Corporate Governance Report
This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation.
Last Update: June 24, 2021
Hiroshi Suzuki, President & CEO Contact: 03-6911-4820 Securities Code: 7741
The corporate governance of HOYA CORPORATION is described below.
Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information
1. Basic Views
HOYA promotes management with the aim of maximizing its corporate value based on the recognition that corporate governance is a matter of utmost importance for management.
As the basis of taking a fair approach to stakeholders, we have adopted a "company with Nomination Committees, etc." structure simultaneously with the revision of the Companies Act, which enables us to better distinguish the execution and supervision of management to prevent management from being conducted based solely on in-houselogic. We have also set forth in the Articles of Incorporation that the majority of Directors consist of Outside Directors, who actively supervise management by Executive Officers and provide advice in order to improve corporate value from an objective and broad perspective.
HOYA also gives Executive Officers the authority and responsibility for the execution of operations, in order to accelerate decision making and improve management efficiency.
HOYA has established HOYA Corporate Governance Guidelines at the meeting of the Board of Directors, and intends to enhance corporate governance structure and to introduce better governance systems by revising the guidelines.
The HOYA Corporate Governance Guidelines is attached at the end of this report.
[Reasons for Non-compliance with the Principles of the Corporate Governance Code]
The Company complies with all principles of the Corporate Governance Code.
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[Disclosure Based on the Principles of the Corporate Governance Code]
It is HOYA's policy not to cross-hold shares of other listed companies which is aimed for securing promanagement shareholders and this policy is stated in "HOYA Corporate Governance Guidelines". According to the policy, we do not have such shares. We dispose shares of listed or non-listedcompanies if meaning of holding those shares become diluted. When exercising the voting rights on shares, we will vote against to proposals which will adversely affect rational for holding the shares and/or to proposal which will adversely affect corporate value.
(HOYA Corporate Governance Guidelines, III-3) https://www.hoya.co.jp/english/csr/pdf/Governance_Guideline_E.pdf
Once a year, the board of directors review each listed share and those non-listed shares with book value of more than 25 mil. yen. The board assess rational and benefit of having these shares compared to disposing those shares. In fiscal 2020, the Company held shares of four public companies. The Company's Board of Directors decided to sell the shares of two of these because they judged it less significant to keep holding them.
【Principle 1-7 Related Party Transactions】
The Regulations of the Board of Directors stipulate that the Board of Directors should discuss transactions between the company and executives, directors, and major shareholders https://www.hoya.co.jp/english/csr/pdf/BOD_rule_E.pdf
【Principle 2-6 Roles of Corporate Pension Funds as Asset Owners】
Hoya Group adopts defined-contribution plans for the employees respecting their autonomous decisionmaking in asset building. Hoya corporation provide e-learning and other education opportunities to these employees.
【Principle 3-1 Full Disclosure】
HOYA considers it important to disclose information that seems to be beneficial to stakeholders, and the company discloses such information actively. Annual activities are described in Annual Report on the web site.
Management Mission and Principles https://www.hoya.co.jp/english/csr/philosophy.html
HOYA Corporate Governance Guidelines https://www.hoya.co.jp/english/csr/pdf/Governance_Guideline_E.pdf
The Compensation Committee, which consists only of Outside Directors, decides on a remuneration package for each Director or Executive Officer. https://www.hoya.co.jp/english/csr/governance.html
(iv)The Nomination Committee, which consists only of Outside Directors, selects candidates for Directors and Executive Officers.
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The reasons for the Nomination Committee's selection of candidates for Directors and candidates for Executive Officers serving also as Directors are explained in reference documents for the notice of a general meeting of shareholders.
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【Supplementary Principle 4-1-1 Scope of delegation to management】
The Regulations of the Board of Directors stipulate that many responsibilities regarding the execution of business operations are transferred to Executive Officers. The Board of Directors discusses and makes decisions on important matters related to the direction of business management, the setting of goals and strategic direction and the rights of shareholders. https://www.hoya.co.jp/english/csr/pdf/BOD_rule_E.pdf
【Principle 4-8 Effective Use of Independent Directors】
The Articles of Incorporate state that Outside Directors should account for equal to or more than 50% of the Board of Directors. (After the general meeting of shareholders held in June 2021, there are five Outside Directors and one internal Director.
https://www.hoya.co.jp/english/csr/pdf/AOI_E.pdf (HOYA Corporate Governance Guidelines II-2V-1)
【Principle 4-9 Independence Standards and Qualification for Independent Directors】
HOYA has established independence standards for the Nomination Committee's selection of Independent Directors.
https://www.hoya.co.jp/english/csr/governance.html (HOYA Corporate Governance Guidelines II-3VII-3)
【Supplementary Principle 4-11-1 Composition of Board】
The Criteria for the Selection of Directors, which are set by HOYA's Nomination Committee, stipulate that as for the overall framework of the Board of Directors, the appropriate balance among knowledge, experience, and skills, all of which are necessary to fulfill the role of the Board of Directors, and the concept of diversity are all taken into consideration. There are currently six directors, and four out of five Outside Directors have experiences as corporate managers in different industries. One of them is a female director. Also, the other director is an expert on accounting and finance.
【Supplementary Principle 4-11-2 Concurrent holdings of positions by directors】
The Criteria for the Selection of Directors do not limit the number of positions that can be served concurrently by a Director. But a precondition for selection or reappointment is that the percentage of attendance in meetings of the Board of Directors should be at least 75%. As for positions served concurrently by a Director, please refer to reference documents for the notice of a general meeting of shareholders and "Matters Related to Independent Directors" in this report.
【Supplementary Principle 4-11-3 Board Evaluation】
As for the operation of the Board of Directors, a questionnaire survey is conducted once a year (in March), and the Board makes necessary improvements based on analysis and self-evaluation survey results. (HOYA Corporate Governance Guidelines V-3)
Outline of the results of the self-assessment for fiscal 2020:
"It can be said that problematic issues related to the effectiveness of the supervisory function of the Board of Directors were not observed based on such findings as (1) the Independent Directors question and state their opinions on executive proposals from a variety of angles; (2) deliberations at Board of Directors meetings are lively and conducted in an open manner; (3) evaluations of each of the Executive Officers are carried out objectively at the Nomination and Compensation Committee meetings; and (4) the Audit Committee monitored for appropriate execution of business and actively received reports from the accounting auditors by cooperating with corporate audit department, and the audit departments of business divisions. Moreover, this year the Board of Directors discussed policies and initiatives to strengthen the compliance system, and the Nomination Committee launched an assessment by a third party organization in order to ascertain the
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current status of internal human resources with a view to considering more specific measures for the Succession Plan. As for future issues, it was confirmed that discussions on medium-to-long term management strategies and risk management should be further deepened, and that the Nomination Committee should hold sufficient discussions on the diversity of directors and continue to promote succession planning for the management team."
【Supplementary Principle 4-14-2 Training Policy】
New Outside Directors receive explanations regarding the company's business and structure before taking office and subsequently continue to receive explanations of the company's business at the Board of Directors meetings, facilities tours, briefings, etc.
When there is a law revision, etc., lectures by lawyers, etc. are arranged during the Board of Directors meeting and we strive to assist them to acquire knowledge required of Directors also through provision of publications and materials regarding governance and notifications of external workshops. (HOYA Corporate Governance Guidelines V-7)
【Principle 5-1 Policy for Constructive Dialogue with Shareholders】
HOYA shall promote various opportunities for holding dialogues with shareholders in order to comprehend the shareholders' mindset amid an ever-changing management environment.
(HOYA Corporate Governance Guidelines IV)
Regarding the dialogue with shareholders, the company's CEO, CFO and other Executive Officers also engage in direct dialogue with shareholders. (HOYA Corporate Governance Guidelines IV-1) Regarding investor relations, mainly the company's CEO, CFO and Executive Officers are involved in the decision-making of the system and policy. IR staff belong to the same division as corporate planning, general affairs and legal affairs to strengthen cooperation. They cooperate with the financial division regarding account closing and have formed an organic collaboration.
(HOYA Corporate Governance Guidelines IV-2)
The company's CEO, CFO and CTO attend quarterly financial result briefings and explain the results. In addition, the company holds business briefing sessions and facility tours as a means to enhance shareholders' understanding of the company. IR staff reports the opinions of shareholders they obtain from meetings, publications, etc. to the Executive Officers as appropriate and to the Board of Directors on a regular basis.
(HOYA Corporate Governance Guidelines IV-3)
The company requires those who directly engage in dialogue with shareholders to concentrate on acquiring knowledge of insider trading restrictions.
The company carries out surveys regarding practical shareholders on a regular basis and utilizes the result for confirming the shareholder ownership structure and examining the relationship with shareholders.
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Hoya Corporation published this content on 30 June 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 June 2021 10:20:58 UTC.