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Bridgestone : 2021 Report on the Corporate Governance Code (announced in December 2021) (436KB)

12/24/2021 | 03:17am EDT

On the Release of Bridgestone's

Corporate Governance Code Report

e Bridgestone Corporation, under the mission of "Serving Society with Superior Quality," has since 2020 dened a vision of "continuing to provide social value and customer value, as a sustainable solutions company towards 2050," and has been managing our business in line with a mid-long term business strategy formulated to realize this vision. As part of its eorts in working towards the achievement of this vision, the company is in the process of further enhancing its corporate governance.

is process of enhancement and reform has been implemented on an ongoing basis since the company was rst established in order to respond over time to the changing conditions and issues deemed important, and in order to ensure that the quality of management and the transparency of decision making processes was constantly improved. In recent years, although the business environment has changed rapidly, natural disasters and health crises have occurred successively, we have and will continue to work towards further improving our corporate governance in order to enhance our management.

Based on this process, we have formulated a mid-long term business strategy that positions sustainability as a central concern of management and aims to gain competitive advantage by creating value both for our customers and society as a whole. Also, by creating a globally consistent strategic view under the new mid-long term business strategy and implementing our strategy in each region while adapting to local and business characteristics and requirements, we can contribute to the realization of a sustainable society that will in turn provide opportunities to enable the continuing development of our society, customers, partners, and our business. It is our intention to fully employ our governance structure in order to further strengthen internal controls, evolve into a sustainable solutions company to be able to proactively address the changing business environment, and continue to implement the ever more eective and ecient planning and execution of our business activities.

Since our rst report in 2016, Bridgestone has been using the Corporate Governance Code as a tool for evaluating our governance policies and systems and continuously communicating our approach and progress in their achievement to our stakeholders.

On behalf of everyone here at Bridgestone, I thank you for your ongoing support and understanding and look forward to hearing your response to this report and your evaluation of our eorts to date as we strive to create a company that we can all be proud of.

December 2021

Shuichi Ishibashi

Member of the Board

Global CEO and Representative Executive Ocer

1

2021 Report on the Corporate Governance Code

1. Changes in Corporate Governance and Our Governance Structure (As of December 2021)

An overview of the development and current structure of Bridgestone's corporate governance are shown diagrammatically here in (1) our changes in the corporate governance system and (2) corporate governance structure diagram.

‹Changes in Corporate Governance›

Ongoing enhancement of governance performance

YearOversight

2021 Abolish the full-time position of "Chairperson" Nominate Board Chair from among independent directors

2020 Separate roles of CEO and Chairman of the Board

2018 Restructuring of the Boardʼ s authority (Authority delegation to executive management)

2017

Global CSR Commitment

"Our Way to Serve"

Management and operational execution

Commence Mid Term Business Plan

Redefine CEO and COO roles as "Global CEO" & "Global COO" respectively

Commence Mid-Long Term Business Strategy

Establish "Global Sustainable Procurement Policy," "Global Human Rights Policy" and "Code of Conduct"

Integrate Olympic and Paralympic related business with sports and cycle businesses Formulate "Our Way to Serve" Global CSR Commitment

Refine Mid-term Management Plan formulating process

2016 Adopt new corporate structure:

"Company with Nominating Committee, etc."

2014 Establish Compliance Committee

Quality Mission Statement

Establish Global Mining & Agricultural Solution Company

Formulate "Quality Mission Statement"

Restructure SBUs: BSCAP China + Asia Pacific

BSEMIA Europe + ME, Africa, Turkey, & Russia

+ India (2020‒)

2013

Establish 3 discretionary board advisory

committees (Governance, Nomination &

Safety Mission Statement

2012

Compensation)

Environmental Mission Statement

2011

The Bridgestone Essence

2010

Introduce independent members of the Board of

2006

Directors

Global EXCO

Refine "Safety Mission Statement"

Introduce CEO, COO system in Bridgestone Corp.

Refine "Environmental Mission Statement"

Refine "The Bridgestone Essence"

Introduce CEO, COO system in Bridgestone Americas. Introduce Executive Committees

Establish Strategic Business Unit (SBU) organization structure

(Followed by a progressive, continuous review of the operational structure)

‹Corporate Governance Structure›

Oversight

General Meeting of Shareholders

Board of Directors (12 members-8 independent)

Independent Chair

Nominating Committee (3 independent directors)

Audit Committee (5 independent + 2 internal directors)

Compensation Committee (3 independent directors)

opinion

inquiry

Advisory Committee to the Board of Directors

Governance Committee

(8 independent directors)

Compliance Committee

(8 independent directors)

Management and execution

Accounting

Independent Auditors

audit

Global CEO

communi-

Global COO

cation

Exercising oversight

Deliberations from diverse

Representative Executive Officers (2)

perspectives

Create & implement

Executive Officers (4)

(incl. 1 non-Japanese national)

Mid-Long Term Business

Strategy

Global EXCO*1

meetings

Report on progress &

Executive Officers and

Other policy management

information sharing

Corporate Officers (11)

Officer Nomination and

Propose agenda items

(incl. 6 non-Japanese nationals)

Compensation Meeting

SBUs (Strategic Business Units)

Executive Director

GBS

resp. for Internal Auditing

Internal

Domestic/overseas Group

Internal Auditing Office

companies & internal companies

Support

(Global Business

audit

CEO

COO

Support Department)

Internal auditing divisions

Internal Control Systems

Stakeholders, including shareholders, employees, business partners, customers & society

*1 Global EXCO: Global Executive Committee

2

2. About This Year's Report

This year's report (released in December 2021) discusses the status of enhancement and improvement efforts related to the amendments to "Japan's Corporate Governance Code" announced in June 2021 in addition to other improvements implemented since the previous revisions announced by the Company in May 2021. The key enhancements are listed as follows:

Principles of Japanʼ s Corporate Governance Code

1

Sustainability Issues, Including Social and Environmental Matters

2.3.1

2

Ensuring Diversity, Including Active Participation of Women

2.4.1

3

Disclosing Management Strategies

3.1.3

4

Developing a Basic Policy for the Sustainability Initiatives

4.2.2

Investments in Human Capital and Intellectual Properties

5

Establishment of Internal Control and Risk Management Systems

4.3.4

6

Identifying and Disclosing the Skills, etc. that the Board Should Have

4.11.1

7

Fulfilling Directorsʼ and Audit Committeeʼ s Roles and Responsibilities

4.13.3

8

Establishing and Disclosing Business Strategies and Business Plans

5.2.1

3. Current Status of Our Enhancement and Improvement Efforts Reported in Accordance with Japan's Corporate Governance Code

Section 1: Securing the Rights and Equal Treatment of Shareholders

General Principle 1

Companies should take appropriate measures to fully secure shareholder rights and develop an environment in which shareholders can exercise their rights appropriately and effectively.

In addition, companies should secure effective equal treatment of shareholders.

Given their particular sensitivities, adequate consideration should be given to the issues and concerns of minority shareholders and foreign shareholders for the effective exercise of shareholder rights and effective equal treatment of shareholders.

The Company recognizes that it is essential for the sustainable development of the business to collaborate with various stakeholders and that our shareholders constitute our primary stakeholder. Based on this understanding, the Company strives to develop an environment wherein shareholders can adequately exercise their rights by providing them with a wide variety of information and opportunities to exercise their rights.

Moreover, the Company endeavors to secure the rights of minority and foreign shareholders and thereby seeks to secure the substantive equality of the rights of all shareholders.

3

Principle 1.1 Securing the Rights of Shareholders

Companies should take appropriate measures to fully secure shareholder rights, including voting rights at the general shareholder meeting.

The Company endeavors to ensure the rights of shareholders by managing operations in order to ensure timely disclosure of not only statutory disclosure documents but also of other information in both Japanese and English, by conducting the Annual General Shareholders' Meeting in a manner such that the voting rights of all shareholders can be exercised effectively, and by ensuring adequate time and opportunity for dialogue between management and shareholders.

Supplementary Principle 1.1.1

When the board recognizes that a considerable number of votes have been cast against a proposal by the company and the proposal was approved, it should analyze the reasons behind opposing votes and why many shareholders opposed, and should consider the need for shareholder dialogue and other measures.

Based upon the understanding that the Annual General Shareholders' Meeting is the Company's highest decision-making body, the Company takes the results of shareholders' execution of their voting rights as an important indication of their intent. The Board of Directors therefore formally analyses the reasons and causes for proposals where the total votes in opposition exceed 20%.

Supplementary Principle 1.1.2

When proposing to shareholders that certain powers of the shareholders' meeting be delegated to the board, companies should consider whether the board is adequately constituted to fulfill its corporate governance roles and responsibilities. If a company determines that the board is indeed adequately constituted, then it should recognize that such delegation may be desirable from the perspectives of agile decision-making and expertise in business judgment.

In order to further promote the separation between the executive and supervisory functions and further strengthen the supervisory role of the board, the Company has adopted the "Company with Nominating Committee, etc." model of corporate governance. Moreover, in addition to establishing the committees legally required under this model, the Company has established a Governance Committee comprised entirely of Independent External Directors, all of whom meet the Company's benchmark for independence (hereinafter referred to as "Independent Directors"). The Governance Committee serves as an advisory body to the Board of Directors with the objective of ensuring that the Company maintains the structures and processes needed to ensure appropriate levels of governance. The Articles of Incorporation currently stipulate that the Board of Directors is responsible for decisions such as determining the level of interim dividend payouts. In the event of further

4

such delegations of authority by the General Shareholders' Meeting to the Board of Directors, the Company will continue to enhance its structures and procedures of governance in order to discharge these responsibilities while ensuring the necessary levels of expertise in, and timeliness of, its decision making.

Supplementary Principle 1.1.3

Given the importance of shareholder rights, companies should ensure that the exercise of

shareholder rights is not impeded. In particular, adequate consideration should be given to the special rights that are recognized for minority shareholders with respect to companies and their officers, including the right to seek an injunction against illegal activities or the right to file a shareholder lawsuit, since the exercise of these rights tend to be prone to issues and concerns.

The Company has established a "Share Handling Regulations" which formally stipulates procedures for the exercising of the rights of minority shareholders and any other procedures in relation to shares in order to ensure that shareholders are able to exercise their rights in full.

Principle 1.2 Exercise of Shareholder Rights at General Shareholder Meetings

Companies should recognize that general shareholder meetings are an opportunity for constructive dialogue with shareholders, and should therefore take appropriate measures to ensure the exercise of shareholder rights at such meetings.

The Company designates Global CEO, the Representative Executive Officer, as the chairperson of the General Shareholders' Meeting from the perspective of continuously enriching the quality of dialogue with shareholders at the General Shareholders' Meeting. In addition, the Company has and will continue to make every effort to ensure that shareholders are provided with the services and support necessary to ensure that they are able to exercise their rights at the General Shareholders' Meeting including such measures as scheduling the Meeting to avoid clashing with the "peak period" for holding General Shareholders' Meetings in Japan, early dispatch of proxy statements, provision of an online voting platform, and provision of information in English.

Supplementary Principle 1.2.1

Companies should provide accurate information to shareholders as necessary in order to facilitate appropriate decision-making at general shareholder meetings.

Taking the requests from shareholders into consideration, the Company provides clear and relevant information to shareholders in a manner intended to facilitate their decision making. This includes providing information regarding transitions in dividends and earnings forecasts, attendance at board meetings and statutory committees for all candidates for board membership, "Guidelines for Determining the Independence of Board Members," "Nominating Policy for the candidates for appointment to the Board," and topics related to the Company's business strategy and its progress.

Disclaimer

Bridgestone Corporation published this content on 22 December 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 December 2021 08:16:08 UTC.


© Publicnow 2021
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