of compensation is as described below.
|Performance-linked compensation||Performance-linked compensation reflects the performance of an organization or an individual against the predetermined corporate and individual targets and is introduced to strengthen individuals' incentives to raise the Company's corporate value.|
|Stock compensation||Stock compensation is linked to the Company's share price and is introduced to encourage the recipients to fulfill their accountability to shareholders by sharing returns on the Company's shares with them.|
The Board of Directors shall set the level of compensation for each position held by Directors and Executive Officers according to their responsibilities, while taking into consideration factors such as the business performance of the Company and the level of compensation in other companies.
Of the different types of compensation for Directors and Executive Officers, fixed compensation and performance-linked compensation shall be paid monthly, while stock compensation shall be delivered upon resignation.
The Board of Directors shall determine the details of compensation to individual Directors and Executive Officers and other important matters concerning compensation to Directors, Audit & Supervisory Board Members, and Executive Officers. Decisions on any matter requiring consultations with the Compensation Committee shall be made after obtaining opinions of the said Committee.
Relations with Shareholders and Other Stakeholders
1Rights of Shareholders and Securing Fairness
The Company shall maintain an environment in which voting rights at General Meetings of Shareholders can be appropriately executed. Specific initiatives include issuing the Notice of Convocation well in advance of the meeting, scheduling the meeting on days that are not crowded with the shareholder meetings of other companies, and using a website that allows shareholders to exercise their voting rights via the Internet. In addition, the Company shall handle the exercise of voting rights and dividend payments in a fair manner, based on the type and number of shares held.
2Dialogue with Shareholders
The Company shall establish Executive Officers in charge of business execution to conduct overall management for dialogue with shareholders, and establish an IR section to plan and implement these activities. Toward dialogue with shareholders such as earnings announcements and presentation meetings for investors, the IR section shall work with other relevant sections to provide accurate and balanced information to shareholders.
The Company, pursuant to its 'Insider Trading Prevention Regulations', shall exercise the utmost care with regard to unpublicized information, and shall communicate with shareholders without utilizing any significant unpublicized information.
Business-related equities are held by some of the Company's business subsidiaries with the intent of strengthening business relationships to enhance corporate value of the Group. However, the Company will continue to work to make its capital less affected by fluctuations in share price, and from the viewpoint of enhancing capital efficiency, continue to work to reduce the total amount.
The Company, at the meetings of its Board of Directors, confirms the appropriateness of the purposes for holding the shares of domestic listed companies that domestic insurance subsidiaries of the Company hold as business-related equities, such as strengthening medium-to-long term transaction relationships, and reviews risks and returns associated with holding such shares on an individual basis as well as the portfolio as a whole. Through these initiatives, the Company confirms the economic rationality of holding the business-related shares. In addition, in accordance with the standards for exercising the voting rights of business-related equities, if it is considered that a certain agenda may damage corporate value, the Company shall decide on whether to approve it through a careful examination.
4Appropriate Cooperation with Stakeholders Other Than Shareholders
The Company shall define the 'Tokio Marine Group Corporate Philosophy', and respond to the trust of shareholders through global business expansion that incorporates profitability, growth and soundness, providing safety and security to customers, and establishing a corporate environment that encourages creativity from employees. Through contributing to the development of society on a wide scale, the Company shall work to perpetually enhance its corporate value.
Appropriate Information Disclosure and Securing of Transparency
The Company shall define the 'Disclosure Policy of the Tokio Marine Group', and with the aim of securing transparency and fairness in management, shall conduct appropriate and timely disclosure regarding financial information such as business results, etc., and non-financial information such as corporate philosophy and business plans.
Corporate Governance Report