Working to ensure fair and transparent management
皇家国际体育AISIN Group builds strong relationships with all of our stakeholders and achieves steady long-term growth and expansion to maximize our value as a company. In order to accomplish this, we believe that it is important to conduct our business activities in a fair and transparent way in order to be a trusted corporate citizen in the international community.
We have appointed three external directors and carry out comprehensive corporate governance activities according to the following five basic policies:
- AISIN Group respects the rights of shareholders, ensures shareholder equality and endeavors to create a suitable environment for ensuring the appropriate exercise and protection of rights.
- AISIN Group endeavors to cooperate with other stakeholders aside from shareholders (i.e., customers, suppliers, employees and members of local communities), with sincerity and integrity, based on common sense and social values.
- AISIN Group discloses information appropriately in accordance with applicable laws, and endeavors to proactively communicate information other than that disclosed in accordance with such laws, and to ensure transparency in its activities.
- In order to ensure transparency, fairness and agility in its decision making, AISIN Group endeavors to ensure appropriate execution of the roles and responsibilities of its Board of Directors.
- AISIN Group endeavors to hold constructive dialogues with its shareholders, based on a shared directionality for stable long-term growth.
This work is based on the Corporate Governance Code issued by the Financial Services Agency and the Tokyo Stock Exchange as part of growth strategies by the Japanese Government.
Maintaining and strengthening internal governance
皇家国际体育Aisin Seiki is strengthening measures based on the Basic Policy Concerning the Establishment of Internal Control, which was approved by a resolution of the Board of Directors.
The main 13 companies in AISIN Group belong to consolidated committees such as the Consolidated Business Ethics Committee, the Consolidated Risk Management Committee, the Consolidated Environmental Committee and the Consolidated Safety and Health Committee, which carry out comprehensive notification and executive activities such as establishing and enacting basic policies to optimize operations and minimize risk, creating guides and carrying out training. The committees monitor operations throughout the company to ensure that all sites are operating effectively. With regard to auditing activities conducted by internal auditing departments, as of January 2018, the group has sought to enhance its auditing structure by consolidating auditing functionality for its 13 main group companies within group headquarters. Moving forward, it plans to audit all of the Group’s consolidated subsidiaries on a regular basis using the genchi genbutsu approach.
Additionally, a summary of all activities geared toward improving and strengthening internal controls is reported at a meeting of the Board of Directors, held during April of each year, to verify the adequacy of these initiatives.
Establishment of an Advisory Committee
AISIN Group has established an Advisory Committee, through which it receives a range of advice from experts with extensive experience and knowledge of management and economic issues. The committee receives advice and exchanges opinions regarding topics such as the regional economic outlook, the impact that the shift toward electric-powered vehicles and restrictions such as those on fuel and exhaust gas will have on the automotive industry, along with various other local issues affecting each business region.
皇家国际体育Restructuring our Board of Directors
On April 1, 2019, we restructured the composition of our Board of Directors for maximum effectiveness and efficiency. The board now comprises Executive Vice Presidents and Operating Officers. This enables all Operating Officers to become a familiar presence at our sites and carry out operations with a sense of urgency. We also slimmed down our management framework from 14 directors to 9 after the regular General Meeting of Shareholders held on June 18, 2019. This creates separation between decision-making and execution, enabling fast decision-making and greater supervision of operations. These changes reduced the number of officers (directors, auditors and operating officers) from 48 at the end of March 2019 to 32 after the regular General Meeting of Shareholders.
Corporate governance structure
Internal and external directors are appointed and dismissed each year based on our vision and management policies and we seek the opinions of independent external directors through our director screening panel, a voluntary nomination committee, to ensure that our Board of Directors always comprises the best people for the job. We also seek outside advice about remuneration. Independent external directors in our remuneration assessment panel provide input to ensure that appropriate remuneration is paid.
皇家国际体育Both panels comprise our president, the relevant vice president and three external directors.
- Aisin Seiki has adopted the Audit & Supervisory Board system and has established a General Meeting of Shareholders, Board of Directors and Audit & Supervisory Board as statutory bodies.
- Board of Directors: The Board of Directors meets once a month and is responsible for overseeing the execution of business operations and passing resolutions on important management matters of Aisin Seiki and AISIN Group.
- Audit & Supervisory Board: The Audit & Supervisory Board is comprised of five members, including three external Audit & Supervisory Board members. Together with monitoring the execution of duties by directors, Audit & Supervisory Board members monitor the status of affairs in respective business divisions to ensure that management and the execution of business operations are being carried out properly.
Criteria and Characteristics of Independent External Directors
皇家国际体育All independent external directors appointed by Aisin Seiki are expected to fulfill the following duties and obligations.
- Apply specialized knowledge, wide-ranging experience and other assets gained from previous roles to their management at Aisin Seiki.
- Provide warnings and advice about risks from an impartial and fair perspective in important decision-making settings such as meetings of the Board of Directors.
- Preside over conflicts of interest between the company and parties such as its management or controlling shareholders.
- Appropriately represent outside views at meetings of the Board of Directors.
皇家国际体育When selecting candidates for external director positions, we focus on specialized expertise and a wide range of experience that will enable the candidate to provide frank and constructive advice in their leadership, in addition to the requirements for independence set by the Companies Act and the Tokyo Stock Exchange.
Appointment and Dismissal of Officers
When appointing and dismissing members of our Board of Directors, we seek the optimum balance of knowledge, experience and skills to ensure the suitable, swift and fair decision-making that is needed to achieve sustainable growth and increase our value as a company in the medium and long term. We take a comprehensive approach, including appointing multiple external directors with advanced expertise inside and outside the industry. We are conscious of the need for efficient consolidated management and appoint directors of key subsidiaries as directors of Aisin Seiki. Decisions to appoint or dismiss a director are ratified by a majority of over 50% in a meeting attended by at least 1/3 of shareholders with voting rights. Our articles of incorporation state that cumulative voting is not used to decide the appointment or dismissal of directors.
Our Board of Directors includes multiple external directors to guarantee that functions performed by the Board of Directors, such as decision-making and the running of meetings, are executed effectively.
皇家国际体育All external directors and auditors are asked about the effectiveness of the Board of Directors as a whole and improvements are made based on their answers.
In our interviews at the end of FY2019, our external directors expressed approval of the overall functioning of the Board of Directors.
Diversity in our Board of Directors and Audit & Supervisory Board
|Board of Directors||Chairman
|Executive Vice President
|Executive Vice President
|Audit & Supervisory Board||Standing auditor
|Vice President and Corpotate Officer
Remuneration of Officers
(1) Policy for determining the amounts and calculation method for remuneration of officers
皇家国际体育〈Remuneration structure and recipients〉
|Officer category||Monthly salary||Bonuses||Stock options||Explanation|
|Directors (excluding external directors)||○||○||○||As directors oversee the operations of the company, their remuneration structure comprises a fixed monthly salary along with bonuses and stock options tied to results.|
|External directors||○||ー||ー||External directors receive only a monthly salary with no bonuses or stock options, as their role is to monitor and preside over the company’s management from an independent position.|
|Auditors||○||ー||ー||Auditors receive only a monthly salary with no bonuses or stock options, as their role is to monitor and preside over the company’s management from an independent position.|
We revised our remuneration system for our directors at the 96th General Meeting of Shareholders on June 18, 2019. The ratio of budget : monthly salary (fixed remuneration) : bonuses (short-term incentives) is now roughly 50% : 35% : 15% for all non-external directors of Aisin Seiki, regardless of role.
〈Policy for director remuneration and method for deciding director remuneration〉
Monthly salary reflects factors such as the director’s duties and experience, along with trends among other companies. Bonuses are based on the consolidated operating profit achieved through our operations in each period, and are decided through a comprehensive assessment of dividends, the size of the bonuses given to our employees, trends among other companies and bonuses that were paid in the past. Stock options (shares with restriction on transfer) are given as an incentive for directors to boost the value of our stock by continuously improving our value as a company.
It was decided at the 96th General Meeting of Shareholders on June 18, 2019 that the total monthly salary and bonuses paid to all directors collectively must be no greater than 600 million yen per year (with no greater than 75 million yen paid to the external directors). It was also decided at the same meeting that the total shares with restrictions on transfer to be given to all non-external directors collectively must be worth no greater than 100 million yen per year.
皇家国际体育The monthly salary, bonuses and stock options for directors are decided according to these policies by the president, relevant vice president and external directors at a Remuneration Council meeting. Amounts for each director are discussed by the Remuneration Council and then finalized at the Board of Directors’ meeting.
〈Policy for auditor remuneration and method for deciding auditor remuneration〉
Auditors’ monthly salary reflects factors such as their duties and trends among other companies. It was decided at the 87th General Meeting of Shareholders on June 23, 2010 that the total monthly salary paid to all auditors collectively must be no greater than 15 million yen per month. The monthly salary for each auditor is decided upon discussion between the auditors.
皇家国际体育(2) Total remuneration for each category of officer, totals for each type of remuneration and number of recipients
|Officer category||Total remuneration
|Totals for each type of remuneration
|Number of recipients
|Director (indicates external directors)||687（36）||419（36）||268（ー）||17（3）|
|Auditors (indicates external auditors)||124（25）||124（25）||ー（ー）||5（3）|
Relationship with Stakeholders
Emphasizing dialog with a wide range of stakeholders
皇家国际体育 AISIN Group focuses on dialog with a wide range of stakeholders, including customers, shareholders, investors, suppliers, employees and local communities, so that we can meet our stakeholders’ expectations.
Information Protection and Management
Strengthening information security
AISIN Group regards protecting company, client and customer information from threats such as information leaks and cyber-attacks as an important risk management issue and is engaged in efforts to strengthen information security.
AISIN Group has applied the All Toyota Security Guidelines (ATSG) to all of its consolidated Group companies, as well as implementing countermeasures with regard to both physical and cyber aspects of information security, such as strengthening internal networks and other information systems and establishing more stringent rules on entry/exit management and on-site photography. It also conducts continuous education and awareness-building activities to increase visibility of these issues. In addition, the group seeks to improve its information security initiatives by carrying out regular inspections.
Management of personal information
To comply with all laws and regulations related to protecting the personal information of customers, business contacts and employees that we encounter in our day-today operations, AISIN Group has established rules and systems to ensure appropriate handling and management of personal information.
With stronger laws and regulations on personal data protection being rolled out around the world, such as the EU’s General Data Protection Regulation (GDPR), we are strengthening our rules on procedures such as the processing of personal data.
Intellectual Property Activities
皇家国际体育Promoting the use of patent information and strengthening group collaborations
皇家国际体育 To sharpen AISIN Group’s competitive edge, our intellectual property division is involved from the product planning stage, researching patent information to assess our competitors’ patent portfolios and development trends. This not only steers our development but provides intellectual property support for group collaborations in up-and-coming growth areas.
We are working to increase group collaboration in intellectual property management by consolidating work such as research, patenting and acquisition and updating of rights for all trademarks held by the 13 main group companies. We are also carrying out group-wide measures to streamline our trademark management and improve reliability in our processes.
皇家国际体育We have established regulations and infrastructure for the handling of intellectual property at our overseas development sites to strengthen our intellectual property capabilities overseas. Local supervisors have been assigned in North America and Europe for over 40 years.
皇家国际体育 Clarivate Analytics has selected us for the Derwent Top 100 Global Innovators* for five years running for our high number of patents and global development.